A business may recover GST already accounted for on an unpaid supply only after all six IRAS conditions are met.
The claim goes into Box 7 and is declared in Box 11, must be made within five years of supply, and must be partly repaid if money is later recovered.
Start with GST already paid
The relief concerns output tax that the supplier accounted for and paid on a taxable supply for money consideration. An ordinary accounting loss is not enough. Tie the tax invoice, GST return and ledger entry together before testing the remaining conditions. (IRAS bad debt relief)
IRAS requires the whole or relevant part of the consideration to be written off as a bad debt in the accounts. A general doubtful-debt provision is not the same evidence as a specific write-off. Keep the journal and approval.
Normally 12 months must have elapsed from the date of supply, unless the debtor became insolvent earlier. Record the supply date, due date, insolvency evidence if used, and proposed claim period.
| Situation | What changes |
|---|---|
| Twelve months have elapsed since supply | Test all six conditions |
| Debtor became insolvent earlier | Check whether the earlier trigger applies |
| Debt was not written off in the accounts | Do not claim yet |
| Customer later pays | Calculate and report the repayment in Box 6 |
Document reasonable recovery steps
Reminder notices, calls, formal demands and other proportionate actions show that the business tried to recover the amount. The correct effort depends on the debt and resources, but doing nothing is weak support for relief. (IRAS self-review checklist)
The supply value must not exceed open market value, and ownership must have transferred where goods were supplied. Use the IRAS checklist line by line and preserve it even though it is not submitted with the return.
Include the GST amount in Box 7 and answer yes with the amount in Box 11. The claim limit is five years from the supply date. Calendar the final eligible return period rather than using a loose year-end reminder.
Example: A S$10,900 invoice includes S$900 GST and later has S$5,450 still unpaid. If every condition is met, the working GST component of that unpaid half is S$450. This is a worked arithmetic example; use the tax rate and IRAS formula for the actual supply.
Reverse the benefit after recovery
If the customer later pays, repay the corresponding relief using the prescribed fraction and include it in Box 6 for that period. Keep the original claim and every later receipt linked so partial recoveries are not missed.
