Ministry of Finance
Ministry of Finance
Consultation Period:
20 Jul 2020 - 07 Aug 2020


1. The Ministry of Finance is proposing 7 amendments to the GST Act to (i) introduce measures to enhance the Comptroller of GST’s powers to safeguard public monies, investigate tax offences and counter GST fraud; and (ii) improve GST administration and the clarity of existing legislation.  The Ministry is seeking public feedback on the draft GST (Amendment) Bill 2020 which provides for these amendments.

2. We invite you to comment on the proposed policy changes and the draft legislation which will give effect to these policy changes. Your views on the drafting will help us improve the clarity of the legislative amendments.


3. The draft GST (Amendment) Bill 2020 includes two proposed amendments relating to the introduction of measures to enhance the Comptroller of GST’s powers to safeguard public monies, investigate tax offences and counter GST fraud.

4. Proposed amendment 1 introduces measures to counter Missing Trader Fraud. Missing Trader Fraud is a fraud scheme used by syndicates, where the seller absconds with the GST charged on his sales (“Missing Trader”), while businesses along the supply chain continue to claim refund of GST incurred on their purchases1. Syndicates make the detection of the Missing Trader difficult, by interposing many businesses along the chain to deter the Inland Revenue Authority of Singapore (“IRAS”) from tracing back to the Missing Trader. It is critical that businesses undertake the necessary due diligence checks and follow-up actions to avoid being involved in such fraud. Missing Trader Fraud has been detected in Europe and IRAS has encountered such cases in Singapore.

5. To deter Missing Trader Fraud, legislative amendments are proposed to:

(i) Allow the Comptroller of GST to deny a GST-registered business’ input GST claim, if the business knew or should have known that his purchase was part of or connected with a fraudulent arrangement. The burden of proving that the business knew or should have known of the fraudulent arrangement lies on the Comptroller, with the standard of proof being the balance of probabilities. This measure is similar to the approach taken in the United Kingdom (“UK”) and the European Union to safeguard tax revenue;

(ii) Introduce a surcharge of 10% to be applied on the amount of input GST denied for a business who should have known that his purchase was part of or connected with a fraudulent arrangement. The UK has a similar practice;

(iii) Exempt the Comptroller from the requirement to refund input GST within 3 months after the receipt by the Comptroller of all the information requested by the Comptroller, if the underlying purchase is suspected to be part of or connected with Missing Trader Fraud. Australia and New Zealand have similar practices; and

(iv) Allow the Comptroller to impose conditions on a business who is required to register for GST and cancel registration if any of the conditions imposed is breached, and deregister or prevent a business from registering for GST. The UK similarly deregisters businesses who acted fraudulently or who knowingly facilitated a fraud.

6. Proposed amendment 2 enhances IRAS’s powers to seize goods for investigation of tax offences. The proposed amendment will allow IRAS to seize goods that are (i) suspected to be used or intended to be used by a person to commit an offence under the GST Act; and (ii) suspected to constitute evidence of an offence under the GST Act or which may aid in the investigation or prosecution of such offence. Empowering IRAS to seize goods that may be used to perpetrate fraud is an important measure in disrupting the operations of GST fraud schemes. The proposed enhancement of seizure powers will be exercised by specially authorised IRAS officers. The seizure of goods will also be supervised by the Court, who will decide whether the seized goods should be retained, disposed of, or returned to its owner after a certain prescribed time period. Tax authorities in the UK and Australia are similarly empowered to seize goods for their investigations. 

7. In addition, the draft Bill provides for five other proposed amendments that arose from periodic reviews of Singapore’s GST system, which seek to improve GST administration and the clarity of existing legislation. 

8. Proposed amendment 3 enhances the GST rules to counteract tax avoidance arrangements2 (“anti-avoidance rules”). The proposed amendment (i) enhances the anti-avoidance rules to include GST avoidance arrangements that would result in an earlier entitlement to input GST claims or unjustified bad debt relief3 claims;  (ii) provides certainty to taxpayers on their tax liability by clarifying that a tax adjustment under the anti-avoidance rules must be made by the Comptroller within 5 years; (iii) requires the additional GST from the adjustment to be paid within one month; and (iv) removes the discretion for the Comptroller to make adjustments to disregard or vary the arrangement4.

