Goods and Services Tax (General) (Amendment) Regulations 2007

No. S 327

Goods and Services Tax Act

(Chapter 117A)

Goods and Services Tax (General) (Amendment) Regulations 2007

In exercise of the powers conferred by sections 21A, 29, 46(1)(g) and 86(1) of the Goods and Services Tax Act, the Minister for Finance hereby makes the following Regulations:

Citation and commencement

1. These Regulations may be cited as the Goods and Services Tax (General) (Amendment) Regulations 2007 and shall come into operation on 1st July 2007.

Amendment of regulation 27

2. The Goods and Services Tax (General) Regulations (Rg 1) (referred to in these Regulations as the principal Regulations) are amended by renumbering regulation 27 as paragraph (1) of that regulation, and by inserting immediately thereafter the following paragraph:

“(2) Paragraph (1) shall not apply to any supply or importation of goods or supply of services used by an insurer directly in connection with a motor car of a person who contracted with the insurer for the insurance cover on that motor car, where the insurance cover commences on or after 1st January 2007.”.

Amendment of regulation 37

3. Regulation 37 of the principal Regulations is amended —

(a)

by deleting the words “a period of 6 years commencing on the first day of the prescribed accounting period which the attribution was determined” in the 7th and 8th lines of paragraph (1) and substituting the words “the relevant period”; and

(b)

by inserting, immediately after paragraph (5), the following paragraph:

“(6) In this regulation, “relevant period” means —

(a)	where the prescribed accounting period during which the attribution of input tax referred to in paragraph (1) was determined ends before 1st January 2007, a period of 6 years commencing on the first day of that prescribed accounting period; or
(b)	where the prescribed accounting period during which the attribution of input tax referred to in paragraph (1) was determined ends on or after 1st January 2007, a period of 5 years commencing on the first day of that prescribed accounting period.”.

Amendment of regulation 38

4. Regulation 38 of the principal Regulations is amended —

(a)

by deleting the words “a period of 6 years commencing on the day of the supply to him of the assets” in the 7th and 8th lines of paragraph (1) and substituting the words “the relevant period”; and

(b)

by inserting, immediately after paragraph (5), the following paragraph:

“(6) In this regulation, “relevant period” means —

(a)	where the prescribed accounting period during which the supply referred to in paragraph (1) was made ends before 1st January 2007, a period of 6 years commencing on the day the supply was made; or
(b)	where the prescribed accounting period during which the supply referred to in paragraph (1) was made ends on or after 1st January 2007, a period of 5 years commencing on the day the supply was made.”.

Amendment of regulation 39

5. Regulation 39 of the principal Regulations is amended —

(a)

by deleting the words “a period of 6 years commencing on the first day of the prescribed accounting period in which the attribution was determined” in the 7th and 8th lines of paragraph (1) and substituting the words “the relevant period”; and

(b)

by inserting, immediately after paragraph (3), the following paragraph:

“(4) In this regulation, “relevant period” means —

(a)	where the prescribed accounting period during which the attribution of input tax referred to in paragraph (1) was determined ends before 1st January 2007, a period of 6 years commencing on the first day of that prescribed accounting period; or
(b)	where the prescribed accounting period during which the attribution of input tax referred to in paragraph (1) was determined ends on or after 1st January 2007, a period of 5 years commencing on the first day of that prescribed accounting period.”.

New regulation 41A

6. The principal Regulations are amended by inserting, immediately after regulation 41, the following regulation:

“Input tax deemed incurred in relation to insurance cash payments

41A.—(1) This regulation shall apply where the period of insurance cover under a contract of insurance commences on or after 1st January 2007.

(2) Subject to paragraph (3), where the premium payable under the contract of insurance is subject to the tax rate in force under section 16 of the Act, the insurer shall be deemed to have incurred input tax on any cash payment made by him upon the occurrence of an insured event and which is obligatory under that contract of insurance (referred to in this regulation as deemed input tax), except in such situation as the Minister may decide otherwise for the protection of revenue.

(3) Paragraph (2) shall only apply where the contract of insurance is taken out by a person who, at the time the insurance cover commences under that contract —

(a)	is not registered under the First Schedule to the Act;
(b)	is a sole proprietor who is registered under the First Schedule to the Act and who purchased the insurance cover other than in the course or furtherance of his business;
(c)	where the contract is for medical and accident insurance, is registered under the First Schedule to the Act and is disallowed under regulation 26 from claiming any credit under sections 19 and 20 of the Act on any input tax incurred on the premium paid on that contract; or
(d)	where the contract is for motor car insurance, is registered under the First Schedule to the Act and is disallowed under regulation 27 from claiming any credit under sections 19 and 20 of the Act on any input tax incurred on the premium paid on that contract.

