Do Not Treat Your Quarterly GST Submissions Lightly!
Ignorance of the law is not an Excuse…
Below are 2 common areas of GST filing mistakes, hope they can help you be more aware :
(1) Disallowed Input GST Tax Claims
Regulations 26 and 27 of the GST (General) Regulations do not allow the following expenses to be claimed as input tax:
· Benefits provided to the family members or relatives of your staff;
· Costs and running expenses incurred on motor cars that are either:
o registered under the business’ or individual’s name, or
o hired for business or private use.
· Club subscription fees (including transfer fees) charged by sports and recreation clubs;
· Medical expenses incurred for your staff unless they are obligatory under the Work Injury Compensation Act or under any collective agreement within the meaning of the Industrial Relations Act;
· Medical and accident insurance premiums incurred for your staff unless the insurance or payment of compensation is obligatory under the Work Injury Compensation Act or under any collective agreement within the meaning of the Industrial Relations Act; and
· Any transaction involving betting, sweepstakes, lotteries, fruit machines or games of chance.
(2) GST on Recovering Expenses
The GST treatment for the recovery of expenses from another party such as your employees, customers, related corporations or suppliers, depends on whether the expenses are incurred by you as a principal or as an agent.
For the purpose of GST, the term “reimbursement” refers to the recovery of an expense that you incur as a principal from another party.
A reimbursement may be subject to GST if it is consideration for a supply of goods or services.
On the other hand, the recovery of a payment made on behalf of another party by you as an agent is termed as a “disbursement”.
A disbursement does not constitute a supply and hence, is not subject to GST.
The 3rd common area of GST filing mistake is in E Commerce companies. I have already covered this area at great length much earlier in my sharing, hence I would not repeat here.
Hope above pointers help you be more aware not to under-estimate your quarterly GST Filings for IRAS conducts regular GST audits, and who knows, you may be picked as next GST audit target.
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