When do I have to account for GST on gold jewellery sales?
I AM a new retailer of gold jewellery. When do I need to account for the goods and services tax (GST) on my sales?
If you have not received any payment since the gold jewellery was delivered, you have up to 90 days to issue a tax invoice and account for the GST.
On the other hand, if you received payment within 90 days, you have to account for the GST on the date of payment.
This treatment is applicable only to sales of gold jewellery.
What if the gold price is not fixed and payment is not received by the 90th day?
You are still required to issue a tax invoice and account for the GST based on the open market value on the 90th day.
When the price is subsequently fixed and payment is received, you should issue an additional tax invoice or credit note on the difference between the open market value and the fixed price.
This treatment applies only to sales of gold jewellery.
If a customer, for instance, buys gold jewellery from a retailer, the arrangement is as the example that follows:
Aug 1, 2007: Delivery of gold
Oct 30, 2007: The 90th day and the open market value of gold is $1,000
Jan 1, 2008: Price fixed at $1,200 and full payment received
As the price was not fixed by the 90th day, the retailer has to issue a tax invoice and account for a GST of $70 on the open market value of $1,000 on Oct 30, 2007.
On Jan 1, 2008, the retailer should issue another tax invoice to account for the additional GST of $14 on the difference of $200 between the fixed price of $1,200 and the open market value of $1,000.
When do I have to account for GST for the sale of other types of jewellery?
The GST for the sale of other types of jewellery is to be accounted for at the earliest of the following events:
Date when the goods are delivered or made available to your customer;
Date when the payment is received; or
Date of issuance of your tax invoice.
Where the date when the goods are delivered or made available to your customer is the first event and the tax invoice is issued within 14 days from the date of delivery of the goods, you may then account for GST based on the date of the tax invoice.
To learn more about GST treatment for common business scenarios that occur in the gold jewellery industry, an e-tax guide on 'GST And The Gold Jewellery Industry' is available on the Inland Revenue Authority of Singapore's website ( www.iras.gov.sg ).
For further details, please visit EnterpriseOne at www.business.gov.sg or e-mail enterpriseone@spring.gov.sg
Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to a1admin@sph.com.sg.
