E-commerce platforms begin charging 9% GST well before the year is out

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SINGAPORE: Some logistics companies have already begun charging customers who purchase items from overseas the new 9 per cent Goods and Services Tax (GST) even before the year ends, on the basis that goods will only arrive after 1 January.

The GST is going up from 8 per cent to 9 per cent in the new year. According to the Inland Revenue Authority of Singapore (IRAS), consumers who purchase goods worth less than S$400 and import them into Singapore must pay sales tax directly to the seller while those who purchase goods above S$400 must pay tax directly to the customs department after the goods arrive in Singapore.

To facilitate the import of goods, overseas sellers may charge consumers an import tax of 9 per cent in advance and pay it on behalf of the buyer to Singapore Customs.

Ahead of the impending GST hike, some logistics companies began charging the higher tax on different dates in December based on their respective shipping or air logistics speeds.

Popular e-commerce platforms Taobao and ezBuy, for example, began charging customers who purchase goods from abroad over $400 the new 9 per cent GST rate from 20 December itself. The 1 per cent GST increase will go into effect for those who purchase goods under $400 on 1 January, at midnight.

Logistics company EzShip began charging the higher GST earlier, on 11 December.

Meanwhile, some customers have been making large purchases online this month, to avoid the higher GST that’s incoming. One online shopper, who will receive her built-to-order (BTO) flat keys in mid-2024, told Lianhe Zaobao that she has already begun purchasing home appliances and accessories worth about $5,000 ahead of 2024, to avoid paying more tax.

She took advantage of the 11.11 and 12.12 promotions on online shopping platforms and purchased lamps, smart bulbs, small kitchen appliances, silverware, hair dryers, shelving units, as well as bathroom supplies such as bidets and showerheads, to save about $300-$400 in tax.

Another online shopper told the Chinese daily that she purchased dining tables and chairs, microwave ovens, rice cookers, refrigerators, clothes drying racks, storage boxes, laundry detergent, and snacks, totalling almost $4,000, to avoid the GST hike.

She said, “The prices in Singapore are getting higher and higher, and logistics and delivery are also very slow. You have to pay for transportation when you go out to buy. So for daily necessities, almost everything in our family is bought from Taobao, which is cheap and good, including shipping costs. And the GST is also cheaper than buying locally.”

The post E-commerce platforms begin charging 9% GST well before the year is out appeared first on The Independent Singapore News – Latest Breaking News

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