Following our recent announcement on the hike in SST rate from 6% to 8%, effective from 1st March 2024 onwards, some of you may be unsure as to which SST rate applies to certain transactions.
Please refer to the seven (7) scenarios below and the SST rate that is applicable to each, for more information.
Scenario 1: In the case where the entire taxable service is provided before 1/3/2024, and the entire payment is received before 1/3/2024.
Before 1/3/2024
On/ after 1/3/2024
SST RateApplied
Service provided
Total invoice issued
Total payment received
Service provided
Total invoice issued
Total payment received
10,000
10,000
10,000
NA
NA
NA
6%
Scenario 2: In the case where the entire taxable service is provided before 1/3/2024, and the entire payment is received on or after 1/3/2024.
Before 1/3/2024
On/after 1/3/2024
SST RateApplied
Service provided
Total invoice issued
Total payment received
Service provided
Total invoice issued
Total payment received
10,000
10,000
NA
NA
NA
10,000
6%
Scenario 3: In the case where the entire taxable service is provided before 1/3/2024: a. A portion of the payment is received before 1/3/2024. b. A portion of the payment is received on or after 1/3/2024.
Before 1/3/2024
On/after 1/3/2024
SST RateApplied
Service provided
Total invoice issued
Total payment received
Service provided
Total invoice issued
Total payment received
10,000
6,000
6,000
NA
4,000
4,000
6%
Scenario 4: In the case where the entire taxable service is fully provided on or after 1/3/2024, and the entire payment is received before 1/3/2024.
Before 1/3/2024
On/after 1/3/2024
SST RateApplied
Service provided
Total invoice issued
Total payment received
Service provided
Total invoice issued
Total payment received
NA
10,000
10,000
10,000
NA
NA
6%
Scenario 5: In the case where the entire taxable service is fully providedon or after 1/3/2024, and the entire payment is receivedon or after 1/3/2024.
Before 1/3/2024
On/after 1/3/2024
SST RateApplied
Service provided
Total invoice issued
Total payment received
Service provided
Total invoice issued
Total payment received
NA
10,000
NA
10,000
NA
10,000
8%
Scenario 6: In the case where the entire taxable service is fully provided on or after 1/3/2024: a. A portion of the payment is received before 1/3/2024. b. A portion of the payment is received on or after 1/3/2024.
Before 1/3/2024
On/after 1/3/2024
SST RateApplied
Service provided
Total invoice issued
Total payment received
Service provided
Total invoice issued
Total payment received
NA
10,000
4,000 (6%)
10,000
NA
6,000 (8%)
Apportionment
Scenario 7: In the case where taxable services are provided before 1/3/2024, and extend beyond 1/3/2024, SST is applied on an apportionment basis as follows: a. For taxable services provided before 1/3/2024, SST is applied at a rate of 6%; and b. For taxable services provided on or after 1/3/2024, service tax is applied at a rate of 8%.
However, any payment received before 1/3/2024, for services provided on or after 1/3/2024, is subject to a service tax at a rate of 6% on the value of the payment received before 1/3/2024.
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