Optimizing GST Reporting for More Savings
Discounted Sale Price Scheme
Unlock more savings with the GST Discounted Sale Price Scheme. Simplify GST reporting; we’ve got you covered!
What is the Discounted Sale Price Scheme?
The Discounted Sale Price Scheme is a straightforward way to calculate the Goods and Services Tax (GST) when you’re selling a used vehicle. With this scheme, you only need to apply GST to half of the selling price, making the process simpler for both buyers and sellers. Best of all, there’s no need to get prior approval from the Inland Revenue Authority of Singapore (IRAS) to use this scheme.
How Does It Work?
When you sell a second-hand vehicle, you’ll need to calculate the GST as follows:
- Excluding GST: If the sale price is $25,000, the GST would be calculated as $25,000 x 50% x 8% = $1,000.
- Including GST: If the sale price is $26,000, the GST would be calculated as $26,000 x 8/208 = $1,000.
For GST reporting, the value of the standard-rated supply would be $25,000, and the output tax due would be $1,000.
When Should You Use This Scheme?
At BluTrust Pte. Ltd., we recommend using the Discounted Sale Price Scheme in the following scenarios:
- If you purchased your second-hand vehicle from a GST-registered supplier who did not use the Gross Margin Scheme.
- If you don’t meet the conditions for claiming input tax.
Additional Information
If you’re selling a company vehicle and didn’t claim GST when purchasing it, you should still use the Discounted Sale Price Scheme. GST will be charged on 50% of the selling price of the used vehicle. Make sure to clearly indicate on your tax invoice how the GST is calculated (e.g., 8% GST @ Selling Price x 50%).
For more details on the Gross Margin Scheme, you can visit our Gross Margin Scheme webpage.