Statute Details
- Title: Goods and Services Tax (Excluded Transactions) Order
- Act Code: GSTA1993-OR2
- Legislative Type: Subsidiary legislation (Order)
- Status: Current version as at 27 Mar 2026
- Authorising Act: Goods and Services Tax Act (Cap. 117A), in particular provisions referenced in the Order (e.g., sections 10(3) and 86(1))
- Key Provisions: Section 2 (excluded supplies in business transfers), Section 3 (when exclusions do not apply), Section 4 (hire-purchase title transfers), Section 5 (income tax group relief), Section 6 (carbon credits and digital representations), Section 7 (digital payment tokens as consideration)
- Commencement: The Order is presented with historical amendments; the extract indicates key effective dates for specific amendments (e.g., 01/01/2020 for digital payment tokens; 23/11/2022 for carbon credits)
What Is This Legislation About?
The Goods and Services Tax (Excluded Transactions) Order (“the Order”) is a Singapore GST subsidiary instrument that carves out certain transactions from the normal GST treatment. In plain terms, it identifies specific transfers and dealings that would otherwise be treated as “supplies of goods” or “supplies of services” under the Goods and Services Tax Act (Cap. 117A). By excluding these transactions, the Order prevents GST from being charged on them—subject to carefully defined conditions and exceptions.
The Order is particularly important for restructuring and group transactions, where businesses transfer assets or entire business operations. Without an exclusion, such transfers could trigger GST output tax even when the economic substance is a continuation of the business (or a reorganisation within a group). The Order therefore supports commercial continuity and administrative simplicity by aligning GST outcomes with the underlying business reality.
In addition, the Order addresses modern and policy-driven areas: it excludes GST on the issuance/transfer of carbon credits (and digital representations of carbon credits) and excludes GST where digital payment tokens are provided as consideration (with a specific carve-out for transactions that are themselves supplies of money or digital payment tokens). These provisions reflect Singapore’s evolving approach to environmental markets and digital finance.
What Are the Key Provisions?
1. Section 2: Excluded transactions for transfers of business assets (going concern)
Section 2 sets the baseline exclusion. Except in the circumstances described in paragraph 3, certain supplies by a person of assets of his business are treated as neither a supply of goods nor a supply of services. The exclusion applies where the person supplies assets to another person in the context of transferring a business as a going concern.
Two scenarios are covered:
- Full business transfer (Section 2(a)): assets are transferred to a person to whom the transferor transfers his business as a going concern, provided that the transferee will use the assets to carry on the same kind of business (whether or not as part of an existing business) and, where the transferor is a taxable person, the transferee is already or immediately becomes a taxable person as a result.
- Partial business transfer (Section 2(b)): assets are transferred as a going concern for part of a business, but only if that part is capable of separate operation, the transferee will use the assets to carry on the same kind of business in relation to that part, and the taxable person condition is satisfied (transferee is already or immediately becomes a taxable person).
Practical effect: If the transaction meets these conditions, GST is not charged on the transfer of the relevant assets because the law treats the transfer as outside the GST “supply” concept.
2. Section 3: When the exclusion does not apply (group relief and Comptroller safeguards)
Section 3 introduces a critical limitation. Paragraph 2 (the exclusion) does not apply to certain asset transfers where the transfer is within a GST group context under section 30 of the GST Act. Specifically, where a business (or part) carried on by a taxable person is transferred as a going concern to another taxable person treated as a member of a group under section 30, and assets are transferred to that taxable person, then paragraph 2 shall not apply and tax is chargeable in accordance with the Act.
However, Section 3(2) provides exceptions where the exclusion still effectively applies. The exclusion is not denied if one of the following is satisfied:
- Input tax credit continuity (Section 3(2)(a)): members of the group are entitled to credit for the whole of the input tax on supplies to them and acquisitions/importations by them during the prescribed accounting period in which the assets are transferred, and during any longer period covered by regulations under section 20(4)(b) of the GST Act.
- Timing safeguard (Section 3(2)(b)): the Comptroller is satisfied that the assets were assets of the transferring taxable person more than 3 years before the day on which they are transferred.
- No input tax credit received (Section 3(2)(c)): the Comptroller is satisfied that the transferee has not received any credit for input tax arising on the supply to him or acquisition/importation by him of the asset.
Why this matters: Section 3 is designed to prevent GST avoidance through group transfers while still allowing relief where input tax recovery is not undermined or where the assets are effectively “older” and less likely to have been subject to recent input tax claims.
3. Section 4: Hire-purchase finance title transfers/assignments
Section 4 addresses a specific commercial arrangement: hire-purchase agreements. Where a provider of hire-purchase finance transfers or assigns his title to goods comprised in a hire-purchase agreement, together with the hire-purchase finance relating to such goods, the transfer/assignment of title is treated as neither a supply of goods nor a supply of services.
The provision defines “hire-purchase finance” as instalment credit finance in a hire-purchase agreement. The legal consequence is that the transfer/assignment of title by the finance provider does not trigger GST as a supply, provided it is done together with the relevant finance.
Practical effect: This supports the secondary market and internal financing arrangements where title in goods may be assigned without intending a GSTable sale.
4. Section 5: Income tax group relief transfers of qualifying deductions
Section 5 provides that where a person transfers any “qualifying deduction” to another person under section 37C of the Income Tax Act (Cap. 134), that transfer is treated as neither a supply of goods nor a supply of services.
