We refer to the letter “Query on taxes on discounted meal” (ST Forum, 14 Oct 2014) by Mr Chiok Beng Piow.

Mr Chiok had purchased a Groupon deal for lunch at a restaurant. He asked if the Goods and Services Tax (GST) should be charged on the original price of the lunch of $71 or the discounted price of $38.80.

For discount vouchers which specify the goods or services to be redeemed, GST is charged at the discounted price since this represents the actual value of the goods or services sold. Hence, in Mr Chiok’s case, the GST should have been charged on the discounted price.

IRAS has contacted the restaurant to clarify the correct GST treatment. Mr Chiok can also check with the restaurant on how he can seek a refund for the excess GST paid.

GST-registered merchants and consumers can refer to the e-Tax Guide “GST Treatment of Vouchers” available at www.iras.gov.sg for IRAS’ guidelines on the GST treatment on sale and redemption of vouchers.

We thank Mr Chiok for the opportunity to clarify the GST treatment.

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