Eleven suggestions received on the draft Goods and Services Tax (Amendment) Bill 2015

1. Between 13 July and 31 July 2015, the Ministry of Finance (MOF) conducted a public consultation on the draft Goods and Services Tax (GST) (Amendment) Bill 2015 and related subsidiary legislation. The amendments to the GST Bill are introduced to implement changes arising from MOF’s review of the GST system and administration conducted between 2014 and early 2015.

2. A total of 11 suggestions were received during the consultation exercise and 7 will be accepted and incorporated into the revised GST (Amendment) Bill and related subsidiary legislation, or in IRAS’ e-tax guides and website. The remaining 4 suggestions were not accepted for implementation as they were inconsistent with the policy objectives of the proposed changes.

3. The changes covered in the July 2015 public consultation are as follows:

a. Allowing the Comptroller of GST to impose a Travel Restriction Order on a person who fails to repay a tourist refund wrongly claimed under the Tourist Refund Scheme. Under the Tourist Refund Scheme, only eligible tourists are allowed to claim a refund of the GST paid on goods purchased in and brought out of Singapore. Currently, the Comptroller of Income Tax and the Comptroller of GST have the power to impose a Travel Restriction Order on a person who fails respectively to pay income tax or GST that is due to the Government. Given that a wrongful tourist refund owed is no different from a tax due to the Government, the Comptroller of GST will be granted powers to impose a Travel Restriction Order on a person who fails to repay a tourist refund wrongly claimed under the Tourist Refund Scheme. This ineligible claimant will be allowed to leave the country after he repays the refund wrongly claimed;

b. Revising the definition of “aircraft” for the purpose of zero-rating supplies made in relation to an aircraft, and extending zero-rating to specific supplies made in relation to non-qualifying aircraft. The policy intent is to zero-rate supplies of and supplies relating to aircrafts that are used for international travel and international transportation of passengers and goods. In line with the policy intent, the definition of “aircraft” will be revised to refer to any aircraft that is wholly used or intended to be wholly used for international travel, or any military aircraft. Zero-rating will also be extended to specific supplies relating to international flights made by a non-qualifying aircraft, as they are regarded as consumed outside Singapore;

c. Clarifying the scope of zero-rating in relation to merchandise for sale on board an aircraft or ship. This is a technical change to clarify that zero-rating applies to the supply of goods for use as merchandise for retail sale on board an aircraft or ship.

4. Further details of key suggestions received, along with MOF’s responses, can be found in the Annex (PDF, 183KB).

5. MOF would like to thank all respondents for their suggestions.

Ministry of Finance