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GST update – Customer Accounting for
Prescribed Goods

Customer accounting for certain prescribed goods will be implemented from 1 January 2019 to deter fraud schemes where the seller absconds with the GST collected, but businesses further down the supply chain continue to claim the input tax. The prescribed goods are mobile phones, memory cards and off-the-shelf software, which are commonly used in these fraud schemes.

From 1 January 2019, customer accounting is required to be applied on a relevant supply of prescribed goods made to a GST-registered customer for his business purpose.  A relevant supply is:

  • a local sale of prescribed goods whose GST-exclusive sale value exceeds $10,000 in a single invoice
  • and is not an excepted supply.

Under customer accounting, the responsibility to account for output tax on the supply shifts from the supplier to the customer.


How does it work

  • Supplier sells prescribed goods exceeding S$10,000 (excluding GST) and does not charge GST to GST-registered customer
  • Customer will account for the output tax as though he is the seller
  • If the purchase is incurred for taxable activities, GST is fully claimable by customer
  • Effect: There is no money flow of GST from the customer to supplier.


Prescribed goods

Mobile phones

  • Examples include Smartphone and Blackberry
  • Exclusion applies – e.g. mobile phone purchased together with a mobile subscription and call services plan

Memory cards

  • Electronic flash memory data storage device used for storing digital information
  • Exclusion applies – thumb drive and external hard disk

Off-the-shelf software

  • Stored in a compact disc or similar storage medium, or accessed by the use of a product key or license key that is provided in a physical package
  • Exclusion applies – e.g. software downloadable from the Internet and accessed by a product key or license key not supplied to the customer in a boxed package


Excepted supply

An excepted supply is a supply of prescribed goods that is specifically excluded from customer accounting:

  1. A supply of goods made under the GST Gross Margin Scheme
  2. A supply of goods made under the Approved Third Party Logistics Company Scheme or Approved Refiner and Consolidator Scheme to an approved/specified person, and
  3. A deemed taxable supply of goods arising from the transfer or disposal of goods for no consideration


Illustrative Example

A GST-registered supplier sells mobile phones and memory cards for S$20,000 (excluding GST) to a GST-registered customer on 15 January 2019. As this is a relevant supply, supplier will not charge GST of S$1,400 (7% x 20,000) to the customer. Instead, the customer will account for output tax on behalf of the supplier.


Supplier – GST return

Standard-rated supplies S$20,000

Output tax S$0

Customer – GST return

Standard-rated supplies: S$20,000

Output tax: S$1,400


Taxable Purchases: S$20,000

Input tax: S$1,400



Affected GST-registered suppliers

If you are a supplier affected by customer accounting, you are still required to issue a tax invoice when you make a relevant supply to your customer. Your tax invoice must contain the following details in addition to what is normally required to be prominently shown:

  1. your customer’s GST registration number; and
  2. a statement: “Sale made under customer accounting. Customer to account for GST of $X.”, or “Customer accounting: Customer to pay GST of $X to IRAS.” where $X refers to the amount of output tax due on the relevant supply for which your customer will account on your behalf.

You should only collect the GST-exclusive price of the prescribed goods when you make a relevant supply. Therefore, your tax invoice should not show a total price payable that includes GST for the relevant supply.

If your GST reporting is supported by an accounting software/system, you are encouraged to engage your software vendor or developer early to understand if the software/system already caters for this new requirement or if tweaks are required.

Contact us today at for a no-obligation GST consultation! See GST Services for more information about our services.