On 2 April 2024, the Goods and Services Tax (Amendment) Bill (“Bill“) was passed in Parliament. The Bill will amend the Goods and Services Act 1993 to improve clarity on the applicability of goods and services tax (“GST“) to fees charged by the Government, as well as fees charged by public agencies (collectively, “Government Fees“). By way of background, these legislative amendments arose from the discovery of wrongful charging of GST by six agencies, as reported in the Straits Times article titled “Govt to refund $7.5m in GST wrongly collected by 6 agencies over 5 years“. To avoid such issues in future, the Government will centralise the assessment of whether GST should be charged, rather than leaving public agencies to perform their own assessments. The key amendments introduced by the Bill are: (a) Clarifying that GST will be charged for all Government Fees, excepting the fees prescribed in a list that will be published end-April 2024 (“Non-taxable List“). In essence, fees that are regulatory in nature will not be subject to GST, whereas fees for the provision of services will be subject to GST. (b) As fees charged by public agencies are now explicitly subject to GST: Inserting a definition of “public agency”, namely any ministry, department or Organ of State of the Government (or public officer thereof), as well as body corporates established by a public Act for public functions. Town Councils are excluded from this definition. (c) Deeming all GST imposed previously on Government Fees to have been validly imposed, save for those set out in the Schedule to the Bill. In practice, more than 100 Government Fees will be newly charged with GST moving forward. These include examination and inspection-related fees. To cushion the impact, the Government will absorb the GST on these fees in the first instance, and impose a freeze on these fees until end-2025. Click on the following links for more information:
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