In a litigation case where party-to-party costs are awarded by the court, and a party to the case has to pay costs to the other party, is GST chargeable on those costs?

In the case of Chan Wai Leen v Ho Dat Khoon [2024] SGHC(A) 24, this question was considered by the court which expressed reservations as to whether GST should even apply to those costs, since there was no “service” rendered to the paying party. However, since the paying party did not challenge whether GST should apply, and only questioned which GST rate (7% or 8%) should apply, the court did not express any views on this issue.

Contrary to common belief, GST is not a simple tax. It is indeed questionable whether GST should apply in this particular case. Given that it is part of an order of court, will there be any recourse if GST is indeed charged wrongly in this particular instance?

K E Wee & Associates provides GST services including advisory, preparation of GST returns and review of GST returns.

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Wee Kong Eng
Public Accountant, Tax & GST Consultant
Master of Taxation, CA (Singapore), CIA, Dip. in Law, ATP (Income tax & GST), Assoc CVA
K E Wee & Associates PAC, Public Accountants and Chartered Accountants
Email: kongeng@kewee.com.sg
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