How will GST hike affect our pay installment by credit card?


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cheersjy

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Jul 1, 2003
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#1
I am planning to get new toy by interest-free credit card installment from CP before 1 Jul, so the price will not be affected by the GST hike. However, as explained in this website ( http://www.iras.gov.sg/ESVPortal/resources/faqforconsumersv4.doc ), it seems that only the amount paid before 1 Jul will be subjected to 5% GST. The outstanding amount to be paid later will still be subjected to 7% GST.

Does this mean that i still cannot escape the GST hike (unless pay in full)? Can anyone verify this? Thanks :embrass:
 

matrixneo

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Jul 14, 2006
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#2
I am planning to get new toy by interest-free credit card installment from CP before 1 Jul, so the price will not be affected by the GST hike. However, as explained in this website ( http://www.iras.gov.sg/ESVPortal/resources/faqforconsumersv4.doc ), it seems that only the amount paid before 1 Jul will be subjected to 5% GST. The outstanding amount to be paid later will still be subjected to 7% GST.

Does this mean that i still cannot escape the GST hike (unless pay in full)? Can anyone verify this? Thanks :embrass:
yes u r right..this example was quoted in the papers some time ago...yes...before 1 Jul ..5% after that 7%...so best..buy with wat u have...not like Money Not Enough....every single luxury item under installment....

now...does that apply to vehicle loan as well?
 

cheersjy

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#3
yes u r right..this example was quoted in the papers some time ago...yes...before 1 Jul ..5% after that 7%...so best..buy with wat u have...not like Money Not Enough....every single luxury item under installment....
Very true indeed :thumbsup: :thumbsup:
 

jsbn

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Jul 24, 2002
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#4
yes u r right..this example was quoted in the papers some time ago...yes...before 1 Jul ..5% after that 7%...so best..buy with wat u have...not like Money Not Enough....every single luxury item under installment....

now...does that apply to vehicle loan as well?
If it applies to ur lenses that costs a few thousand bucks, u can sure bet ur life on it that it will affect ur vehicle loan that runs into tens of thousands of buckaroos.

And all those who are mad enuff to go for the 0% downpayment drive away and take out full 10yr loan are going to suffer like crazy nw - either we see less cars on the road (great for public transports) or see more bankrupts.
 

kietgnoel

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Dec 24, 2004
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#5
I am planning to get new toy by interest-free credit card installment from CP before 1 Jul, so the price will not be affected by the GST hike. However, as explained in this website ( http://www.iras.gov.sg/ESVPortal/resources/faqforconsumersv4.doc ), it seems that only the amount paid before 1 Jul will be subjected to 5% GST. The outstanding amount to be paid later will still be subjected to 7% GST.

Does this mean that i still cannot escape the GST hike (unless pay in full)? Can anyone verify this? Thanks :embrass:
I cannot verify this but I don't think so. You are paying CP the full amount using your credit card, so as far as that transaction is concerned, it will be completed there and then. Therefore, 5% GST applies as long as you make the purchase before 1st July.

What you owe the bank (via credit card purchases) is not considered a transaction for goods and services so it does not attract GST. If it is, you would be paying GST twice.......
 

yqt

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Sep 8, 2004
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#6
I cannot verify this but I don't think so. You are paying CP the full amount using your credit card, so as far as that transaction is concerned, it will be completed there and then. Therefore, 5% GST applies as long as you make the purchase before 1st July.

What you owe the bank (via credit card purchases) is not considered a transaction for goods and services so it does not attract GST. If it is, you would be paying GST twice.......
This makes sense. But would this not be the same case for any other loan which we take? Buy car from agent, Bank pay agent in full including GST amount, I don't think the bank charge GST for loans, just interst.

Anyone got more info?
 

Dec 3, 2004
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Bishan
#7
Housing loan leh?
yes u r right..this example was quoted in the papers some time ago...yes...before 1 Jul ..5% after that 7%...so best..buy with wat u have...not like Money Not Enough....every single luxury item under installment....

now...does that apply to vehicle loan as well?
 

Terence

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Nov 16, 2003
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#10
Someone please correct me if I'm wrong but I think GST is only levied against the stamp duty of any property transaction. This works out to be about $30,000 (stamp duty) for a million dollar property. It's sizable so obviously the 2% increase in gst will have a larger dollar impact. But what to do? You got to buy if you want a roof over your head. If one steps back and look at the broader picture, the growing property market will likely offset the increase in gst as your property investment grows in value over time.
 

V

vince123123

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#11
I doubt that the new GST rates apply to any installment payments made after the date. However, I cannot be sure :)
 

yqt

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Sep 8, 2004
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#12
Just spoke to a friend and he bring up a point.
When you buy a cam. from any shop you pay GST for the Camera ( Goods ).
When the bank allows you to by installment, they provide you a service, so if they charge you GST for the service, it's normal?

Camera = Goods ( provided by the shop )

Pay by installment = Service ( a service provided by the bank )

GST = Goods and Service Tax

:dunno: :dunno:
 

V

vince123123

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#13
The bank paid the whole of the price for the camera at that point in time, so GST is incurred then and paid then.

If it is a 0% installment plan, they would have worked out the amount of GST to charge you (which would probably be covered by partially or wholly from the GST you would have paid the shop anyway). The total amount is worked out at that point in time and the bank then agrees that you can defer payment over a period of time.

Hence, the total amount incurred at that time is still fixed and is already paid to the Government. GST will not be paid piecemeal to the Government each time an installment is paid.

Once again, this is just my own personal logical thinking and is not supported by any detailed research on tax laws.

Just spoke to a friend and he bring up a point.
When you buy a cam. from any shop you pay GST for the Camera ( Goods ).
When the bank allows you to by installment, they provide you a service, so if they charge you GST for the service, it's normal?

Camera = Goods ( provided by the shop )

Pay by installment = Service ( a service provided by the bank )

GST = Goods and Service Tax

:dunno: :dunno:
 

Terence

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Nov 16, 2003
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#14
I am planning to get new toy by interest-free credit card installment from CP before 1 Jul, so the price will not be affected by the GST hike. However, as explained in this website ( http://www.iras.gov.sg/ESVPortal/resources/faqforconsumersv4.doc ), it seems that only the amount paid before 1 Jul will be subjected to 5% GST. The outstanding amount to be paid later will still be subjected to 7% GST.

Does this mean that i still cannot escape the GST hike (unless pay in full)? Can anyone verify this? Thanks :embrass:
Isn't it logical to get the answer from the horse's mouth? Ask the bank or CP la...
 

eyes

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Nov 15, 2003
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#16
I'm sure the banks can't charge you for GST. But I'm sure they can change the interest rates of the credit loan mid-way. Most banks has terms and conditions like, "...interest rates may be revised during use of (Name your favourite bank here) (Name the bank's fanciful name of the credit facility here) facility."

There's nothing the consumer can do about it. When you applied for the facility, you agreed to the terms. If you back out, ot tell the bank you cannot agree anymore, you got to pay the full sum for the account to be closed.

I'll never understand why people fund a hobby with debts by borrowing from legal loansharks. :dunno:
 

Virgo

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Dec 23, 2003
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#17
Bank will pay the merchant at that point of transaction on your behalf, then it will bill you on the amount, either by a single payment or using monthly installments. There will not be any adjustments due to the GST increase.

It goes the same for housing and car loans. However, if your interest rates aren't fixed, then there is still a possibility that the bank will increase the rates, but most car loan interest rates are fixed. Housing loans are another cups of tea altogether, which fluctuates from time to time.
 

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