[Bigiron]

Here’s a step-by-step explanation of how GST works from raw materials to the final consumer, assuming the product passes through 5 vendors (including the manufacturer) with a 9% GST rate and raw material cost of $10:
 
 
 
1. Raw Material Purchase (Manufacturer)
 
- Cost of raw materials: $10 (GST-exclusive).
- GST paid by manufacturer: $10 × 9% = $0.90.
- Total cost to manufacturer: $10 + $0.90 = $10.90.
The manufacturer claims the $0.90 GST as an input tax credit (ITC).
 
 
 
2. Manufacturer → Vendor 1
 
- Value added by manufacturer: Assume the manufacturer converts raw materials into a product and sells it for $20 (GST-exclusive).
- GST charged by manufacturer: $20 × 9% = $1.80.
- Total price to Vendor 1: $20 + $1.80 = $21.80.
- Net GST paid by manufacturer:
$1.80 (GST collected) – $0.90 (ITC claimed) = $0.90 paid to the government.
 
 
 
3. Vendor 1 → Vendor 2
 
- Value added by Vendor 1: Sells the product for $30 (GST-exclusive).
- GST charged by Vendor 1: $30 × 9% = $2.70.
- Total price to Vendor 2: $30 + $2.70 = $32.70.
- Net GST paid by Vendor 1:
$2.70 (GST collected) – $1.80 (ITC claimed) = $0.90 paid to the government.
 
 
 
4. Vendor 2 → Vendor 3
 
- Value added by Vendor 2: Sells the product for $40 (GST-exclusive).
- GST charged: $40 × 9% = $3.60.
- Total price to Vendor 3: $40 + $3.60 = $43.60.
- Net GST paid: $3.60 – $2.70 = $0.90.
 
 
 
5. Vendor 3 → Vendor 4
 
- Value added by Vendor 3: Sells for $50 (GST-exclusive).
- GST charged: $50 × 9% = $4.50.
- Total price to Vendor 4: $50 + $4.50 = $54.50.
- Net GST paid: $4.50 – $3.60 = $0.90.
 
 
 
6. Vendor 4 → Vendor 5
 
- Value added by Vendor 4: Sells for $60 (GST-exclusive).
- GST charged: $60 × 9% = $5.40.
- Total price to Vendor 5: $60 + $5.40 = $65.40.
- Net GST paid: $5.40 – $4.50 = $0.90.
 
 
 
7. Vendor 5 → Consumer
 
- Value added by Vendor 5: Sells the final product for $70 (GST-exclusive).
- GST charged: $70 × 9% = $6.30.
- Total price to consumer: $70 + $6.30 = $76.30.
- Net GST paid by Vendor 5:
$6.30 (GST collected) – $5.40 (ITC claimed) = $0.90 paid to the government.
 
 
 
Summary of GST Flow
 
Stage GST Collected GST Paid to Government (After ITC) 
Manufacturer $1.80 $0.90 
Vendor 1 $2.70 $0.90 
Vendor 2 $3.60 $0.90 
Vendor 3 $4.50 $0.90 
Vendor 4 $5.40 $0.90 
Vendor 5 (Final Sale) $6.30 $0.90 
Total GST $24.30 $5.40 
 
- Final Consumer Pays: $76.30 (includes $6.30 GST).
- Total GST to Government: $6.30 (9% of the final price of $70).
This matches the cumulative GST paid at each stage ($0.90 × 6 stages = $5.40) + the GST on raw materials ($0.90).
 
 
 
Key Takeaways
 
1. Input Tax Credit (ITC): Businesses claim back GST paid on inputs, so they only pay tax on the value they add.
2. No Double Taxation: GST is a value-added tax; the final consumer bears the total tax.
3. Transparency: The tax burden is visible at each stage but ultimately falls on the end user.

[Bigiron]

### **How GST Works on Healthcare Costs in Singapore**  
In Singapore, **Goods and Services Tax (GST)** applies to most goods and services, including **private healthcare services**. There is **no exemption for private clinics or hospitals**, unlike in some other countries. Here’s how it works:

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## **1. GST on Healthcare Services in Singapore (Current Rate: 9%)**  
| **Service** | **GST Rate** | **Notes** |
|------------|------------|------------|
| **Private clinic consultations** | **9%** | Applies to GP/specialist visits |
| **Private hospital treatments** | **9%** | Includes surgeries, diagnostics, room charges |
| **Medicines & medical devices** | **9%** (or **0%** if exempt) | Some essential drugs may be zero-rated |
| **Dental services** | **9%** | Most private dental treatments |
| **Health insurance premiums** | **9%** | If insurance covers taxable services |

---

## **2. Example: Medical Bill at a Private Clinic**  
Suppose you visit a **private GP clinic** with:  
- **Consultation fee:** **$50**  
- **Medication:** **$30**  
- **Blood test:** **$100**  

#### **Bill Breakdown with GST (9%)**  
| **Service** | **Cost (Before GST)** | **GST (9%)** | **Total Payable** |
|------------|----------------------|-------------|------------------|
| Consultation | $50 | $4.50 | **$54.50** |
| Medication | $30 | $2.70 | **$32.70** |
| Blood Test | $100 | $9.00 | **$109.00** |
| **Total** | **$180** | **$16.20** | **$196.20** |

- **Total GST Paid = $16.20**  
- **Patient bears the full 9% GST** (no exemptions).  

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## **3. Key Rules for GST on Healthcare in Singapore**  
✅ **GST Applies to:**  
- **Private clinics, hospitals, and specialists** (9% GST).  
- **Dental, physiotherapy, and TCM (Traditional Chinese Medicine)** services.  
- **Medicines & medical devices** (unless zero-rated).  

❌ **No GST Exemptions for Private Healthcare**  
- Unlike India (where basic healthcare is GST-free), Singapore taxes **all private medical services at 9%**.  

⚠️ **Exceptions (GST Relief Cases):**  
- **Public healthcare institutions (e.g., polyclinics, government hospitals)** are **subsidized**, but GST may still apply to non-subsidized portions.  
- **MediSave/MediShield Life claims** do not cover GST (patient must pay GST out-of-pocket).  

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## **4. Who Bears the Cost?**  
- **Patients** pay GST on **all private healthcare services**.  
- **Businesses (clinics/hospitals)** can claim **Input Tax Credit (ITC)** for GST paid on supplies (e.g., medicines, equipment).  
- **No GST exemption for senior citizens or low-income groups** (unlike some countries).  

---

## **5. Will GST Increase Affect Healthcare Costs?**  
- **GST in Singapore increased from 8% to 9% in 2024**, making healthcare slightly more expensive.  
- **Example:** A $1,000 surgery now costs **$1,090** (vs. $1,080 before).  

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### **Conclusion: Singapore’s Healthcare GST System**  
- **All private healthcare services attract 9% GST.**  
- **Patients pay the full GST amount** (no exemptions).  
- **Public healthcare (polyclinics, govt hospitals) may have subsidies, but GST still applies on non-subsidized portions.**