(4) Where an insurer incurs deemed input tax under paragraph (1) —

(a)	the cash payment made by the insurer to which the deemed input tax relates shall not be treated as consideration for any supply made to the insurer;
(b)	the amount of deemed input tax shall be an amount equal to the relevant tax fraction of the cash payment; and
(c)	the deemed input tax shall be treated as having been incurred by the insurer in the prescribed accounting period in which the cash payment was made by him.

(5) Except as the Comptroller may otherwise allow, an insurer making a claim for the deduction of deemed input tax shall keep a record of that claim consisting of information showing that —

(a)	the period of insurance cover under the contract of insurance commenced on or after 1st January 2007;
(b)	the premium payable under the contract of insurance was subject to the tax rate in force under section 16 of the Act;
(c)	the cash payment was made by him upon the occurrence of an insured event;
(d)	the payment was obligatory under the contract of insurance; and
(e)	the person who entered into the contract for insurance with him was a person specified in paragraph (3).

(6) If an insurer recovers from any person (other than his re-insurer under a re-insurance contract) the cash payment referred to in paragraph (2) or any part thereof —

(a)	the deemed input tax on the cash payment shall be reduced by an amount equal to the relevant tax fraction of the sum recovered in the prescribed accounting period in which the sum was recovered; and
(b)	where the insurer has claimed and deducted the deemed input tax, he shall account and repay to the Comptroller the amount of the adjustment in the prescribed accounting period referred to in sub-paragraph (a).

(7) In this regulation, “relevant tax fraction” means the fraction calculated in accordance with the following formula:

_________

100 + X

where X

is the rate of tax applicable to the insurance premium for the period of insurance cover giving rise to the cash payment.”.

Amendment of regulation 45

7. Regulation 45 of the principal Regulations is amended —

(a)

by deleting paragraph (1) and substituting the following paragraph:

“(1) A taxable person who is eligible under paragraph (2) may make an application to the Comptroller in relation to any or all of the following:

(a)

where goods not subject to a duty (whether customs duty or excise duty or both) are imported by the taxable person in the course or furtherance of any business carried on by him, for those goods to be delivered or removed without payment of the tax chargeable on the importation;

(b)

where imported goods not subject to a duty (whether customs duty or excise duty or both) but on which tax would apart from section 37 of the Act be chargeable are supplied to the taxable person whilst the goods are subject to a warehousing regime, and the supply —

(i)	is a supply which is not disregarded for purposes of section 37(1) of the Act; and
(ii)	is for the purpose of a business carried on by the taxable person,

for those goods to be removed from the warehousing regime without payment of the tax chargeable on the supply.”;

(b)

by inserting, immediately after paragraph (2), the following paragraph:

“(2A) A taxable person shall not provide the Comptroller with any false, misleading or inaccurate declaration or information in his application under paragraph (1).”;

(c)

by inserting, immediately after paragraph (3), the following paragraph:

“(3A) The applicant shall comply with all conditions imposed by the Comptroller under paragraph (3).”;

(d)

by inserting, immediately after paragraph (4), the following paragraph:

“(4A) A taxable person to whom approval has been granted under this regulation shall not use the approval, and shall take all steps to ensure that no other person uses the approval (whether on behalf of the taxable person or otherwise), except for the purposes for which the approval was granted.”; and

(e)

by inserting, immediately after paragraph (6), the following paragraphs:

“(7) Unless the Comptroller otherwise allows or directs, notwithstanding that no tax is payable —

(a)	a taxable person to whom approval has been granted under this regulation in relation to paragraph (1)(a) shall account for the tax chargeable on his importation of goods; and
(b)	a taxable person to whom approval has been granted under this regulation in relation to paragraph (1)(b) shall account for the tax chargeable on the supply to him of the goods, and section 37(2A) of the Act shall apply for the purpose of determining the time of the supply.

(8) Unless the Comptroller otherwise allows, where the taxable person approved by the Comptroller fails to comply with any condition or requirement imposed by the Comptroller under paragraph (3), he shall —

(a)	pay to the Comptroller without demand the amount of tax chargeable on the importation or the supply, as the case may be, to which the failure to comply relates; and
(b)	include the amount of tax referred to in sub-paragraph (a) as output tax in his return.”.

