Common Fallacy About GST
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Most people have this misconception that so long as this business doesn't charge GST, they won't be paying GST for their purchases.
This thought is WRONG.
A GST registered business is able to charge GST (Output Tax) for their Sales and get refund GST (Input Tax) for what they paid for.
A Non-GST registered business is NOT able to charge GST and NOT able to get refund GST.
Example 1:
In this example all are GST registered business except the Consumer.
[M]anufacturer ---> [W]holesaler ---> [R]etailer ---> [C]onsumer
Sequence of events: Manufacturer sells to Wholesaler sells to Retailer, then Consumer. (Say they are in the furniture business)
-------Sales----Input Tax---Output Tax
[M]---$100----$0------------$5
[W]---$200----$5-----------$10
[R]----$300----$10---------$15
[C]----$315
All the GST charged refundable, except the final GST paid by consumer, being
$15.
Example 2:
All scenario the same except that [R]etailer is NOT GST registered business.
Therefore [R]etailer can't charge (Output Tax) GST or get refunds (Input Tax) for GST paid.
-------Sales----Input Tax----Output Tax
[M]---$100-----$0------------$5
[W]---$200-----$5-----------$10
[R]----$300-----$10----------$0
[C]----$310 and above
The Retailer ends up paying $10 of GST but is not able to get a refund for it.
So ultimately he will sell his goods above $310. But with all the other GST
(utilities, petrol, rental, advertising, etc) he has to pay to bring the final
product to you, the final cost you have to pay for GST is definitely way
above $10.
EVEN IF YOU BUY FROM NON-GST REGISTERED BUSINESS, YOU WILL STILL BE PAYING GST, BUT IT IS HIDDEN IN THE COST WHICH DOESN'T SHOW UP IN YOUR RECEIPT. -
buy from ebay
its the best known way thus far to escape gst.
and prices are usually much lower bcause many of them come from the manufacturers themselves and u escape the additional cost due the good changing hands. -
That's why our hawker centres food is getting more expensive!!! Cooking at home is eben more expensive.
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You can't buy some things from ebay, like electricity, food, haircut, mobile services, tv, tables, etc. You can buy small gadgets but not big items, it would
be too expensive to send over. You also risk losing the item during transit and paying for something which is not to your expectation.
FYI, I was ever charged GST for my purchases on ebay, even though they are collectors item and have no verifiable price. The customs at Singapore Post will just estimate and ask you to pay, else you won't collect your item.