9. Proposed amendment 4 introduces a surcharge for tax avoidance arrangements. Currently, the tax adjustments made under the anti-avoidance rules only restore taxpayers to their initial tax position, as if the arrangement had not been entered into. To further deter tax avoidance arrangements, the proposed amendment introduces a surcharge equal to 50% of the amount of additional GST imposed by the Comptroller as a result of the adjustments made to counteract the tax avoidance arrangement. A similar amendment will be proposed for the draft Income Tax (Amendment) Bill 2020.

10. Proposed amendment 5 clarifies the treatment of claims relating to overpaid or erroneously paid GST. The GST Act currently allows a person to claim a refund of money that has been overpaid or erroneously paid as GST5. The proposed amendment clarifies that such claims (i) must be made to the Comptroller within 5 years; (ii) are also applicable to overpaid or erroneously paid GST on imports; and (iii) where the claims relate to GST overpaid or erroneously paid on imports, the claims must be made by and remitted to the person who had made the over or erroneous payment.

11. Proposed amendment 6 mandates that all refunds of GST by IRAS to taxpayers will be via electronic mode. This change is in line with the Government’s efforts to harness digital technologies to transform public service delivery. A similar amendment will be proposed for the draft Income Tax (Amendment) Bill 2020 to provide for mandatory electronic refunds of corporate income tax by IRAS to companies.

12. Proposed amendment 7 amends the secrecy provision to allow access to information necessary for IRAS to administer public schemes. The proposed amendment allows the Comptroller to provide information to the CEO of IRAS or officers authorised by the CEO of IRAS for the purpose of administering public schemes such as the Job Support Scheme. A similar amendment will be proposed for the draft Income Tax (Amendment) Bill 2020.

13. The Annex provides a brief description of the proposed tax changes and explains the proposed amendments to the GST Act and related subsidiary legislation.


14. We would appreciate your participation to ensure that the consultation is productive. Respondents are requested to observe these guidelines:

a. Please identify yourself and the organisation you represent (if any) so that we may follow up with you to clarify your comments if needed. 
b. Be clear and concise in your comments. 
c. Focus your comments on how the proposed legislative amendments can be better written to make them clearer and to make compliance easier.
d. Use the prescribed template provided to organise your feedback.
e. As far as possible, please explain your points with illustrations, examples, data or alternative formulations of the proposed amendments.

15. This draft legislation is released only for the purpose of consultation and should therefore not be used for individual or business decisions as it does not represent the final legislation. All comments received during the consultation will be reviewed thoroughly and if accepted, will be incorporated in the Bill for introduction in Parliament.


16. The draft GST (Amendment) Bill 2020 and the related draft subsidiary legislation are available for public consultation from 20 July to 7 August 2020. We regret that comments received after 7 August 2020 will not be considered.


17. We request that all interested parties submit your comments using the prescribed template, via email to


18. We will publish a summary of the main comments received on the Ministry of Finance’s website, together with our responses, in October 2020. The identity of respondents will not be disclosed in the summary.  


19. For reference, please download the following relevant documents for this public consultation:

Draft GST (Amendment) Bill 2020

Annex: Proposed GST Amendments

Prescribed Template for Submission of Comments

Other useful references:

You may obtain a copy of the GST Act at

1 GST-registered businesses claim GST incurred on their purchases (“input GST”), and charge GST on their sales (“output GST”). The net GST collected (where output GST charged is more than input GST claimed) is payable by businesses to the Inland Revenue Authority of Singapore (“IRAS”).

2 The GST Act allows the Comptroller to disregard or vary arrangements that are carried out with tax avoidance as one of their main purposes and not for bona fide commercial reasons; and to make relevant tax adjustments to counteract any tax avoidance under that arrangement.

3 GST-registered persons which previously paid output GST on their sales to IRAS may apply for bad debt relief to recover the output GST if they did not receive payment from their customers after 12 months.

4 Under the draft Bill, with the proposed amendment, once the Comptroller is satisfied that an arrangement is to avoid tax, the Comptroller will be required to make the adjustment.
5 Examples of such claims include GST incorrectly collected by non-GST registered businesses and GST wrongly charged on non-taxable transactions.