Unveiling the GST Rate Change Effective 1 January 2024

🌟 Important update!Singapore had geared up for a phased increase in GST rates. Starting from January 1, 2023, it rose to 9% on January 1, 2024. This boost in revenue aimed to meet important needs, especially in healthcare and senior care.

👀 Stay Informed! Keep an eye on prices and payments for goods and services scheduled for delivery in 2024.

Navigating Price Displays Post-GST Increase

For clarity, GST-registered businesses were required to display prices inclusive of GST. During the transition, dual prices were allowed:

  • 8% GST for transactions before Jan 1, 2024.
  • 9% GST for transactions on/after Jan 1, 2024.

Hotels and F&B places with service charges had some flexibility but were mandated to convey GST and service charges clearly.

Important Note: Non-compliance could lead to fines, and businesses couldn’t charge GST at 9% before Jan 1, 2024.

Navigating GST Payments: Transitioning Smoothly

Understanding the correct GST to pay was crucial for businesses and consumers. Before Jan 1, 2024, it was 8%, and after that, it is 9%. Special rules are applied for transactions spanning the rate change.

Impact on Consumers

1. GST Chargeable on Purchases

Before Jan 1, 2024: 8%After Jan 1, 2024: 9%

If transactions involved events like the issuance of an invoice, payment, or receipt of goods or services spanning Jan 1, 2024, special GST rules may have applied.Example 1On 14 Dec 2023, you purchased goods to be delivered on 10 Jan 2024. You received a tax invoice on 14 Dec 2023, and full payment was received by the supplier on the same day.Solution:

GST is chargeable at 8% since full payment was received by the supplier for the goods before 1 Jan 2024.Example 2On 14 Dec 2023, you purchased $500 worth of goods to be delivered on 10 Jan 2024. You received a tax invoice on 14 Dec 2023, and part payment of $200 was received by the supplier on the same day. The remaining payment of $300 will be received by the supplier in 2024.Solution:

GST is chargeable at 8% on the part payment of $200 received by the supplier in 2023 and at 9% on the remaining payment of $300 received by the supplier in 2024.Example 3You received a tax invoice on 21 Dec 2023 for cleaning services provided to you on 20 Dec 2023. Payment was received by the cleaning service provider on 14 Jan 2024 when the prevailing GST rate was 9%.Solution:GST is chargeable at 8% since you received both the invoice and the services in 2023.Example 4You received a tax invoice on December 10, 2023, with an 8% GST for cleaning services on December 20, 2023, and January 20, 2024. The cleaning service provider received payment on January 20, 2024. Solution:

GST is 8% for services in 2023 and 9% for services on/after January 1, 2024. The supplier will give you a credit note to adjust the 8% GST on the cleaning services received on January 20, 2024. A new bill will be sent to you with 9% GST for the cleaning service on January 20, 2024.

2. Price Displays by Businesses

Starting Jan 1, 2024, displayed prices had to incorporate a 9% GST rate.Dual prices could be used temporarily, but businesses couldn’t collect GST at 9% before Jan 1, 2024.

3. Reporting Wrong GST Practices

  • Charging and collecting GST at 9% prior to January 1, 2024
  • Charging and collecting GST without proper GST registration
  • Failing to comply with price display regulations
  • Failing to comply with invoicing requirements

       Report incorrect practices here.

4. Unfair Price Hikes and GST

Businesses could not blame price increases only on the upcoming GST change or use the GST hike as an excuse for raising prices too much afterward. If you notice unjustified price increases, report to the Committee Against Profiteering (CAP).

Final Thoughts

📢 Your cooperation makes the transition smoother! Let us help you unlock the full potential of your SMEs and navigate these changes together. Reach out to us by email at contact@accountingsuperhero.com or connect with us on Facebook or Instagram. We are here to support you and help propel your business growth to new heights!