SUMMARY TABLE ON PROPOSED NON-BUDGET CHANGES TO THE GST ACT

Note: You may download the summary table, as well as other relevant documents here.

No. / Tax Change / Description and Reason for Change / Amendment to GST Act
2 / Zero-rating of Prescribed Financial Services relating to Goods Situated outside Singapore / Currently, zero-rating is provided for prescribed financial services supplied directly in connection with goods for export (in section 21(3)(h) of the GST Act).
Examples of zero-rated financial services include export credit and trade credit insurance provided by insurance companies or bank services to facilitate payment under letters of credit and factoring of receivables.
The GST Act will be amended to extend zero-rating to include situations where the prescribed financial services relate to supplies where the goods are moved between two places outside Singapore.
In addition, we will remove the word ‘directly” from section 21(3)(h) of the GSTA to bring about a more practical application of the zero-rating provision for prescribed financial services in connection with exports. The removal of the word does not alter the policy intent nor unduly widen the scope of zero-rating.
The changes are in line with the existing GST zero-rating concessions to maintain international competitiveness of our exports.
For more information on the change, please refer to the draft Goods and Services Tax (International Services) (Amendment) Order 2012.
The changes will take effect from 1 October 2012. / Section 21(3)(h)
[Clause 4(b)]
3 / Review of Powers to Grant Remission / Currently, the Comptroller of GST and Minister are given the discretionary powers to grant relief, remission or refund of the whole or part of GST on grounds of poverty or where it is just and equitable to do so.
Both the Comptroller and Minister do not have explicit powers to impose any conditions when granting the remission or relief on case-by-case basis.
The GST Act will be amended to make the following changes to the Minister and Comptroller’s powers in granting GST remission:
(a)Allow Comptroller to set conditions when granting remission under Section 89(1) of the GST Act;
(b)Allow Minister to set conditions when granting remission under Section 89(2) of the GST Act;
(c)Provide for the recovery of the tax remitted when the person fails to comply with the conditions for the remission; and
(d)Prescribe that the tax to be recovered shall be payable to the Comptroller within 1 month after the service of a notice, unless otherwise extended by the Comptroller.
The powers to impose conditions are necessary in certain circumstances, such as when input tax credits are remitted[1] or to prevent abuse of the remission granted.
The proposed amendments are consistent with changes that have already been made to the remission framework for income tax.
The change will take effect from 1 October 2012. / Section 89
[Clause 10]
4 / Extension of Temporary Removal Scheme to allow removal of goods for repair activities / The Temporary Removal Scheme to allow goods[2] to be removed from an approved warehouse for auctions and exhibitions, without the payment of import GST. This was to promote auctions and exhibitions and use of specialised storage facilities in Singapore. These goods must be returned to the warehouse after the auction or exhibition event, failing which import GST would be payable.
The qualifying purposes for which goods can be removed under the Temporary Removal Scheme will be extended to activities of repair, including conservation or restoration of goods. The proposed change is a pro-business move that will cater for damaged goods to be removed temporarily from the warehouses for repair, conservation and restoration.
The change will take effect from 1 October 2012. / Section 37
[Clause 6]
5 / Zero-rating of repair services performed on qualified goods outside of the Approved Specialized Warehouse / Currently, we allow the zero-rating of repair (i.e. conservation and restoration services) on qualified goods stored in an Approved Specialised Warehouse (“ASW”) and those that are temporarily removed from ASW for auctions and exhibitions.
To cater for off-site repairs, we will allow the zero-rating of repair services such as conservation and restoration services performed on qualified goods that are temporarily removed from the Approved Specialised Warehouse. This is consistent with the zero-rating principle as the services are provided on qualified goods belonging to overseas persons.
This is facilitative for specialised storage business as it may not be practical for all repairs to be done within ASW.
The change will take effect from 1 October 2012. / Section 21(y)
[Clause 4(c)]
6 / Technical change to zero-rating relief for specified supplies made to Approved Marine Customers and specified supplies relating to goods kept in an Approved Specialised Warehouse / The GST Act will be amended to make section 21 subject to sections 21B and 21C (which provide for the zero-rating of certain supplies made to Approved Marine Customers and certain supplies relating to goods kept in an Approved Specialised Warehouse, notwithstanding that they are neither supplies of goods for export nor supplies of international services referred to in section 21).
There will also be a technical amendment to section 21(4A) to include a reference to section 21(3)(y).
There is no change in policy. / Section 21(1), 21(4A)
[Clause 4(a) and 4(d)]
7 / Technical change to Approved Contract Manufacturer & Trader (ACMT) Scheme / This is a technical amendment to tidy up the language in the Approved Contract Manufacturer & Trader (ACMT) Scheme to align with the wordings therein with those used in section 37A(1). There is no change in policy. / Section 37A
[Clause 7]

[1] An example is a remission of input tax credits under Section 89 to a non-taxable person for tax incurred on land purchased for residential development. The non-taxable person should be subject to the same conditions imposed on a taxable person who make a claim of such input tax under Regulation 41, including that he must have paid for the purchase and GST on the land and obtained Written Permission to develop wholly residential or mixed developments.

[2] Goods under the Temporary Removal Scheme refer to non-dutiable goods and selected dutiable wines.