{"id":1452,"date":"2019-12-05T11:36:02","date_gmt":"2019-12-05T03:36:02","guid":{"rendered":"http:\/\/ehluar.com\/main\/?p=1452"},"modified":"2020-01-25T11:50:53","modified_gmt":"2020-01-25T03:50:53","slug":"registration-requirements-under-the-reverse-charge-scheme","status":"publish","type":"post","link":"http:\/\/ehluar.com\/main\/2019\/12\/05\/registration-requirements-under-the-reverse-charge-scheme\/","title":{"rendered":"Registration requirements under the reverse charge scheme"},"content":{"rendered":"\n<p>From 1 January 2020, a non-GST registered business would be liable for GST registration by virtue of the reverse charge rules under the following circumstances:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>the value of imported services made by the business which fall within  the scope of reverse charge exceeds $1 million in a 12-month period, under either the retrospective or prospective basis: <ul><li>Retrospective basis: the value of imported services for the calendar year (i.e. 1 January to 31 December) has exceeded $1 million. Businesses which do not have a 31 December financial year-end are required to apply the retrospective test based on the calendar year<\/li><li>Prospective basis: the business expects the value of its imported services for the next 12 months to exceed $1 million, and<\/li><\/ul><\/li><li>the business would not be entitled to full input tax credit if it was GST-registered, i.e. if it: <br><ul><li>carries out non-business activities, or<\/li><li>does not make any supply, or<\/li><li>fails the <em>de minimis<\/em> rule (for the same 12-month period during which the value of its imported  services has exceeded or will exceed $1 million. Even if the business fails the <em>de minimis<\/em> rule, it would be regarded as entitled to full input tax credit (and hence not a reverse charge business) if it meets any of  the following conditions: <\/li><li>the business makes only reg 33 exempt supplies and the nature of the business is not a reg 34 business<\/li><li>the business is entitled to apply a provision in the GST legislation  that grants it the right to claim its input tax in full, or<\/li><li>the business\u2019 non-reg 33 exempt supplies do not exceed 5% of the total value of taxable and exempt supplies (ie pass the reg 35 test), the business does not incur expenses (including imported  services that are within the scope of reverse charge) that are directly  attributable to the making of non-reg 33 exempt supplies, <strong>and<\/strong> the recoverable residual input tax ratio is 100%. These  conditions prescribed in the e-Tax Guide <em>GST: Taxing imported services by way of reverse charge<\/em>. Previously, the  requirement for a business that fails the <em>de minimis<\/em> rule but makes non-reg 33 exempt supplies not to be subject to reverse charge was as follows: <ul><li>it was entitled to full input tax credit as the value of the non-reg 33 exempt supplies made by it did not exceed 5% of the total value of all its taxable and exempt supplies (ie it passed the reg 35 test), <strong>or<\/strong> <\/li><li>it did not incur expenses that were directly attributable to the making of non-reg 33 exempt supplies, and its recoverable residual input tax ratio was 100%.<\/li><\/ul><\/li><\/ul><\/li><\/ul>\n\n\n\n<p>The IRAS has updated its Frequently  Asked Questions on Reverse Charge to provide clarity on additional areas  of the reverse charge.<\/p>\n\n\n\n<p>Source: IRAS website, 5 December 2019<\/p>\n","protected":false},"excerpt":{"rendered":"<p>From 1 January 2020, a non-GST registered business would be liable for GST registration by virtue of the reverse charge rules under the following circumstances: the value of imported services made by the business which fall within the scope of reverse charge exceeds $1 million in a 12-month period, under either the retrospective or prospective [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9,6],"tags":[],"class_list":["post-1452","post","type-post","status-publish","format-standard","hentry","category-gst","category-techupdates"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/1452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/comments?post=1452"}],"version-history":[{"count":1,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/1452\/revisions"}],"predecessor-version":[{"id":1453,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/1452\/revisions\/1453"}],"wp:attachment":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/media?parent=1452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/categories?post=1452"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/tags?post=1452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}