Customer accounting transfers the output-tax responsibility
IRAS’s actual Tenth Edition, dated 30 January 2026, covers 34 pages, fifteen sections and three annexes. Customer accounting began on 1 January 2019 to address fraud in which a seller collects GST and disappears while purchasers claim input credit. It applies to qualifying local sales of prescribed mobile phones, memory cards and off-the-shelf software. It is not zero-rating: the supplier still makes a standard-rated supply, but the registered business customer accounts for the output tax on the supplier’s behalf.
The ordinary threshold is a GST-exclusive value above S$10,000. Once exceeded, customer accounting covers the full relevant value, including the first S$10,000. An exactly S$10,000 supply normally remains under supplier accounting. The customer must be GST-registered and buying for business use, and the supply cannot be zero-rated or an excepted supply. An eligible jointly notified option can remove the threshold for a particular ongoing customer relationship.
Which phones qualify, including folding screens
A prescribed phone transmits and receives spoken messages over a cellular network and has a diagonal screen no larger than 17.5 centimetres, excluding the bezel. Some small voice-capable tablets qualify. For folding or multiple displays, use the largest unfolded screen: above 17.5 centimetres is excluded. Walkie-talkies without mobile-phone function, satellite phones, smartwatches and untethered landline handsets are not prescribed phones.
Accessories supplied in the phone’s retail box form part of the phone supply; separately sold covers, batteries, chargers and protectors do not. A phone bought together with a qualifying mobile subscription, including renewal or extension, is excluded where the licensed provider’s plan is not prepaid and the phone and plan are supplied by the same or Companies Act-related corporations. A prepaid bundle does not meet that exclusion merely because it includes a subscription.
Memory cards and physically supplied software
Prescribed memory cards are electronic flash-memory storage such as CompactFlash, SD and Memory Stick. Integrated USB flash drives, portable disks, SSDs, DIMMs, RAM, HDDs and embedded-chip bank or SIM cards are excluded. The category is narrower than all computer storage.
Prescribed off-the-shelf software is not customised for the customer and is supplied on disc or similar media, or accessed with a key/code provided in physical packaging, including the stated POSA format. Examples include boxed antivirus or accounting packages, disc games, Nintendo Switch game cards and downloads activated by a physically supplied key. Preloaded software sold with equipment, backup copies, keys supplied by email, Xbox Live, PlayStation Plus, POSA printing and the listed game chips are excluded. A digitally delivered licence is not automatically a prescribed physical good.
Excepted supplies, imports and exports
Excepted supplies include eligible Gross Margin Scheme sales, the stated Approved 3PL or Approved Refiner and Consolidator Scheme supplies to specified/approved persons, and deemed supplies on giving or disposing of goods for no consideration. They continue under their own existing treatment. A GST-group internal transaction or qualifying transfer of a going concern is disregarded or excluded rather than customer-accounted.
Nonregistered customers and disclosed nonbusiness purchases remain supplier-accounted. Qualifying exports remain zero-rated. An export failing its zero-rating conditions is standard-rated and can require customer accounting if all relevant conditions are met. The local-purchase flow does not replace import GST rules merely because the imported article is a phone or memory card. Annex A and B test local prescribed supply, the threshold or option, exceptions and registered business use in that sequence.
The supplier’s invoice and GST return
Verify the customer’s GST registration using IRAS’s business search. Issue a customer-accounting tax invoice containing ordinary details, the customer’s GST number and a prominent statement that the customer accounts for the specified GST amount. Collect only the GST-exclusive relevant-goods price; do not add that customer-accounted tax to the amount payable to the supplier. A foreign-currency invoice must express the relevant net value and customer-accounted GST in Singapore dollars. The customer uses the supplier’s exchange rate.
Report the relevant net value in supplier Box 1 and no corresponding tax in Box 6. The normal trigger is the earlier invoice or payment; a section 33(2) agent also considers delivery and uses the special time-of-supply rules. Separate invoices for customer-accounted and other supplies can prevent confusion. The sample combined invoice discounts cameras from S$1,500 to S$1,350 and phones from S$12,000 to S$10,800: the supplier collects S$121.50 GST only on cameras, for S$12,271.50 total payable, while the customer accounts separately for S$972 on phones.
The purchaser must account even when input credit offsets the tax
Provide the supplier your GST number and disclose nonbusiness use at purchase, potentially in writing. For a relevant business purchase, report net value in Box 1, output tax in Box 6, purchase value in Box 5 and eligible input tax in Box 7. A fully taxable buyer of S$10,500 memory cards therefore reports S$10,500 in Boxes 1 and 5 and S$945 in Boxes 6 and 7; the supplier reports S$10,500 Box 1 and nil Box 6.
