Zero Rated Supplies

Zero-rated supply (either products or services) has a 0% GST rate, which means that buyers do not have to pay any GST on them.

Zero-rated supplies are still eligible for input tax credits, and enterprises can claim input tax when purchasing them. This enables them to deduct input tax from the amount of GST they must remit.

Which Are the Zero-Rated Supplies?

Zero-rated supplies are used to make a different end product and are a significant part of the supply chain. To avoid overburdening enterprises with taxes, they’re zero-rated.

Furthermore, in some nations, some commodities considered vital (such as food, medicine, water, and so on) are zero-rated, making them more accessible.

Many governments use zero-rate exports to encourage the export of goods and services to other countries and make them more appealing to an international clientele.

When Should You Be Charge a GST of 0% (Zero-Rate) in Singapore?

International Services Providing

If your services fall within the criteria of Section 21(3) of the GST Act, they are considered foreign services and are zero-rated (i.e., no GST is payable). 

You may be required to determine your customer’s belonging status (i.e., whether the customer is a local or an overseas company) before your supply of services can be zero-rated, depending on the nature of your services.

Goods Exportation

When you are confident that at the point of supply (depending on the time of supply for exports), you can charge GST at 0%, if:

• The items provided will be or have already been exported; and
• You have all of the necessary paperwork to support a zero-rating request.

Please assess the Guide on Exports (Seventh Edition) for scenarios that the export arrangement falls under to ascertain the relevant list of documents suppliers must retain to substantiate any zero-rating of the supply.