Regardless of whether or not you meet the threshold limit, every firm is qualified to register for the Goods and Services Tax voluntarily. Even if you are exempt from the requirements of the company GST registration Singapore, you have the option of registering voluntarily under that tax. You will be considered the same as any other average taxable person for GST purposes, which means that all of the provisions of GST that apply to registered taxable persons will also apply to you.
The Goods and Services Tax, or GST, levied in Singapore is strikingly comparable to the Value Added Tax, or VAT, collected in most countries. Your company might be excluded from having to register for GST if it meets the requirements of a specified set of criteria.
Even though registering for GST could cause you to incur more business and compliance costs, it may be in your company’s best interest to register for GST voluntarily. This could be helpful to your company. As soon as you get Singapore Company GST registration, the government will appoint you as a GST collecting agent. This indicates that there are tasks that you are expected to carry out. It’s possible that complying with these obligations will drive up your administrative expenses.
In this essay, we will go over some of the most important reasons why you ought to register for GST.
Registering Early can Save Time:
If you register your business early, you’ll be able to start collecting GST from your consumers before the government requires you to. It also implies that you won’t have to keep track of your turnover to determine whether or not you’ve reached the required level. Most significantly, even though you missed the registration deadline, you won’t have to pay any GST out of your cash.
Good Image of your Business:
When you voluntarily register for GST, it gives the impression that your firm is as well-established as the big names in the industry and shows customers that you take business seriously. As soon as clients and suppliers learn that your company is GST-registered, they instantly assume that it is large and generates significant revenue. Your company’s success doesn’t diminish this psychological impact on potential customers.
Competitive Advantage:
Larger companies and multinational corporations have a preference for collaborating with GST-registered sellers. Gaining a competitive edge can be accomplished by collaborating with businesses subject to the GST.
Take Input credit:
To claim an Input Tax Credit, a supplier must be registered with the GST and the business that purchased the raw materials. As a result, several businesses must be reported to operate legally. Volunteers can take credit for buying and inputting services such as legal fees, consultation fees, and other costs into the system. This will eventually enhance their profit margins and their bottom line.
When your Customers are Primarily GST-Registered:
It’s possible to raise your rates to include GST if the majority of your clients are GST-registered, as they will be able to claim the GST they incurred.
GST, which was collected from your consumers, now has to be paid by you. However, if most of your clients are non-GST-registered end consumers, they will be unable to collect the GST they have paid. Thus, your profit margins may take a hit as a result.
The government’s 7 percent GST will reduce your profit margin if each business sells an item priced at $100 in the marketplace. If you want to charge $107 for your item, your prices might not be as competitive as those of your competitors who charge $100 for the same thing.
If you Make Sales to Overseas Customers:
If you have been exporting products and services to customers outside the country, you are exempt from the requirement that you charge them GST. This is because the GST tax on exported goods and services is considered equal to zero.
Because of this, you can claim the value-added tax (GST) you paid on the supplies you purchased from vendors registered to collect GST.
Take, for instance, the scenario where you purchased wood for $1,000 from a GST-registered seller in Singapore and were charged an additional $70 by the supplier for GST. You are exempt from charging the Goods and Services Tax (GST) to a customer located outside of Australia since you constructed a table out of wood and sold it to them. On the other hand, when you file your GST return, you can claim the $70 of GST that you first paid as input tax.
Maintains Price Stability:
A business can avoid a price rise for its clients by anticipating GST registration and planning accordingly. In addition, registering for GST allows you to claim any GST you paid on your purchases.
Voluntary GST registration can assist new businesses to get back whatever GST they paid out in the beginning, even if they make less than the threshold. At first, you might find yourself spending more money than you make, and you’ll be shocked at how quickly it piles up. As a result, your cash flow will be replenished.
When you should not Voluntarily Register for GST:
If you want to take advantage of the following, you should avoid registering for GST because you won’t be able to claim the benefits and will end up paying more in the long run.
Sales to End Users:
Your clients cannot receive a credit for the Goods and Services Tax (GST) they paid on the purchase if they are not registered for GST. As a result, it would be advantageous to refrain from collecting GST from them. In that situation, you are not required to apply for registration.
Purchases from Non-Registered Suppliers:
You don’t have to pay sales tax on purchases if you buy them from unregistered merchants from whom you acquire goods and services. As a result, you cannot claim an input tax credit and cannot register your business.
Hard to fulfill GST Compliances:
Once you have been registered for GST, it is a requirement that you adhere to the guidelines outlined in the GST Act. It is best to avoid registering to comply with various complicated regulations, such as completing returns, paying taxes, maintaining accounts, etc.
