GST on all imported goods purchased online from 2023 under proposed changes to Act

SINGAPORE: Goods and Services Tax (GST) is set to be imposed for all imported goods from 2023 under proposed changes to the Goods and Services Tax Act made through the Goods and Service Tax (Amendment) Bill which was tabled by the Ministry of Finance (MOF) for a first reading on Monday (Oct 4). 

One of these changes could see GST introduced from Jan 1, 2023 on low-value goods imported via air or post, and business to consumer (B2C) imported non-digital services such as live interaction with overseas providers of educational learning and telemedicine.

Currently, these imported goods and services are not subject to GST.

Deputy Prime Minister and Finance Minister Heng Swee Keat said in his Budget speech earlier this year that the move will cover goods valued up to S$400.

This effectively imposes GST on all online shopping from overseas retailers, as imported goods brought in via sea or land, or valued above S$400, are already subjected to GST.

"The extension of GST to such imported low-value goods and B2C imported non-digital services complements the existing GST measures on business-to business (B2B) imported services and B2C imported digital services that took effect from 1 January 2020," said MOF in a media factsheet for the Bill.

"Together, they ensure a level playing field for our local businesses to be competitive. Overseas suppliers of goods and services will be subject to the same GST treatment as local suppliers. This change also keeps our GST system resilient in a growing digital economy."

Another proposed change will see an update to the GST treatment for supplies of media sales. Such sales refer to the sale of advertising space for hardcopy print and outdoor advertisements, the sale of advertising airtime for broadcasting via TV and radio, and the sale of media space for web advertising via email, internet or mobile devices.

From Jan 1 next year, the GST treatment will be based on where the customer and where the direct beneficiary of the service belongs, rather than where the advertisement is circulated.

If the customer of the service belongs outside Singapore and the direct beneficiary either belongs outside Singapore or is GST-registered in Singapore, the media sales will be zero-rated. Otherwise, GST will be chargeable at the standard rate, said MOF

Other proposed changes will aim to "improve GST administration and the clarity of existing legislation", said the ministry.

These amendments include an update of the transitional rules, which determine whether an old or new GST treatment applies, for changes in GST treatment, as well as another to make miscellaneous changes to the existing Overseas Vendor Registration regime and Reverse Charge regime. Both regimes are used to impose GST on imported low-value goods, and/or imported B2B or B2C services.

The ministry also noted that the Bill has taken into account the feedback received during MOF’s public consultation on the draft GST (Amendment) Bill 2021 from Jul 6 to 27 this year.