We refer to Mr Lim Ing Yew’s letter (“Can GST be charged on subsidised course fees instead?”, ST, 6 July) regarding GST on subsidised course fees. GST is charged based on the value of their goods and services. This is consistent in the three examples mentioned by Mr Lim.   

In the case of the training service providers, the value of the training service is the amount that they charge for it. The Government course fee support offsets the cost that the trainee has to pay to the training service provider, but does not change the value of the training service provided. Hence, the training service provider in Mr Lim’s example correctly charged GST of $50.40 on the training course of $720. The Government-provided course fee subsidy helps the trainee by shouldering $648 of the GST-inclusive price of $770.40.   

Mr Lim mentioned that his tax invoice from the Singapore General Hospital (SGH) showed that GST was computed on $19.40. The $19.40 is the balance of the bill payable after direct government subsidies to public hospitals and polyclinics, which help subsidised patients to receive medical services at lower prices. The GST was correctly computed based on the subsidised price of $19.40, but the Government also absorbs this GST amount for subsidised patients, so that no actual GST is paid by subsidised patients for their subsidised treatments.   

We thank Mr Lim for the opportunity to clarify on treatment of the GST.   

Kelly Wee (Ms)
Director (Corporate Communications)
Inland Revenue Authority of Singapore