How do businesses claim GST input tax on their purchases in Singapore?

GST-registered businesses in Singapore can claim back the GST (input tax) paid on business purchases and expenses, subject to certain conditions. This is one of the main benefits of GST registration.

Conditions for claiming input tax:

• You must be GST-registered at the time of the claim.
• The goods or services must be for business use (not personal).
• You must have a valid tax invoice or import permit as supporting documentation.
• The claim must be made within 5 years from the end of the prescribed accounting period in which the input tax was incurred.

How to claim:

• Report your input tax in Box 7 of your quarterly GST return (Form 5).
• Offset the input tax against output tax (GST collected from customers) in Box 6.
• If input tax exceeds output tax, IRAS will refund the difference to you.

Items where input tax CANNOT be claimed:

• Motor vehicle expenses: Purchase, rental, and maintenance of motor cars (including S-plated cars). This restriction does not apply to goods vehicles, buses, or cars used exclusively for business (e.g., taxis, driving school cars).
• Club subscription fees: Country club, sporting club, and recreation club fees.
• Medical and personal expenses: Employee medical expenses (unless contractually obligated), family benefits.
• Transactions not supported by a valid tax invoice.

Partial exemption: If your business makes both taxable and exempt supplies, you can only claim input tax attributable to taxable supplies. You must use the input tax apportionment method approved by IRAS.

Maintain proper records and tax invoices for at least 5 years, as IRAS may audit your claims.