Forum: GST based on the value of training service provided

We refer to Mr Lim Ing Yew's letter, "Can GST be charged on subsidised course fees instead?" (July 6), regarding goods and services tax on subsidised course fees.

GST is charged based on the value of goods and services. This is consistent in the three examples mentioned by Mr Lim.

In the case of the training service providers, the value of the training service is the amount that they charge for it.

The government course fee support offsets the cost that the trainee has to pay to the training service provider, but does not change the value of the training service provided.

Hence, the training service provider in Mr Lim's example correctly charged GST of $50.40 on the training course of $720. The government course fee subsidy helps the trainee by shouldering $648 of the GST-inclusive price of $770.40.

Mr Lim said that his tax invoice from the Singapore General Hospital showed that GST was computed on $19.40. The $19.40 is the balance of the bill payable after direct government subsidies to public hospitals and polyclinics.

The GST was correctly computed based on the subsidised price of $19.40, but the Government also absorbs this GST amount for subsidised patients, so that no actual GST is paid for the subsidised treatments.

We thank Mr Lim for the opportunity to clarify the treatment of GST.

Kelly Wee

Director (Corporate Communications)

Inland Revenue Authority of Singapore