Input recovery is conditional, including possession of a valid customer-accounting invoice. The corresponding output obligation remains even if input tax is unclaimable or voluntarily not claimed. Partially exempt or mixed-use businesses apportion recovery. When determining their recovery ratio or de minimis position, exclude the received relevant supply from taxable and total supplies because it is not their own output transaction. The same exclusion applies to buyer registration turnover and the relevant MES ratio, although the seller’s sale still counts towards its taxable turnover.
Late invoices and the narrow approved reporting exemption
Output and input normally appear in the original supply-period return. A late invoice permits both in a subsequent period ending no later than three months after the original period end. The guide’s 29 March 2024 invoice received on 19 April can be reported in the quarter ending 30 June instead of 31 March.
Even occasional purchases for internal business use are covered. A customer seeking exemption from both output/input and supply/purchase return entries requires prior Comptroller approval, full-taxable status, all prescribed purchases for non-resale/non-trading use, and qualifying robust controls, compliance and records. The guide says that control condition is currently met only by ACAP status and expressly gives the stated condition legal force. ACAP alone is not automatic approval. This is an exemption from the listed reporting duties, not a general exclusion of the goods or supplier invoicing rules.
Thresholds, discounts and legitimate part payments
An upfront discount shown on the same invoice reduces the value for the S$10,000 test. A contingent future volume discount does not. From 1 April 2020, prompt-payment discounts also use the pre-discount price because fulfilment is contingent; the guide’s earlier discounted-price rule is historical.
Test the value when invoice or payment triggers the supply. Example 3’s S$20,000 software order has an S$8,000 deposit plus S$720 GST received on 25 March 2024 under ordinary accounting, followed by a S$12,000 invoice on 30 April under customer accounting with S$1,080 customer tax, even though payment is in July. Example 4’s S$30,000 order has an exactly S$10,000 March invoice and S$900 supplier tax, then a June S$20,000 customer-accounted balance with S$1,800 tax despite July delivery/payment. Deliberate fragmentation to avoid customer accounting can be disregarded under anti-avoidance powers.
The option for frequent customers below the threshold
A supplier and registered business customer can consistently customer-account all prescribed supplies regardless of value if the preceding calendar year included at least one above-S$10,000 supply, and the buyer made at least six purchases in that year or averaged six annually over the preceding three calendar years. Assess the stated annual conditions each year. Only making small supplies does not establish eligibility.
Both parties retain a written agreement and jointly submit a signed undertaking. Annex C requests names and GST/UEN numbers, confirmations of registration, prior qualifying sale, written all-value agreement and purchase frequency, plus authorised names/signatures, designations and contact details. Submit through myTax Portal or the specified GST email, not paper. After confirming all conditions and submitting the undertaking, no further approval is needed. If frequency no longer qualifies, revert to ordinary threshold treatment; if the customer deregisters, no customer accounting. A voluntary exit while eligible requires joint written notice of intention and effective date. The annual qualifying-sale condition must also continue to be assessed.
Mixed invoices and proportional allocation
Combine all prescribed types on an invoice for the threshold but exclude non-prescribed goods. Only the qualifying prescribed portion is customer-accounted. In Example 5, S$10,000 phones plus S$1,500 cards qualify at S$11,500; S$20,000 laptops plus S$1,500 USB drives remain supplier-accounted at S$21,500. Supplier Box 1 is S$33,000 and Box 6 S$1,935. A fully taxable customer reports Box 1 S$11,500, Box 6 S$1,035, Box 5 S$33,000 and Box 7 S$2,970.
For a single bundle price, a reasonable method is relative open-market values. Phones worth S$12,000 and cameras S$8,000 sold for S$18,000 allocate S$10,800 to phones and S$7,200 to cameras. The first amount crosses the customer-accounting threshold; the second attracts ordinary supplier GST. The whole bundle does not acquire one treatment merely because it is one invoice line.
Free promotional goods and trade-ins
For genuine commercial free goods, nil value is acceptable if the remaining goods’ combined market value equals or exceeds the charged price. A S$1,000 camera bundled with an S$80 free card can allocate the full price to the camera where the stated retail promotion conditions hold. Conversely, phones bundled with free covers can allocate the full qualifying price to phones. Artificial free-goods labelling can be disregarded and market value imposed.
Trade-in is two separate supplies. Use the new goods’ gross price without subtracting the old goods’ credit. Old phones credited at S$7,000 against new phones priced S$11,000 do not produce a S$4,000 threshold test; the new S$11,000 supply qualifies. Separately determine the old-goods supply’s own treatment.
