What You Need to Know About 2024’s GST Hike: When Does the 9% Not Apply?

As we’re all already aware, starting from 1 January 2024, the second tranche of Singapore’s Goods and Services tax (GST) hike commences – increasing from 8% to 9%.

With 2023 drawing to a close, everyone has been scrambling to take advantage of the remaining days of 8% GST. Although this 1% increase (to 9% GST) seems marginal and insignificant initially, we'll feel the brunt of it when everyday purchases and big-ticket items quickly add up.

For all your (last-minute) Christmas shopping, the 8% GST rate remains pretty straightforward. But what happens for other scenarios where you placed an order in 2023, but your invoice, receipt and/or items only arrive on or after 1 January 2024? That’s when major confusion arises.

In this article, we’re going to clear the air on these awkward “8% or 9%?” GST scenarios.

Table of contents

• Full payment made in 2023
• Partial payment made in 2023 & 2024
• Invoice & delivery in 2023; full payment in 2024
• Invoice & partial delivery in 2023; full payment in 2024
• Invoice in 2023; delivery & full payment in 2024
• Buy-Now-Pay-Later schemes
• How to calculate GST & service charge in 2024?

Overview: Changes Made to GST

Here’s an overview of the changes made to the GST from the IRAS website for each specific scenario. We will dive into greater detail later on.

Invoice issued in 2023

Invoice issued in 2024

Source: IRAS

Full payment made in 2023; Received on/after 1 Jan 2024

The scenario typically applies to purchasing stocks or pre-ordering items, either in person from overseas retailers or online through platforms like Taobao or Shopee.

Once full payment is made, the invoice will reflect the 8% GST. This is regardless of when you receive the item or when the service is completed, even if you receive it in 2024.

Here's an example to illustrate:

Scenario 1

You purchased an item on 20 Dec 2023 and received a same-day tax invoice, but it's only stipulated to be delivered on 10 Jan 2024.

Your purchase will be charged at 8% GST since full payment was made and received by the seller before 1 Jan 2024.  

Partial payment made in 2023; Received on/after 1 Jan 2024

How about the scenario where you only made partial payment in 2023 though? Meaning, you paid for half of your purchase in 2023 and the remaining half in 2024, with the item or service only being delivered in 2024 thereafter.

The partial payment received by the supplier in 2023 will be charged at 8% GST, regardless of when the invoice is issued or when the item or service is delivered to you.

However, the remaining payment received by the supplier in 2024 thereafter will be charged at 9% GST.

Here's an example to illustrate:

Scenario 2

On 20 Dec 2023, you purchased S$500 worth of goods to be delivered on 10 Jan 2024. You received a same-day tax invoice and made partial payment of S$200 to the supplier on that day itself.

Meanwhile, the remaining S$300 payment will be made to the supplier in 2024.

Your initial S$200 partial payment will be charged at 8% GST it was received by the seller before 1 Jan 2024. However, the remaining S$300 partial payment will be charged at 9% GST since it was received by the seller on/after 1 Jan 2024.  

This usually applies to big-ticket items like renovation works, wedding packages and furniture, where vendors usually request a deposit to be made, while the remainder is either paid in instalments or in a lump sum after the full service or product is completed/received.

Read more:
Average Cost Of Home Renovations In Singapore 2023
Renovating Your Home: Should You Take a Renovation Loan
How To Save Thousands Of Dollars On Home Renovation
Best Renovation Loans in Singapore (2023) 

Invoice & delivery issued in 2023; Payment made on/after 1 Jan 2024

Now we come to trickier situations: What happens if you received the tax invoice and item or service in 2023 itself? However, payment is only made in 2024?

Despite the seemingly complicated predicament, the conclusion is surprisingly straightforward. Since both the tax invoice and item or service were received in 2023, it will be chargeable at 8% regardless of when payment is made – yes, even if you only pay in 2024.

Here's an example to illustrate:

Scenario 3

You receive a tax invoice on 20 Dec 2023 for cleaning services provided to you on 19 Dec 2023. However, payment is only made and received by the vendor on 15 Jan 2024.

