Goods and Services Tax (GST) – Unauthorised Charging of GST and Price Display Requirements

We would like to bring your attention on the following matters:

Unauthorised Charging of GST

Only GST-registered businesses are allowed to charge GST on their sales. It is a serious offence for businesses that are not GST-registered to charge GST to their customers. Offenders face a penalty of 3 times the tax wrongfully charged and a fine of up to $10,000.

It has come to IRAS attention that some businesses have been wrongly advised that they can charge GST before their application for GST is approved and IRAS would backdate their GST registration to the date when GST was first charged on their sales. This is a misconception. IRAS would only backdate the registration of businesses that are required under the law to be GST-registered (i.e. compulsory registrants) earlier. The backdating of GST registration does not ratify the wrongful act of charging GST before a business is registered for GST. The business would still have committed an offence for charging GST for the backdated period prior to IRAS’ backdating of its registration.

Price Display

GST-registered businesses must show GST-inclusive prices on all price displays (e.g. price tags, price lists, advertisements, publicity brochures and website). Prices that are quoted, whether written or verbal must also be GST-inclusive.

With effect from 1 April 2015, the GST law requires businesses that display or quote both the GST-inclusive and GST-exclusive prices to show the GST-inclusive price at least as prominently as the GST-exclusive price. Failure to comply with each of these price display requirements is an offence that can result in a fine of up to $5,000.