Thursday, 28 May 2015

[Straits Times] No inconsistency in GST computation

MR PANG Kim Phong's comments that goods and services tax (GST) computation is not consistent is not correct ("GST computation not consistent"; yesterday).
In his Singapore General Hospital (SGH) bill of $90.70, with a government subsidy of $63.49, the GST was computed based on $27.21 (net supply).
SGH's computation on GST is correct. SGH is state-owned, so the gross value supplied was $90.70 and the net value supplied was $27.21. Hence, GST was computed on the net value supplied of $27.21.
This is no different from a private enterprise which provides, for example, $100 gross value of services and gives the customer a $60 discount; the GST will be levied on the net value supplied, which is $40.
Mr Pang cannot compare the SGH bill with his bill from his private dentist ("Why no subsidy for GST?" last Saturday).
The government subsidy he received for his private dental treatment was not given by his dentist, so the gross and net value supplied by his private dentist was $88.50.
The waiver of GST at government hospitals and polyclinics forms part of the Government's overall subsidies for government-operated health services.
For the private healthcare sector, whether or not to waive the GST is up to the providers. If GST is waived, the private doctor, if he is GST-registered, must still pay the GST he did not collect from his patients, and the GST payments become part of the doctor's overall operating cost.
Christopher Leong Chi How