GST refers to the tax levied on the importation of goods and is collected by a country’s customs authority. In some countries, GST is referred to as VAT which stands for value-added tax. The following is a discussion of the various registration conditions.
For Compulsory Registration
How liable you are for GST registration in Singapore is solely dependent on the value of your taxable turnover. It basically means the value of goods and services that the GST terms as taxable for you. Registration is a must under the following conditions.
A Retrospective View
In case your taxable turnover is $1 million or more at the end of the calendar quarter. You have to monitor your taxable turnover at the end of every twelve months to determine if it exceeds one million dollars and if so go ahead and register for GST. A GST registration calculator can help you greatly in monitoring your registration liability.
A Prospective View
In case that your taxable turnover is expected to exceed one million dollars, you need to have all the right documentation to support your forecast value. The documents include signed contracts or agreements, quotations accepted by customers, confirmed purchase orders received by customers, invoices of customers with fixed monthly charges and income statements showing that the taxable turnover tax of the past 12 months is close to $1 million and is still increasing. However, you are not entitled to make GST registration if your forecast for the next 12 months shows that your taxable turnover will not exceed one million dollars. You could make an assessment based on the market conditions or business targets.
Exceptions for GST registration
You are not required by the law to do GST registration in the following situations when your taxable turnover is mainly from zero-rated supplies. You can also choose to apply for an exemption from the registration. It should be noted that you are liable for GST registration under the retrospective view but not under the perspective view but only if the following conditions have been met. If you are sure that your taxable turnover will not exceed one million dollars for the next 12 months, if the taxable turnover is projected to be lower due to unavoidable circumstances such as large-scale downsizing of business and if you have all the right documents to back up your claims.
If you are not liable for GST registration you may also choose voluntarily to register, but only after you have considered the issue very carefully.
Notification Period and the Right Time for Registration
It is a requirement for you to make GST registration in Singapore within 30 days from the time that you become liable to make a registration. The effective day for registration is highlighted below.
For a retrospective view, you will be liable to make a registration on the first day of the third month following the end of the calendar quarter. On the other hand, for a perspective view, you will be liable for a registration on the 31st day from the forecast day. Late registration has very serious consequences including backdating and heavy fines.