Singapore - Pay GST when u eat at million-dollar stall

You won't bat an eyelid if a restaurant charges you the 7 per cent goods and services tax (GST). But pay GST for fried rice at a coffee shop?

The New Paper learnt that 7th Mile Seafood, a zi char stall in Jurong West Street 91, charges its customers GST.

A helper, who declined to be named, said: "Some customers have asked why we imposed the GST and asked if we were out to make a quick buck.

"But we told them that it wasn't something we could help and explained the situation to them." The situation is this - the stall is part of a bigger business that earns more than a $1 million a year.

And the stall isn't the only one to charge GST.

A popular wonton noodle stall in Joo Chiat also slaps a GST charge.

Inland Revenue Authority of Singapore (Iras) figures revealed that more stalls have applied for and been approved to charge GST.

When TNP visited the zi char stall at lunchtime on Monday, there were notices put up to alert customers of the tax, which the stall started to impose since Oct 15.

Displayed above the cash register was a notice addressed to the stall from Iras with the stall's GST registration number.

Of the 13 stalls in the coffee shop, 7th Mile is the only one that charges GST.

Mrs Tang-Lim Siew Choo, 63, the owner of the coffee shop, said the stall owner had alerted her before introducing the GST charge.

She said: "The boss of 7th Mile told me that she had been served a notice that the stall would have to begin charging GST, so we made the necessary preparations."

Menus were altered to reflect the revised prices. A basic dish like fried rice, for example, now costs $3.20 instead of $3. Mrs Tang-Lim, who said she was there "almost every other day", also helped to explain to the patrons the situation.

She said: "Many of the customers are regulars, so I feel responsible to update them on the price changes."

The New Paper could not speak to the stall owner as she was abroad but Mrs Tang-Lim said that her tenant's business now has an annual turnover of more than $1 million.

Under Iras regulations, once turnover exceeds $1 million a year, it is compulsory for the business to be GST-registered.

She added that the stall owner has other food businesses, including a restaurant.

While some customers were unhappy, others felt it was not unfair.

Fair enough

Mr Donald Kuah, 50, a trader, said the increase was "marginal" and the food remained affordable with no drop in quality.

He said: "I still pay between $30 and $35 for a three-course meal for two persons, which includes its signature curry fish.

"I see it as a transparent way of passing on the costs, instead of just jacking up the prices directly," said Mr Kuah.

"Moreover, this place is very clean and the hawkers are friendly and committed to providing good service."

Popular wonton noodle joint Fei Fei started collecting GST from April.

Mr Soh Chip Cheng, 39, a supervisor at Fei Fei, told TNP the eatery, which has two outlets in Joo Chiat Place and is supplied by its own factory, suffered an initial drop in business after implementing GST.

He said: "Many customers asked us why we had to charge GST, so we explained to them the situation." Mr Soh said the business now has an annual turnover of more than $1 million.

He said: "But we're also suffering from rising costs of rental, utilities, ingredients and even the foreign worker's levy."

Mr Soh said that overall, sales have picked up since and that Fei Fei plans to open another stall at a location in the west next year.

Well-known foodie Leslie Tay, who blogs about hawker fare at ieatishootipost.sg, felt it was unfair to expect successful food stalls to absorb the tax instead of passing it on to the customers.

He said, "From a foodie's perspective, we really shouldn't be complaining to the hawker. They shouldn't be penalised for doing well."

But Dr Tay was quick to note that the price difference could be "significant" for some customers. "Some will feel the pinch if prices are raised from say, $2 to $2.50."

He added: "There will always be stalls to cater to the price-sensitive crowds and others for those who are willing to spend a little more."

Dr Tay wondered if stall owners could reduce the price before tax to effect a smaller change in price after the GST is added.

"It sounds better to patrons when say, a bowl of noodles, costs $3 instead of $3.20.

"But if it does cut into the stall owners' profits, then I think it's not fair for customers to expect them to do that."

Alvin Lim

The New Paper

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