31 Dec 2020

    Your GST FAQs for eCommerce Businesses Answered!

    Your GST FAQs for eCommerce Businesses Answered

    Article by Fion Lee
    Graphics Design by Johanz Mark Isip

    The new year ushers in great sales for E-commerce businesses. The industry is truly unstoppable with sales expecting to cross $4 trillion this year! As such, we wrote this article answering your GST FAQs about eCommerce businesses.

    What do you need to know about GST for your products and services as a retailer? And how can you protect your business

    Here are your FAQs about GST for eCommerce businesses answered

    What items or services are GST chargeable for my eCommerce website?

    IRAS states that GST should be charged for these transactions below:

    • Physical goods supplied over the internet
    • Services and digital services supplied over the internet
    • Common eCommerce items such as software and virtual items in online games
    • Web hosting services

    Generally, the same rules apply for both online and offline transactions. If you sell goods and services online and deliver locally, you should standard-rate your supply and charge GST. 

    Do the same rules apply if my buyer is based overseas but my business is based in Singapore?

    GST rules do not apply to sellers who export their goods out of Singapore. However, sellers need to have custody of their goods. They also need to have control over the export arrangement. Then, they can zero-rate their supplies. 

    For a complete list of different export scenarios, click here.

    What are considered ''digital services' that my business has to charge GST for?

    IRAS defines digital services as “services supplied over the internet or an electronic network”.  

    To illustrate, here are some examples:

    • Downloadable mobile applications 
    • E-books, news, and magazines
    • Online streaming (TV shows, movies and music)
    • Online gaming 
    • Software programs
    • Website filters and firewalls
    • Website hosting
    • File-sharing and cloud storage services

    Similar to physical goods, services over the internet are GST chargeable. However, you may zero-rate your supply if they qualify as international services.

    Questions about GST tracking

     Does my business need to be registered for GST? How will I know?

    Your business must register for GST if your turnover exceeds S$1 million at the end of the year. In fact, IRAS provides a handy calculator to access your eligibility here.

    How do I track GST collected from my eCommerce sales?

    You can easily track the tax amount earned with Magento 2’s interface. Simply look under the ‘Reports’ section of your website. From there, you can toggle between dates to view the tax amount earned within given time periods.

    Magento 2’s tax report - Verz Design

    An example of Magento 2’s tax report 

    Of course! However, we need to know the tax rate of the country your business sells to. After which, our developers can configure GST in two ways. Firstly, they can include the tax amount together with product pricing. Secondly, they can break down the tax amount in the ‘cart’ page.

    Tax pricing on the checkout page – tax exclusive

    An example of tax pricing on the checkout page – tax exclusive

    Tax pricing on the checkout page – tax inclusive

    An example of tax pricing on the checkout page – tax inclusive

    Speak to our developers to see what we can do for you!

    Enjoy up to 80% eCommerce website grant with our Productivity Solutions Grant (PSG). Click here to get the most popular eCommerce platform for your website today. 

    Call us at 6841 1680 or drop an email to [email protected] for a free consultation today!

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