It is highly advisable to begin your preparation well in advance to ensure a seamless transition to the GST rate of 9% on January 1, 2024. This preparation may involve making necessary adjustments to your point-of-sale, invoicing, accounting, and other operational systems. Additionally, updating your price displays to reflect the new rate will be essential.
In Budget 2022, the Minister for Finance announced that the GST rate will be increased from:
(i) 7% to 8% with effect from 1 Jan 2023; and
(ii) 8% to 9% with effect from 1 Jan 2024.
The revenue from the increase in GST will go towards supporting our healthcare expenditure, and to take care of our seniors.
The applicable GST rate should be based on the prevailing rate at the time of supply. If you issue an invoice or receive payment for your supply in 2023, the GST rate to charge is 8% on the supply.
However, if you issue an invoice and receive payment for your supply on or after 1 Jan 2024, the applicable GST rate is 9% on the supply, unless you have chosen to charge GST at 8% under the rate change transitional rules, subject to certain conditions for the election.
Regardless of whether you have collected the GST payment from your customers, if you are required to charge GST at 9% on the supply on or after 1 Jan 2024, you must account for GST at 9% in your GST return.
If you don't charge the correct GST rate on your supplies, you may face penalties. Being ready for the GST rate change can help you avoid these extra costs for your business and ensure you comply with the regulations.
When showing prices to the public, you must include the GST in the displayed price. This applies to price tags, lists, ads, brochures, and websites. People should know the final price upfront.
Hotels and food & beverage (F&B) places that charge a service fee are exempted from displaying GST-inclusive prices. Instead, they must inform customers that the displayed prices are subject to both GST and the service charge.
However, this exception doesn't apply to hotels and F&B places without a service charge or those with a nominal service fee without a valid reason. They must still display GST-inclusive prices. Failure to comply may result in fines.
If updating your price displays immediately is not possible, you can show two prices:
Prices inclusive of 8% GST, applicable before 1 Jan 2024.
Prices inclusive of 9% GST, applicable from 1 Jan 2024 onwards.
Businesses have been seen increasing prices or fees during the GST rate change from 7% to 8%. Some have attributed the increase mainly or solely to the GST change, while others considered higher raw material and overhead costs.
Before the GST rate change from 8% to 9%, businesses should be open about their price increases. They need to communicate the main reasons for the changes and avoid misleading consumers by solely blaming the GST.
The Committee Against Profiteering (CAP) takes any unjustified price hikes using the GST increase as an excuse seriously and investigates such cases based on public feedback.
To help consumers understand your price increase, share the reasons, effective date, and the price before and after the increase. CAP will investigate cases where businesses wrongly use the GST as a cover for unreasonable price hikes of essential goods and services.
Remember, misrepresenting the reasons for price increases is not acceptable and can mislead consumers. Be transparent to maintain trust with your customers.
Please refer to this link or reach out to us directly for further assistance.
🌐 Visit our website: https://www.expede.com.sg/
☎️ Call us: +65 8853 6295
Comments