Mixed supplies input tax needs a review of what the company’s purchases support, rather than an assumption that all GST on supplier invoices is recoverable. Identify taxable activities, exempt activities and shared costs, then ask the accountant to assess the applicable recovery rules and exceptions.
Identify the actual supplies
Prepare an activity list supported by contracts, invoices and the relevant transaction records. Do not confuse an exempt supply with a zero-rated taxable supply or an out-of-scope transaction. A non-standard invoice description is a reason to ask for classification advice, not a basis for choosing the most convenient category.
Tell the accountant about new activities before the GST return is finalised. A company that previously recovered all input tax may need a fresh assessment when its supplies change. The correct treatment depends on the facts and relevant rules.
Preserve direct and shared cost information
Identify costs clearly connected to particular activities and costs used across the business. Retain supplier documents and a description of the business use. Avoid moving costs into a general overhead code solely to make them easier to claim.
Example: premises support two activities
A company uses the same premises for a taxable business activity and an activity that may produce exempt supplies. Keep the expense evidence and explain the use of the space. Ask the accountant whether and how the input tax should be attributed or apportioned. This guide does not prescribe a universal floor-area allocation.
Ask about the complete rule
IRAS has specific guidance on input tax incurred to make exempt supplies. Recovery restrictions, attribution, apportionment and relevant exceptions need to be considered together. Do not apply an arbitrary percentage or assume that a small exempt receipt always has no consequence.
Retain the reviewed calculation
Keep the classification, calculation basis, supporting records and accountant’s conclusion for the relevant period. Record any change from an earlier approach and why it was made. Review subsequent adjustments through the proper process instead of silently changing old figures in the working file.
Related practical guidance
For the surrounding records and responsibilities, see bookkeeping basics, company records to keep, bookkeeping and accounting.
Official guidance: IRAS official guidance.
Help with your company records
For accounting, bookkeeping and related compliance support, contact Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Tell us which records or process need attention so we can discuss the relevant next steps.
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