29 November 2021

On 2 November 2021, the Goods and Services Tax (Amendment) Bill (“Bill”) was passed.

This Bill seeks to amend the Goods and Services Tax Act (“Act”) primarily to:

  • Introduce goods and services tax (“GST”) on imported low-value goods and business-to-consumer (“B2C”) imported non-digital services

Currently, GST is imposed on all goods imported via land or sea, regardless of value. GST is also imposed on goods imported by air or post with a value above S$400. There is currently no GST on goods imported by air or post with a value of S$400 and below. This is a gap which puts local businesses at a disadvantage. To close this gap, GST will be introduced for goods that are valued up to the current GST import relief threshold of S$400, or “low-value goods”, that are imported via air or post from 1 January 2023 onwards.

The Bill will also introduce GST for B2C, imported non-digital services, such as live interaction with overseas providers of educational learning and telemedicine.

The extension of GST to such imported low-value goods and B2C imported non-digital services will complement the GST that is already levied on business-to-business, or “B2B”, imported services, and on B2C imported digital services.

  • Update GST treatment for supply of media sales

The Bill will also amend the Act to update the GST treatment for a supply of media sales. Media sales refer to the sale of advertising space for hardcopy print and outdoor advertisements, advertising airtime for broadcasting via TV and radio, and web advertising via email, internet or mobile devices.

Currently, the basis for determining whether a supply of media sales is zero-rated or standard-rated depends on the place of circulation of the advertisement. If the media sales are circulated in Singapore, GST applies. If they are circulated abroad, then the supply of media sales is zero-rated.

However, as this is no longer reflective of the state of media sales today, with effect from 1 January 2022, the GST treatment for a supply of media sales will instead be based on where the person who contracts for the service, for example, a local or overseas headquarters, and the person who directly benefits from the service, such as a subsidiary in Singapore, belong. For example, if the contractual customer of the media sales service belongs in Singapore, GST will be charged at the standard rate.

The Bill will also introduce changes to the Act to clarify GST treatment and to improve GST administration.

Reference materials

The following materials are available on the MOF website www.mof.gov.sg and Singapore Statutes Online sso.agc.gov.sg: