The IRAS has finally updated the GST error threshold from $1,500 to S$3,000 with effect from 1 January 2024.
What this means is that if you make error with GST implications of less than $3,000 and the total non-GST amounts in error is not more than 5% , you can choose to adjust the errors in your next GST F5 filing.
Please refer to the IRAS website for more details:
https://www.iras.gov.sg/taxes/goods-services-tax-(gst)/filing-gst/correcting-errors-made-in-gst-return-(filing-gst-f7)
The filing of GST F7 is not only for a situation of over-claiming of input tax (e.g. claiming of input GST on disallowed expenses).
If you issue a credit note to correct a mistake due to wrong GST treatment applied in the past (e.g. applying 0% GST on local delivery or charging 9% GST on goods that are exported), you would still be required to file the GST F7 if the GST amount is more than $3,000.
In other words, you could be issuing a current dated credit note to correct a GST mistake in the last quarter but you cannot report the credit note in your current GST return if the GST error is more than $3,000.
The key question is “Are you currently monitoring the credit notes that were issued to determine
whether the credit notes were genuinely issued to give a credit to your customer (e.g. goods returned or discount given for a past transaction) or the credit notes were issued to correct a GST mistake?
Talk to us to see how we can help.