Credit notes where the price remains above S$10,000
Genuine returns, reduced quality or later discounts can generate credit notes; a rebate for a separate customer service is not simply a sale discount. If the revised price remains above S$10,000, issue a customer-accounting credit note identifying the negative customer output adjustment. The customer reduces both output and eligible input by the GST on the credit.
Example 6’s S$40,000 phones initially produce S$3,600 customer output/input. A S$1,000 faulty return reduces supplier Box 1 by S$1,000 with no supplier Box 6 change; customer Boxes 1/5 decrease S$1,000 and Boxes 6/7 decrease S$90. The retained S$39,000 remains under customer accounting. Do not change only the purchase or input side and omit the customer output reversal.
Credit notes crossing the threshold and the no-adjustment choice
If a credit reduces the price to S$10,000 or below, either cancel the original customer-accounted sale and issue an ordinary invoice for the revised amount, or issue a credit note specifying both the full customer output reversal and supplier output tax now due. Customer input changes by negative old customer-accounted tax plus new supplier tax.
Example 7 reduces S$10,500 to S$9,500: supplier Box 1 net falls S$1,000 and Box 6 increases S$855; customer Box 1 falls S$10,500, Box 6 falls S$945, Box 5 net falls S$1,000 and Box 7 falls S$90. A different permitted choice makes no GST adjustments only with a retained written agreement, a fully taxable customer and a credit note marked as not for GST purposes. Under that choice neither party adjusts the supply/purchase value or related tax entries. It is not available merely because a credit is small.
Additional consideration is tested separately
An additional invoice or earlier received additional payment is tested on that added amount: up to S$10,000 uses ordinary supplier GST; above it uses customer accounting. It is not automatically customer-accounted because the original order was larger.
Example 8 begins with S$50,000 phones and S$4,500 customer tax in the March 2024 quarter. A higher-priced replacement adds S$4,000; payment on 15 June triggers S$360 supplier GST in the June quarter even though invoice and delivery occur on 10 July. The buyer reports the added S$4,000 in Box 5 and S$360 in Box 7, with no added Boxes 1/6 under customer accounting. The example separates the replacement price difference from the original S$8,000 faulty goods being exchanged.
Correcting supplier and customer errors
A supplier wrongly collecting GST on a relevant supply must account for that charged tax until it cancels the ordinary invoice, refunds the tax and issues the correct customer-accounting invoice. The registered buyer still bears the correct output duty and must correct any omission and recover the wrongly paid supplier tax. Paying the supplier does not discharge the buyer’s IRAS obligation.
Wrong customer accounting for non-prescribed goods or a nonregistered buyer requires the seller to correct omitted ordinary output tax. If a registered buyer failed to disclose nonbusiness use, the guide instead requires that buyer to account for output with no input credit, and does not require the seller to account again because of the buyer’s failure. A buyer claiming input but omitting matching output must correct immediately. Relevant inaccuracies can attract penalties. The first implementation year’s genuine-error penalty concession is historical, not continuing; later timely complete voluntary disclosures are considered under the separate VDP.
Other schemes and later private use
Approved 3PL and ARCS qualifying supplies, and eligible GMS sales, retain their exceptions. From 1 July 2025 eligible businesses starting GMS no longer require the former approval, but sales not qualifying for GMS remain subject to customer accounting if the conditions hold. Cash Accounting Scheme businesses are not excluded: the CAS customer accounts for output and claims input in the period of payment instead of ordinary invoice timing.
The MES qualification described in the guide uses zero-rated supplies above 50% of total or above S$10 million in the preceding twelve months, excluding received customer-accounted supplies from the denominator. A subsequent change to private use does not require notifying the original supplier, but can cause a deemed goods or services supply. Choosing not to claim input does not remove original customer output liability; the FAQ explains the separate consequence for later free gifts. Apply the appropriate deemed-supply rules rather than rewriting the original invoice whenever use changes.
The historical implementation example and recordkeeping
For the January 2019 transition, pre-change invoice or consideration stays under ordinary GST to that extent despite later delivery. Example 2’s S$30,000 sale has a 26 December 2018 S$11,000 deposit invoice plus historical 7% GST S$770 in the December return; the February 2019 S$19,000 balance uses customer accounting with S$1,330 tax in the March return. Ordinary delivery is disregarded for this test, but section 33(2) agents have the specific delivery exception.
Keep registration and business-use checks, product specifications, invoices, exchange rates, discount terms, credit adjustments and any joint-option undertaking with annual eligibility evidence. The three annexes supply seller and buyer decision paths and the undertaking specimen; the guide also gives contacts and edition history. Use the original undertaking form and retain the supporting records when applying these reporting conditions.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