Charging of GST on sales in Singapore

GST means Goods and Services Tax that is added to the cost of things people buy. The government pays for things like roads, schools, and hospitals from GST.

It is important to know how GST in Singapore works if you have a business over there.You need to know when to charge GST, how much to charge, and what to do with the GST money you collect. This guide will help you learn about GST in Singapore in a simple and easy way.

What Is GST in Singapore?

GST in Singapore is a tax added to most goods and services sold in the country. The current GST rate in Singapore is 9% (as of 2024). This means if you sell something for SGD 100, you must add SGD 9 as GST, making the total price SGD 109.

Only GST-registered businesses can charge GST. You must register for GST if your business makes more than SGD 1 million in a year. Some businesses can also choose to register even if they make less.

The GST you collect from customers does not belong to you. You are keeping it for the government. You must send this money to the Inland Revenue Authority of Singapore (IRAS).

How to Charge GST in Singapore Correctly

If your business is registered for GST in Singapore, you need to follow some easy steps to make sure you are doing it right. GST means you collect tax when you sell goods or services.

1. Add GST to Your Prices

You must add GST to your product or service price.

For example, if your item costs SGD 50, and GST is 9%, you must add SGD 4.50.
So the total price becomes SGD 54.50.
The customer pays this full price.
Always check your math to make sure you add the right GST amount.

2. Show GST Clearly on Invoices

Your invoice should show these three things:

The price before GST
The GST amount (how much tax you added)
The total price with GST

Make sure the GST number is printed on your invoice too.

3. Keep Good Records

Keep all your bills and receipts safe.

Record the GST you collect from customers
Also write down the GST you pay when buying business items

4. Use GST-Inclusive Pricing If Needed

If your shop shows final prices to customers, the GST should be included.

So if your item is tagged SGD 54.50, that should already include the 9% GST.
This makes it easy for shoppers to know what they will pay.
Just make sure your invoice still shows how much of that is GST.

5. Update Your System

If GST rates change, like from 8% to 9%, make sure your cash register, POS system, and billing software are updated.

This keeps your billing correct
You will charge the right amount every time
Ask your accountant or software support team for help if you are unsure.

6. Register for GST (If Not Already)

Before you charge GST, you must register your business with IRAS (Inland Revenue Authority of Singapore).

If you make more than SGD 1 million in 12 months, it is required
You will get a GST registration number
You should never charge GST if you are not yet registered!

7. Report GST Every Quarter

Most GST-registered businesses need to file a GST report every 3 months.

This is called the GST return
You show how much GST you collected
You also show how much GST you paid
The difference is what you pay to the government (or claim as refund).

8. Train Your Staff

Make sure your team knows:

When to add GST
How to make proper invoices
What to say if a customer asks about GST
This helps avoid mistakes and keeps customers happy.

Important Aspects of GST in Singapore

1. GST Is a Broad-Based Tax

In Singapore, GST is charged on most goods and services. This includes things made in Singapore and items brought in from other places. But some things are not taxed, like exports, homes where people live, and money services like loans or insurance.

2. When You Must Register for GST

If a business earns more than S$1 million in 12 months, it must register for GST. If a business thinks it will go over this amount soon, it must also register. Some small shops can still sign up if they want to, but they must follow the rules set by IRAS (the tax office).

3. Getting GST Input Tax Credit

If a business is registered for GST, it can get back the tax it paid on things it bought for work. This is called input tax credit. It helps lower the total tax the business pays. That way, only the final customer pays the full GST.

4. What Is Zero-Rated and Exempt?

Zero-rated supplies are taxed at 0%. These are things like exports and foreign services. Businesses can still claim input tax credits for these.
Exempt supplies are not taxed, and no input tax credits can be claimed. This includes money services and homes for people to live in.

5. Filing GST and Making Payments

Businesses that are registered for GST must file a GST return every 3 months. They also have to pay the tax they owe to IRAS. If they don’t do this on time, they may have to pay fines or face legal trouble.

Benefits of Being GST-Registered

If your business is GST-registered, you get many helpful things. These benefits make your business stronger and more trusted. Let’s look at the main reasons why GST in Singapore is good for your business:

Claim Back GST on Business Buys
When you buy tools, stock, or supplies for work, you pay GST in Singapore. But if you are registered, you can claim this money back. That means more savings!

Look More Professional
Being GST-registered shows that your business is legal and trusted. People will take you more seriously.

Work with Bigger Clients
Big companies, banks, and overseas firms often want to work only with GST-registered businesses. It helps you get more and better customers.

Build Better Business Credit
When you are registered and file GST reports on time, it shows that you are honest and good with money. This helps if you ever need a loan from the bank.

Join Government Projects or Tenders
Some jobs from the Singapore government only go to businesses that are GST-registered. If you want to do big jobs, being registered can help.

Easy to Track Taxes
When you collect and pay GST in Singapore, your numbers are easy to track. This helps when doing your taxes each year.

Stay Ahead of the Rules
When you register for GST, you start following better rules early. This makes your business ready to grow.

Avoid Fines Later
If your sales grow above the limit (S$1 million), and you don’t register for GST, you can get a fine. Registering early helps you avoid that.

Good Record-Keeping Habits
Once you are GST-registered, you must keep better records. This means your business stays clean, neat, and smart.

Get Trusted by Buyers
Buyers trust you more when they see you charge GST in Singapore properly. It shows you run your business by the law.

Common GST Mistakes to Avoid

If you are not careful, mistakes can happen. Some mistakes may cost you money or lead to tax problems.

Charging GST Without Being Registered
You are not allowed to charge GST in Singapore if your business is not registered yet. This is a big mistake.
Charging the Wrong GST Rate
From 2024, the GST rate is 9%. Don’t use old rates like 8% or 7%.
Forgetting to Add GST in Invoices
Always show the GST amount on every bill or invoice. If you forget, customers may complain.
Not Paying GST to IRAS
If you collect GST from customers, you must send it to the government. Don’t keep that money.
Missing the Filing Date
Don’t forget the deadline to file your GST return. Missing it can lead to fines or extra charges.

Conclusion

Understanding and charging GST in Singapore is very important for your business. If you are GST-registered, you must charge the right GST, keep records, and send reports on time. This helps you follow the law and also grow your business.

You can also claim back GST on things you buy for work. It makes your business look more trusted and professional. If you need help, Meru Accounting is here for you. We know how to manage GST in Singapore and will make sure your business stays safe and smart with the rules.

FAQs

Do all businesses in Singapore charge GST?
No, only businesses that are GST-registered can charge GST.
What happens if I forget to file my GST return?
IRAS may charge you a fine or penalty for late filing.
Can I claim GST on my business expenses?
Yes, if you are GST-registered, you can claim GST on items you buy for business use.
Do I need to charge GST on services for overseas clients?
No, these are usually zero-rated services, and you do not charge GST.
How do I know if I need to register for GST?
If your business makes over SGD 1 million in sales per year, you must register for GST.