Amendment of regulation 45A

8. Regulation 45A of the principal Regulations is amended —

(a)

by deleting paragraph (1) and substituting the following paragraph:

“(1) A taxable person who is eligible under paragraph (3) may make an application to the Comptroller in relation to any or all of the following:

(a)

where goods not subject to a duty (whether customs duty or excise duty or both) are imported by the taxable person in the course or furtherance of any business carried on by him —

(i)	for those goods to be delivered or removed without payment of the tax chargeable on the importation; or
(ii)	for those goods to be delivered or removed, and supplied to such other taxable person as may be approved under this regulation or regulation 45 (referred to in this regulation as a specified person), without payment of the tax chargeable on the importation and on the supply;

(b)

(i)	is a supply which is not disregarded for purposes of section 37(1) of the Act; and
(ii)	is for the purpose of a business carried on by the taxable person,

for those goods to be removed from the warehousing regime without payment of the tax chargeable on the supply.”;

(b)

by inserting, immediately after paragraph (3), the following paragraph:

“(3A) A taxable person shall not provide the Comptroller with any false, misleading or inaccurate declaration or information in his application under paragraph (1).”;

(c)

by inserting, immediately after paragraph (4), the following paragraph:

“(4A) The applicant shall comply with all conditions and requirements imposed by the Comptroller under paragraph (4).”;

(d)

by inserting, immediately after paragraph (6), the following paragraph:

“(6A) A taxable person to whom approval has been granted under this regulation shall not use the approval, and shall take all steps to ensure that no other person uses the approval (whether on behalf of the taxable person or otherwise), except for the purposes for which the approval was granted.”;

(e)

by deleting paragraphs (8) and (9) and substituting the following paragraph:

“(8) Unless the Comptroller otherwise allows or directs, notwithstanding that no tax is payable —

(a)	a taxable person to whom approval has been granted under this regulation in relation to paragraph (1)(a)(i) or (ii) shall account for the tax chargeable on his importation of goods; and
(b)	a taxable person to whom approval has been granted under this regulation in relation to paragraph (1)(a)(ii) shall account for the tax chargeable on his supply of the goods to the specified person.”;

(f)

by deleting the words “paragraph (1)(b)” in paragraph (10) and substituting the words “paragraph (1)(a)(ii)”;

(g)

by inserting, immediately after paragraph (10), the following paragraphs:

“(10A) For the purposes of paragraphs (8)(b) and (10), the supply of goods under paragraph (1)(a)(ii) shall be treated as taking place at the earliest of the following times:

(a)	whenever a payment in respect of the supply is made;
(b)	whenever the goods are made available to or received by the specified person; or
(c)	whenever the specified person receives an invoice relating to the supply.

(10B) Unless the Comptroller otherwise allows or directs, notwithstanding that no tax is payable, a taxable person to whom approval has been granted under this regulation in relation to paragraph (1)(b) shall account for the tax chargeable on the supply to him of the goods, and section 37(2A) of the Act shall apply for the purpose of determining the time of the supply.”;

(h)

by deleting the words “paragraph (4)” in paragraph (12)(a) and substituting the words “paragraph (4) or (5)”; and

(i)

by deleting paragraph (13) and substituting the following paragraph:

“(13) Unless the Comptroller otherwise allows, where the taxable person approved by the Comptroller fails to comply with any condition or requirement imposed by the Comptroller under paragraph (4) or (5), he shall —

(a)	pay to the Comptroller without demand the amount of tax chargeable on the importation or the supply, as the case may be, to which the failure to comply relates; and
(b)	include the amount of tax referred to in sub-paragraph (a) as output tax in his return.”.

Deletion and substitution of regulation 56

9. Regulation 56 of the principal Regulations is deleted and the following regulation substituted therefor:

“Preservation of returns

56. A taxable person shall keep a record of every return which is furnished by the taxable person himself or by a filer on his behalf by way of the electronic service or otherwise to the Comptroller.”.

Amendment of regulation 58A

10. Regulation 58A of the principal Regulations is amended —

(a) by deleting the words “of goods of a taxable person in satisfaction of a debt” in the 3rd and 4th lines and substituting the words “using the goods of a taxable person in satisfaction of a debt owed by the taxable person”; and

(b)	by deleting the word “supplied” in the penultimate line and substituting the words “used in the making of the supply”.

Amendment of regulation 64

11. Regulation 64 of the principal Regulations is amended —

(a)

by deleting the words “at the rate of 2.13% per annum” in paragraph (1) and substituting the words “at the rate specified in paragraph (3)”; and

(b)

by inserting, immediately after paragraph (2), the following paragraphs:

“(3) For the purpose of paragraph (1) —

(a)	where any part of the interest period falls before 1st April 2007, the rate of interest for that part of the interest period shall be 2.13% per annum;
(b)	where any part of the interest period falls in the period from 1st April 2007 to 31st December 2007 (both dates inclusive), the rate of interest for that part of the interest period shall be the prime lending rate for 2006;
(c)	where any part of the interest period falls in the period from 1st January to 31st March of any year after 2007 (both dates inclusive), the rate of interest for that part of the interest period shall be the prime lending rate for the year immediately preceding the preceding year; and
(d)	where any part of the interest period falls in the period from 1st April to 31st December of any year after 2007 (both dates inclusive), the rate of interest for that part of the interest period shall be the prime lending rate for the preceding year.

