Originally posted by ndsef:
I am bringing this up because of a little incident that
happened tonight.
I am a real estate agent for those who do not know. Recently, I
managed to help a big developer in Singapore sell off one of its
industrial property. I remembered clearly that my client was
charged a 5% GST for the sale.
My agency is GST registered as well. So when it comes to the
invoicing for my fair share of commission, which was by the way,
reduced from the market rate, my agency added in the 5% GST
too.
So after one month of waiting, tonight, I got a call from the sales
rep of that big developer. He told me that his accounts has
informed him that my invoice amount it wrong. It should be $XXXX.XX
nett without GST. He further added that their company has never pay
commission with GST.
This means that I would have to absorb the GST amount which is
about $300 plus!
[b]The question then is, "Can't this developer who is GST
registered as well "claim back" this GST amount?"
I reminded that sales rep that GST is levied by IRAS (Garmen) on
all Goods and Services rendered by GST registered companies! I nor
the agency will be putting the GST amount in our own pockets!
To get a clearer picture, lets say the amt is $1000 without GST.
Our agency invoice will then reflect $1050 with GST. What this
developer want is our agency invoicing at $1000 WITH GST, meaning
the actual commission is only $952.38. So the developer actually
gets a "rebate" of $47.62 from IRAS.
This amount in the example may seem small, but imagine the amount
for one month's worth of transactions can easily add up to hundreds
of thousands!!! and the rebate amount could easily be tens of
thousands!!!!
Is this not a form of commercial crime or cheating the
garmen?
Can any accountants care to comment?[/b]
I typed a lot but was erased because I have to log in again.
Tired to type liao. My advice is to ask your agency accontants for
help.
Basically, you lugi $47.62 if you charge the developer $1000
inclusive of GST. The gov didn't loose any money because you are
part of the middleman chain in the GST collection process.
