The Assisted Self-help Kit (ASK) is a comprehensive GST self-assessment compliance package to help businesses review their GST submissions and uncover errors. It is akin to a GST health check.
Errors uncovered using the ASK qualify for IRAS’ Voluntary Disclosure Programme. GST-registered businesses will enjoy waiver of, or a reduced penalty of 5%. This is opposed to errors uncovered by IRAS arising from a GST audit, where the penalties imposed by IRAS may be as high as 200%.
When do I need to use the ASK?
During the course of assisting our clients with the ASK, we observed that the ASK is used by GST-registered businesses for the following purposes:
(1) Applying for special GST schemes
The ASK is required for the application and renewal of special GST schemes such as:
Import GST Deferment Scheme (IGDS)
Approved Contract Manufacturer and Trader Scheme (ACMT)
Approved Marine Customer Scheme (AMCS)
Approved Refiner and Consolidator Scheme (ARCS)
Approved Import GST Suspension Scheme (AISS)
Approved Third Party Logistics (3PL) Company Scheme
For the above purposes, the ASK must be performed by an Accredited Tax Professional registered with the Singapore Institute of Accredited Tax Professionals (SIATP).
(2) Invited by IRAS to perform ASK
Other than used in the application of special schemes such as MES, in recent years, IRAS has sent invite letters to targeted GST-registered businesses to undertake ASK on a voluntary basis. While not compulsory, most GST-registered businesses have come forward to perform ASK by themselves or with the help of Accredited Tax Professionals. The IRAS has clarified that the invite letter to perform ASK is not a GST audit. Therefore, errors uncovered from the ASK will qualify as a voluntary disclosure with penalty waiver or reduced penalty. However, there is a deadline to complete the ASK. It is important to meet the deadline or to communicate to the IRAS any request for extension of the deadline. (Otherwise, IRAS may launch a GST audit on you instead!)
(3) Disclosing known errors
GST-registered businesses may uncover GST errors from their day to day operations. A recent trend in the last 2 years, we are seeing more and more GST-registered businesses turning to the ASK as a tool in disclosing their errors. The feedback received from our clients is that the ASK is a holistic approach to address the GST issues and errors. In addition, the benefits accorded under the Voluntary Disclosure Programme were great "carrots" for them to come forward to disclose their errors.
Update on the ASK
The extensive use of the ASK has significantly increased the number of GST-registered businesses who have availed themselves to this tool. As a result, the IRAS is now simplifying the disclosure process for GST errors uncovered from the ASK.
Prior to 5 Sep 2017, errors uncovered no matter how big or small, must be reviewed and agreed with the IRAS before the GST-registered business rectifies the errors.
From 5 Sep 2017, the IRAS has released a list containing some of the common errors they have received to date, and the accepted rectification approach, so that prior approval is no longer required. Some of these errors relate to:
Format of tax invoices (e.g. if the word "Tax" is missing from your invoices, you do not need to rectify for the past invoices already issued unless your customer requests for a revised tax invoice).
Late reporting of output taxes due to timing differences.
Out-of-scope supplies wrongly reported as zero-rated supplies or exempt supplies.
The value of standard-rated supplies was derived by re-grossing the value of output tax instead of aggregating the values before GST as shown on the invoices.
Deemed supplies (e.g. gifts, business goods put to private use) omitted.
Vehicle number not indicated on export permit for exports via land as the number is not known at the point of export permit declaration.
Omitted to report export of goods not supported by sales (at the point of export) as zero-rated supplies (e.g. goods are exported to warehouse located outside Singapore for storage purposes without change of title/ ownership of the goods).
Zero-rated supplies wrongly treated as out-of-scope supplies or exempt supplies.
Omitted to report zero-rated purchases (e.g. air ticket expenses, overseas call charges) as taxable purchases.
Input taxes were claimed using your own in-house exchange rate instead of the exchange rate stated in the suppliers' tax invoices issued in a foreign currency.
Value of MES imports wrongly reported based on import processing date/ goods receipt date/ supplier's invoice date instead of permit date.
GST-registered businesses may adopt the administrative concessions if the errors fall within the list and that the conditions specified are satisfied. There is no need to seek IRAS' approval to enjoy any of the administrative concessions. Unless otherwise stated, the administrative concessions will only apply to past errors and GST-registered businesses are required to take remedial actions to prevent recurrence of the errors.
At the same time, the GST-registered business is required to make a declaration that the information disclosed is true and complete. In the event that IRAS discovers that the GST-registered business has wrongly applied or abused any administrative concession or made a false or incorrect declaration or failed to take remedial actions, enforcement actions (such as the recovery of tax and the imposition of penalties) may be taken against the GST-registered business.
In light of the above, GST-registered businesses may take this opportunity to examine the list to get a better understanding of the errors and to review if the same mistakes may have been made.
As they say, "Smart people learn from their mistakes. Geniuses learn from others." So, even if you are not undertaking the ASK, we have found this list useful and the administrative concessions practical.