Goods and Services Tax - for Motor Vehicles

For all dutiable motor vehicles:

• If the original importer is the party declaring the payment permit, GST at the prevailing rate will be levied on the sum of the vehicle’s customs value and duties payable.

  • GST payable = prevailing GST rate x (customs value + duties payable)

• In situations of multiple sales where the eventual buyer is the party declaring the payment permit, GST at the prevailing rate will be levied on the sum of the last selling price (transaction value from the sale between the eventual buyer and his supplier) and duties payable. The last selling price (LSP) can be entered in the LSP field during permit declaration.

  • GST payable = prevailing GST rate x (last selling price + duties payable)

Example:

Company A bought a car from Supplier B at S$100,000 on CIF (Cost, Insurance and Freight) incoterms. The car was shipped to Singapore and stored in Company A’s licensed warehouse. Company A then sold the car to Company C for S$200,000. What is the value of the car for duty and GST purposes?

Duty

Value of car = S$100,000
Duties payable = S$100,000 x 20% = S$20,000

GST

If Company A declares the payment permit:
Value of car = S$100,000
GST payable = prevailing GST rate x S$(100,000 + 20,000)

If Company C declares the payment permit:
Value of car = S$200,000 (to be declared in the LSP field in the permit declaration)
GST payable = prevailing GST rate x S$(200,000 + 20,000)

^{Note: If Company A is a taxable company, it would also have to collect GST for the sale of the vehicle at S$200,000 to Company C and account the extra GST with the Inland Revenue Authority of Singapore (IRAS) in its accounting cycle. The total amount of GST collected by IRAS remains the same as the scenario where Company C pays GST on S$220,000. However, if Company A is a non-taxable company, it would have to absorb the import GST paid because it cannot collect GST for the sale to Company C.}