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panadoll

What Is The Implication?

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Hi guys...

need your advice..

I went to this ID and actually i have quite a good chemistry with this ID. However, this coy actually is GST registered. As such, i checked with the ID and ask him whether can he do anything with the GST i.e. waive off. He came back to me and said that his boss actually suggested that my job to be signed up under another sister company which eventually is still not yet GST registered. It a good idea and save me at least 2k plus of GST.... BUT.... what is the catch?? Will there be any other implication that i did not think of???

Hope to hear from you guys.

 

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This might be a bit risky, cause if he take the money and close down the second company, u cannot do anything because u sign the contract with the second company

 

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This might be a bit risky, cause if he take the money and close down the second company, u cannot do anything because u sign the contract with the second company

Ya.. i think this risk is not worth to take. 2k vs 30+k..

thanks bro..

 

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Ya.. i think this risk is not worth to take. 2k vs 30+k..

thanks bro..

not only that... warranty after reno is usually 5 yrs... skully this sister coy closes down after ur reno. ur reno will become NO WARRANTY! this is a true story from one of the renotalk peers' t-blogs which i come across last time... so, dun pray pray with sister coy...

 

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Pte cos are like that, one boss with a few cos. Since they are sisters, same same. They will share resources. Important things are:

- remember to get 5 yr warranty.

- make sure the ID is acting in the capacity of the younger sister, namecard.

- Get hold of him/co after job done, usually some teething problems will surface within 6 months, especially "crack", "peel off", "leak", etc etc.

Edited by bepgof
 

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not only that... warranty after reno is usually 5 yrs... skully this sister coy closes down after ur reno. ur reno will become NO WARRANTY! this is a true story from one of the renotalk peers' t-blogs which i come across last time... so, dun pray pray with sister coy...

ok.. that is another good point leh.... i nv thought of that.... :S

 

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ok.. that is another good point leh.... i nv thought of that.... :S

Many small firms with turnover less than 500k pa (figure may be changed by now) are not required by law to register for GST. But many do register to claim GST refunds from the govt on their GST payments (i.e. their purchases). Problem is, once a small firm is GST-registered, that firm is required to charge customers GST (i.e. on their sales). Which is then paid to the govt. To avoid paying the govt the GST on sales, GST-reg firms resort to using a non-GST firm to issue invoices to customers. That is a serious offence. You may get into trouble for abetment if that firm is caught.

You hv to decide if it is a risk worth taking.

Cheers

Edited by BlueFly
 

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Many small firms with turnover less than 500k pa (figure may be changed by now) are not required by law to register for GST. But many do register to claim GST refunds from the govt on their GST payments (i.e. their purchases). Problem is, once a small firm is GST-registered, that firm is required to charge customers GST (i.e. on their sales). Which is then paid to the govt. To avoid paying the govt the GST on sales, GST-reg firms resort to using a non-GST firm to issue invoices to customers. That is a serious offence. You may get into trouble for abetment if that firm is caught.

You hv to decide if it is a risk worth taking.

Cheers

Hmm... can i say that this will only be an offence if the prospecting part is done by the parent coy, and then to avoid paying gst, we ended up signing from the sister coy? If we are directing dealing with the sister coy right from the start, then this will no longer be an offence?

 

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This is my opinion only.

Whether the company want to be GST register or not, it is up to them and if their revenue hit certain amount and yet don't want to register, they take their own risk. If they were caught, they have to answer to the authority. In this case, the risk we have to face is that the company stop their operation or closing down. In many cases, we won't know whether their accounts are being falsified or whatever things they do. But as a consumers, I think we got the rights to sue them if they do not honor the contract.

Frankly speaking, the 7% GST is quite high and don't forget every material is inflating now including transport charges based on the oil prices. Imagine that if your total bill is huge and you have to pay GST on top of it, you will suffer unless you are loaded. I believe the parent company thought of this too and that why they setup a sister or brother company for that purpose but they have to make sure they follow the law requirement accordingly. No one want to setup a company and expecting to be closing down very soon. LOL...

I have nothing against GST or non GST registered company. My main concern is to get and ID / Contractor to do the job according to what I want and of course meet my budget. And one more important thing is that less or no hiccups...Still looking around....

***If someone with law background would advise this even better***

Edited by emobebe
 

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I just thought of one solution for you...

Maybe you should nego for payment stages as in upon completion of certain stages then you pay. This will lower down your risk a bit.

Another possible solution is that you order your own material and ask those suppliers send to site on needed stage. One you can have control over your materials and even if the company close down, you still can hire others to do the jobs according to what you plan earlier on with your materials still there...

Haha...I don't know whether my solution is too naive for this realistic world....:)

 

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Hmm... can i say that this will only be an offence if the prospecting part is done by the parent coy, and then to avoid paying gst, we ended up signing from the sister coy? If we are directing dealing with the sister coy right from the start, then this will no longer be an offence?

hi panadoll,

i'm sorry i can't tell you what u shld do. I also have no right to impose my values or ethics on you, and say "You shld not do that!" nor advise you "Don't do it." etc

The best I can do is to explain the backgrd, the law. And it is for u then to decide. Once you understd why firms want to use a related non-gst-reg company to issue bills to customers, you ask yrself "Why do they do that?", "Why didn't the company ask the sister-company to talk to me in the first place?" And you decide based on what you think.

By the same token, I am not imputing anything adverse too. That is, I'm not accusing the firm in this thread of trying to cheat or anything like that. That is not my purpose and beyond my scope. I'm just pointing out the law and what small firms do, why the practice is common. For all we know, that firm may have valid reasons to do what it has proposed to you. Such as maybe a change of mind, maybe they intend to sell their supplies @ cost to the sister firm to handle yr job and so pay a lower GST amt to the govt, etc. So many possibilities...

But I can share what I did: I told my ppty agent I won't pay GST on the fee she charged to sell my ppty. Neither wld I pay GST to another for the commission in finding a tenant. And to be fair, I also told the tenancy agent I pay ppty tax and wld claim the fee as expenses in my IRAS filing (that was a hint to him..). What he did was his personal business; I could simply use another agent who was not GST-registered if he was unable to accommodate my request. In the end he accommodated my request. That said, usually I ended up paying GST as I had no choice e.g. supermkt, big ppty agency, (big) law firms appointed by the bank to handle legal doc, etc.

Cheers

Edited by BlueFly
 

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