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Areas of Focus for 2016-2017 GST Audit
Posted on Dec 01, 2016

IRAS recently announced that it will step up GST audits on large businesses and checks on businesses’ display of GST-inclusive prices to the public in 2016 and 2017 (click here for announcement by IRAS).

According to IRAS, large businesses form 2% of the GST taxpayer population, although they account for more than 50% of the total GST payable. IRAS has found that large businesses generally have more complex business arrangements, as well as voluminous and high-value transactions.

To reduce compliance cost, more of these large businesses are outsourcing their finance functions to a shared service centre located outside Singapore, which may not be familiar with Singapore GST rules and regulations. This inevitably raises the risk of GST errors being made.

IRAS will be checking the GST compliance of large businesses from various industries, including conducting field visits on them. GST errors or omissions discovered through the audit will attract penalties of up to two times the amount of tax underpaid, and a 5% late payment penalty.

The other area of focus is the display of prices by GST-registered companies. With the exception of the hotel and food & beverage industries, which may display GST-inclusive prices for goods and services that are subject to service charge, all GST-registered businesses are required to show GST-inclusive prices prominently in all displays, advertisements, publications and quotations to the public.

It is an offence to display only prices excluding GST, or to display GST-exclusive prices more prominently than GST-inclusive prices. Non-compliance can result in a fine of $5,000 or in default of payment, a jail term of up to 6 months.

Given that GST is administered on a self-assessment basis, the onus of filing correct GST returns falls on the GST-registered business. If your company falls into these 2 areas of focus, are you complying with IRAS' requirements? If you're unsure about GST treatment, enhance your knowledge in our flagship Mastering the Basic & Intermediate Concepts of GST workshop.