We thank Mr Chiok Beng Piow for the opportunity to clarify goods and services tax treatment ("Query on taxes on discounted meal"; Tuesday).
He had purchased a Groupon deal for lunch at a restaurant, and asked if goods and services tax (GST) should be charged on the original price of the lunch of $71, or the discounted price of $38.80.
For discount vouchers that specify the goods or services to be redeemed, GST is charged at the discounted price, since this represents the actual value of the goods or services sold. Hence, in Mr Chiok's case, the GST should have been charged on the discounted price.
The Inland Revenue Authority of Singapore has contacted the restaurant to clarify the correct GST treatment. Mr Chiok can also check with the restaurant on how he can seek a refund for the excess GST paid.
GST-registered merchants and consumers can refer to the e-Tax Guide "GST Treatment of Vouchers" available at www.iras.gov.sg for our guidelines on the GST treatment on the sale and redemption of vouchers.
Kelly Wee (Ms)
Director (Corporate Communications Inland Revenue Authority of Singapore
This article was first published on October 18, 2014.
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