Your payment will be subjected to the 8% GST rate, instead of the prevailing 9% GST (by then). This is because both the tax invoice and service were provided in 2023.  

Invoice issued in 2023; Partial delivery in 2023; Payment on/after 1 Jan 2024

Arguably one of the most convoluted scenarios here, don't worry, we'll walk you through it.

For the tax invoice and partial items or services received by you in 2023, you'll be charged 8% GST on the value received in 2023. However, for the remaining value of items or services received on/after 1 Jan 2024, you'll be subjected to 9% GST instead.

For the latter, the supplier will issue a credit note to adjust the 8% GST on the value of items or services received on/after 1 Jan 2024. Meanwhile, a new tax invoice will be issued to charge the 9% GST on the value of on the remaining value of items or services from 8% to 9%, reflecting this change in a new tax invoice issued to you on/after 1 Jan 2024. 

Here's an example to illustrate:

Scenario 4

On 10 Dec 2023, you received a tax invoice for cleaning services provided in two batches: 20 Dec 2023 and 20 Jan 2024. Payment is only made and received by the vendor on 20 Jan 2024.

In this case, the vendor will issue a credit note to adjust the GST charged at 8% on the value of cleaning service received on/after 1 Jan 2024. Meanwhile, a new tax invoice will be issued to charge 9% GST on the value of cleaning service received on/after 1 Jan 2024.

Invoice issued in 2023; Full payment & delivery on/after 1 Jan 2024

If you make full payment and receive the items or services on/after 1 Jan 2024, you will be subjected to the new 9% GST, even if the tax invoice was issued in 2023. 

In such a situation, the original tax invoice will initially reflect the 8% GST. However from 2024 onwards, the supplier will issue a credit note to cancel the original tax invoice and issue you a new tax invoice reflecting the 9% GST adjustment.

Scenario 5

You purchased an item and received a tax invoice in 2023. However, the supplier only received payment on 5 Jan 2024 and the item was only delivered on 10 Jan 2024. 

You'll therefore be charged the prevailing 9% GST despite being issued an initial 8% GST tax invoice back in 2023. The supplier will issue a credit note to cancel the original tax invoice and issue a new tax invoice reflecting this 9% GST charge. 

💡Pro-tip: For more FAQs on specific GST scenarios during this 8% to 9% transition, refer to IRAS' site.

Buy-Now-Pay-Later (BNPL) schemes

Who doesn’t love Buy-Now-Pay-Later (BNPL) schemes right? It definitely helps to lighten the burden of paying a lump sum at one shot by breaking down the purchase into smaller amounts each month through these instalment plans.

The GST that your item or service is subjected to depends on when you receive it. 

If you receive your item in 2023, all your payments will be subjected to 8% GST, even if you have outstanding payments that roll over into 2024.

Assuming you make your first payment in 2023 but will only receive the item in 2023, then any instalment payments made in 2023 will be subject to 8% GST, while any instalment payments made in 2024 will be subject to 9%.

Maximise your savings with these best credit cards in Singapore to accumulate miles and earn cashback!

See more: Buy Now Pay Later Comparison Guide: Atome, Hoolah and Rely

How to calculate GST and service charge after 2024?

Ask a majority of the people and they will tell you that the way you should calculate the GST and service charge is to just multiply 1.19 to your item or service ie. 9% for GST and 10% for service charge.

However, the actual way to calculate would be to multiply the base price by 1.10 first, followed by 1.09, which is essentially multiplying it by 1.199. You’ll actually realise that there is a slight difference between the two costs. 

If you’re always that person in the friend group who’s paying for everyone first, the cents will eventually accumulate into a significant amount. So thank us later.

So if you break it down:

• GST (9%) only: Price x 1.09
• Service charge (10%) only: Price x 1.10
• GST and service charge: Price x 1.199

Here’s an example:

So after the GST increase to 9%, the correct way of calculating the final price would be to multiply the base price by 1.199 instead.

See also: How to Calculate GST and Service Charge in Singapore (2024)

Defray the GST hike by choosing the best credit cards to lock in more savings on your spendings!