As a GST-registered business in Singapore, you are generally allowed to claim input tax based on valid tax invoices or import permits—even before settling the payment with your supplier.
However, under Inland Revenue Authority of Singapore (IRAS) regulations, you are required to pay your supplier within 12 months from the payment due date.
If any amount remains unpaid past this 12-month threshold, you must repay the previously claimed input tax back to the Comptroller of GST.
1. What happens if you make a partial payment within 12 months?
If you have settled a portion of the invoice but the remaining balance is still outstanding after 12 months, you must repay the input tax corresponding to the unpaid portion.
This repayment is calculated using the tax fraction (currently 9/100 the 9% GST rate):
Example 1: Partial Settlement
Invoice total (GST-inclusive): $140
Partial payment made: $50
Unpaid balance after 12 months: $90
Calculation:
Action Required: You must repay $7.43 of input tax back to the Comptroller of GST in your relevant GST return.
2. Can you reclaim the input tax if you pay your supplier later?
Yes. If you pay your supplier after the 12-month deadline, you are permitted to reclaim the repaid input tax, provided the payment is made within 5 years from the end of the accounting period in which the input tax was originally claimed.
Example 2: Delayed Full Settlement
Original Claim: You claimed input tax in your GST return for the accounting period ending 30 June 2024.
Repayment: Because the invoice was not paid within 12 months of the due date, you repaid the input tax to the Comptroller.
Subsequent Payment: You paid the supplier in full on 1 June 2026.
Outcome: Since 1 June 2026 is within 5 years of 30 June 2024, you can safely reclaim the input tax in your GST return for the accounting period ending 30 June 2026.
Key Takeaways for Business Owners
Monitor Aging Payables: Regularly review your Accounts Payable aging report to flag invoices approaching the 12-month mark.
Maintain Accurate Records: Track when input tax was repaid to ensure you do not miss the 5-year window to reclaim it once settled.
Adjust GST Returns Promptly: Ensure input tax repayments or re-claims are correctly reported in the appropriate accounting periods to avoid non-compliance penalties.
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