Singapore GST – GST Guide on Zero-rating Telecommunication and Related Services under Section 21(3)(q)


The IRAS has published the e-Tax Guide on Zero-rating Telecommunication and Related Services under Section 21(3)(q) of the GST Act on 14 October 2016, which seeks to explain the application of the zero-rating relief for telecommunication and telecommunication-related services under Section 21(3)(q).

What does Section 21(3) of the GST Act provide?

Section 21(3)(q) of the GST Act specifies that prescribed services involving international telecommunication transmission can qualify for zero rating (i.e. charging GST at 0%). The qualifying telecommunication services that can be zero-rated under section 21(3)(q) are prescribed under Fifth Schedule of the GST (International Services Order).

What is prescribed telecommunication services?

In order for the zero-rating treatment under section 21(3)(q), the telecommunication service has to satisfy both the following conditions:

(a) falls within paragraphs 1 to 5 of the prescribed services* in the Fifth Schedule; and

(b) comprises international transmission, i.e. the provision of any means of telecommunication transmitted: (i) from a place outside Singapore to another place outside Singapore; (ii) from a place in Singapore to a place outside Singapore; or (iii) from a place outside Singapore to a place in Singapore.

The telecommunication service cannot qualify for zero-rating under section 21(3)(q) if the transmission is from a place in Singapore to another place in Singapore (i.e. local transmission). For example, if the transmission is from a point in Singapore to Hong Kong and back to another point in Singapore, it is considered as a local transmission.

The belonging status of your customer (i.e. whether he belongs in Singapore or outside Singapore) is not relevant in determining whether the prescribed telecommunication services can be zero-rated under section 21(3)(q). Paragraph 6 of the Fifth Schedule specifically excludes the following types of supply from the scope of Fifth Schedule: (a) Sale and lease of telecommunications equipment, notwithstanding that the sale or lease may be in connection with international transmission; and (b) Repair, maintenance or management services which are not in connection with international transmission. 2.6 The repair, maintenance or management services can be regarded as prescribed services under paragraph 5 of the Fifth Schedule if they are provided in connection with international telecommunication transmission by the same supplier and are ancillary services to the provision of prescribed telecommunication services.

Paragraph 6 of the Fifth Schedule specifically excludes the following types of supply from the scope of Fifth Schedule: (a) Sale and lease of telecommunications equipment, notwithstanding that the sale or lease may be in connection with international transmission; and (b) Repair, maintenance or management services which are not in connection with international transmission. 2.6 The repair, maintenance or management services can be regarded as prescribed services under paragraph 5 of the Fifth Schedule if they are provided in connection with international telecommunication transmission by the same supplier and are ancillary services to the provision of prescribed telecommunication services.

  • Sale and lease of telecommunications equipment, notwithstanding that the sale or lease may be in connection with the international transmission; and
  • Repair, maintenance or management services which are not in connection with the international transmission.

The repair, maintenance or management services can be regarded as prescribed services under paragraph 5 of the Fifth Schedule if they are provided in connection with international telecommunication transmission by the same supplier and are ancillary services to the provision of prescribed telecommunication services.

If you have any questions, contact support@whm-consulting.com.

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