(4) In this regulation —

“interest period” means the period for which interest is payable under paragraph (1);

“prime lending rate”, in relation to any year, means the average prime lending rate for the months of October, November and December of that year of such bank or banks in Singapore as the Minister may determine, rounded to the nearest 0.5%.”.

Amendment of regulation 75

12. Regulation 75 of the principal Regulations is amended —

(a)

by deleting the words “a period of 7 years, or such shorter period as the Comptroller may allow,” in paragraph (3) and substituting the words “the relevant period”; and

(b)

by inserting, immediately after paragraph (3), the following paragraph:

“(4) In this regulation, “relevant period” means —

(a)	where the prescribed accounting period during which the payment in money referred to in paragraph (3) was made ends before 1st January 2007, a period of 7 years from the end of that prescribed accounting period or such shorter period as the Comptroller may allow; or
(b)	where the prescribed accounting period during which the payment in money referred to in paragraph (3) was made ends on or after 1st January 2007, a period of 5 years from the end of that prescribed accounting period or such shorter period as the Comptroller may allow.”.

Amendment of regulation 83

13. Regulation 83 of the principal Regulations is amended —

(a)

by deleting the words “7 years from the date of supply or such longer period as the Comptroller may have allowed” in paragraph (2)(c) and substituting the words “the relevant period”; and

(b)

by inserting, immediately after paragraph (3), the following paragraph:

“(4) In this regulation, “relevant period” means —

(a)	where the prescribed accounting period during which the supply referred to in paragraph (1) was made ends before 1st January 2007, a period of 7 years commencing on the day the supply was made or such longer period as the Comptroller may have allowed; or
(b)	where the prescribed accounting period during which the supply referred to in paragraph (1) was made ends on or after 1st January 2007, a period of 5 years commencing on the day the supply was made or such longer period as the Comptroller may have allowed.”.

New regulation 106

14. The principal Regulations are amended by inserting, immediately after regulation 105, the following regulation:

“Zero-rating of supply of certain tools, etc.

106.—(1) For the purpose of section 21A(1)(a) of the Act, the prescribed tool used in the manufacture of goods for a person who belongs in a country outside Singapore shall be any mould, jig, pattern, template, die, punch or similar tool which —

(a)	is integral to the manufacture of the goods; and
(b)	is highly customised or specialised in nature for the sole purpose of the manufacture of the goods.

(2) The conditions prescribed for the purpose of section 21A(1) of the Act are as follows:

(a)

the prescribed tool shall be used by —

(i)	the taxable person; or
(ii)	such other person as may be approved by the Comptroller,

for the manufacture of the goods for the person who belongs in a country outside Singapore;

(b)

the prescribed tool shall not be used, consumed or made available in Singapore to any person other than —

(i)	the taxable person;
(ii)	the person who belongs in a country outside Singapore; or
(iii)	such other person as may be approved by the Comptroller;

(c)

the manufactured goods shall be substantially exported and the taxable person shall maintain records in relation to such export;

(d)

the supply of the prescribed tool or prototype of such tool and the supply of the manufactured goods shall be separate supplies made by the taxable person to the person who belongs in a country outside Singapore;

(e)

the prescribed tool shall be —

(i)	exported to any country outside Singapore; or
(ii)	destroyed,

when it is no longer needed for the manufacture of the goods; and

(f)

where the prescribed tool or prototype of such tool is subsequently disposed of in Singapore —

(i)	according to the instructions of the person who belongs in a country outside Singapore; or
(ii)	due to spoilage,

the taxable person shall maintain records in relation to the disposal.

(3) For the purpose of paragraph (2)(c), the manufactured goods shall be substantially exported if more than 50% of the manufactured goods produced by using the prescribed tool are exported.

(4) Where the taxable person making the supply under section 21A of the Act fails to comply with any condition prescribed under paragraph (2), he shall —

(a)	repay to the Comptroller without demand the amount of tax on the value of the supply to which the failure to comply relates; and
(b)	include the amount of tax referred to in sub-paragraph (a) as output tax in his return.”.

Amendment of regulation 108

15. Regulation 108 of the principal Regulations is amended —

(a)	by deleting “45A,” and substituting the words “45 (2A), (3A), (4A), (5) or (7), 45A (3A), (4A), (6A), (7), (8), (10) or (10B),”; and
(b)	by deleting the words “or 103I” and substituting the words “, 103I or 106 (2) or (4)”. [G.N. Nos. S 261/2002; S427/2002; S 648/2002; S 182/2003; S 316/2003; S 627/2003; S 237/2004; S 728/2004; S729/2004; S 646/2005; S 394/2006; S 673/2006]

Made this 28th day of June 2007.

TEO MING KIAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF(R) R60.1.0013 Vol. 30; AG/LEG/SL/117A/2002/2 Vol. 2]

(To be presented to Parliament under section 86(2) of the Goods and Services Tax Act).

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