This is a cross-tax alignment provision: it ensures that the transfer of certain tax attributes (qualifying deductions) under the income tax grouping mechanism does not become a GSTable event.
5. Section 6: Carbon credits and digital representations
Section 6 is a major policy update. It states that the issuance or transfer (including by way of sale) of any carbon credit or any digital representation of a carbon credit is treated as neither a supply of goods nor a supply of services.
To avoid doubt, issuance includes crediting of a carbon credit by the National Environment Agency (NEA) into any registry account under the Carbon Pricing Act 2018. The provision also defines “carbon credit” broadly, including:
- a certificate representing greenhouse gas emissions reduction or removal (including avoidance);
- a right to emit any greenhouse gas; and
- a means to satisfy any tax or regulatory obligation arising from greenhouse gas emissions.
It further incorporates definitions of “greenhouse gas” and “registry account” from the Carbon Pricing Act 2018 and defines NEA by reference to the National Environment Agency Act 2002.
Practical effect: Market participants can trade or receive carbon credits without GST being charged on the issuance/transfer itself, which is crucial for the functioning of carbon markets and pricing.
6. Section 7: Digital payment tokens as consideration
Section 7 provides that the provision of digital payment tokens as consideration in respect of any transaction (other than a transaction for a supply of money or digital payment tokens) is treated as neither a supply of goods nor a supply of services.
Interpretation in practice: The provision is aimed at the use of digital payment tokens (e.g., cryptoassets) as payment. It prevents the act of paying with tokens from being treated as a GSTable supply by the payer. The limitation—“other than a transaction for a supply of money or digital payment tokens”—signals that if the underlying transaction is itself a supply of money or tokens (e.g., exchanging tokens as a business), different GST rules may apply.
How Is This Legislation Structured?
The Order is structured as a short set of operative provisions:
- Section 1 (Citation): provides the short title.
- Section 2 (Excluded transactions): establishes the general exclusion for certain transfers of business assets as going concerns.
- Section 3 (Supplies not to be excluded): creates exceptions—most notably for transfers within GST groups—along with conditions where the exclusion may still apply (input tax credit continuity, asset age, or absence of input tax credit).
- Section 4 (Transfer or assignment of title to goods): excludes GST on hire-purchase title transfers/assignments when bundled with hire-purchase finance.
- Section 5 (Income tax group relief): excludes GST on transfers of qualifying deductions under the Income Tax Act.
- Section 6 (Issuance or transfer of carbon credits): excludes GST on carbon credit issuance/transfer, including digital representations, with definitions and NEA registry mechanics.
- Section 7 (Digital payment tokens): excludes GST where digital payment tokens are provided as consideration, subject to the money/token supply carve-out.
Who Does This Legislation Apply To?
The Order applies to “a person” making supplies under the GST framework—particularly taxable persons. The going concern exclusions in Section 2 and the group-related limitations in Section 3 are drafted with taxable person status in mind, including requirements that the transferee is already or immediately becomes a taxable person.
In practice, the Order is relevant to: (i) businesses restructuring through asset transfers or business sales; (ii) GST group members and advisers managing intra-group reorganisations; (iii) hire-purchase finance providers and purchasers/assignees of hire-purchase finance arrangements; (iv) parties involved in income tax group relief transfers of qualifying deductions; and (v) carbon credit market participants and digital token payment users.
Why Is This Legislation Important?
This Order is important because it directly affects whether GST output tax arises on transactions that are economically significant but not intended to be treated as ordinary taxable supplies. For practitioners, the key value lies in reducing GST friction in legitimate reorganisations and market operations—while also providing guardrails against abuse.
For business transfers and reorganisations: Section 2 provides a pathway to treat going concern transfers as non-supplies for GST purposes. However, Section 3 demonstrates that intra-group transfers can be treated differently, especially where input tax credits could be preserved in a way that undermines GST neutrality. Practitioners must therefore assess not only whether the transaction is a going concern transfer, but also whether it occurs within a GST group and whether the Section 3(2) conditions can be satisfied (including evidence needed to support the Comptroller’s satisfaction).
For carbon and digital payment markets: Sections 6 and 7 reflect policy choices to prevent GST from distorting environmental credit markets and payment mechanics. For legal and tax teams, these provisions reduce uncertainty in contract drafting and invoicing—particularly where carbon credits are issued, credited into registries, or traded, and where digital payment tokens are used as consideration.
Overall, the Order is a targeted set of exclusions that practitioners should treat as a “transaction design” tool: it informs how deals are structured, how consideration is described, and what documentation is needed to support the intended GST outcome.
Related Legislation
- Goods and Services Tax Act (Cap. 117A) (including section 30 on GST groups; section 20(4)(b) referenced in Section 3(2)(a); and provisions referenced in the Order’s authorisation)
- Carbon Pricing Act 2018 (definitions and registry mechanics referenced in Section 6)
- Income Tax Act (Cap. 134) (section 37C referenced in Section 5)
- National Environment Agency Act 2002 (NEA definition referenced in Section 6)
- Services Tax Act (listed in the provided metadata; relevant context may depend on the legislative history and cross-references)
- Legislation timeline / authorising materials (for version control and amendment history)
Source Documents
This article provides an overview of the Goods and Services Tax (Excluded Transactions) Order for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.