SINGAPORE: The Inland Revenue Authority of Singapore (IRAS) has called out Japanese café chain Nana’s Green Tea over how it applied the Goods and Services Tax (GST) on a customer’s order, after the customer raised concerns.
The customer told Stomp that she was charged more than expected during a visit to Nana’s Green Tea’s Duo Galleria outlet near Beach Road on Jun 17.
According to the customer, she had entered the café with her daughter, who asked for apple juice priced at S$5. They opted for takeaway and proceeded to pay at the counter.
“When the bill was presented, I thought I remembered the price wrongly,” she recounted. “So I double-checked. It was still S$5.”
She questioned the staff member when the final amount came to S$5.50.
“I asked the staff why the bill is S$5.50,” she said. “The female staff member very confidently replied, ‘GST’.”
She pointed out that 9% GST on S$5 would be S$0.45, bringing the total to S$5.45, not S$5.50.
“Why was the bill rounded up?” she asked.
The staff explained it was due to “rounding.”
“I wondered whether this was even legal,” the customer told Stomp, “Is this rounding up trending? I paid digitally. No change was required. So far, I have only encountered rounding down when paying with cash.”
An IRAS spokesperson has since clarified that GST-registered businesses may round their bills to the nearest five cents only to facilitate cash payments, since one-cent coins are no longer in circulation. If a bill is paid digitally, there is no need for such rounding.
“In this instance, it is not right for the business to quote that the rounding from S$5.45 to S$5.50 is due to GST,” the spokesperson told Stomp.
Iras confirmed it had engaged Nana’s Green Tea over the matter and provided guidance on the proper way to handle GST invoicing and rounding.
The authority also stressed that it takes any non-compliance seriously.
“We will investigate and take necessary action against businesses that overcharge and wrongly collect GST on their transactions,” the spokesperson added, “Businesses that commit such wrongdoings without reasonable excuse or through negligence may face fines and penalties.”
Members of the public who encounter questionable GST practices can report them to IRAS at go.gov.sg/irasgst-wrongpractices.
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