GST increase (July 2007)

• GST is billed based on period of utilization of service regardless of the date of billing/invoice
• In other words, for BB customers who are billed July 2007 subscription via the invoice that they will receive in mid July 2007, they will be billed 7% GST
• For DU customers, they will still be billed 5% GST for June 2007 subscription in the invoice that they will receive in July 2007
• A provision is made in the Act for the billing of services to be utilized in 2007 such that customers can still be billed 5% GST for these services only if the full payment of these services is made by 1 July 2007

• Our June 2007 invoice dated 30 June 2007 will instead be dated 1 July 2007. This will allow us to bill all advance billing customers (eg BB customers) 7% GST for their July 2007 subscriptions
• The change in the invoice date should be pretty much transparent to customers as they will still receive their bills round about the same time and be given the same number of days to pay.
• If a customer has both advance billing products (eg BB) and arrears billing/ back-billing products (eg DU) in one invoice, there will be 2 lines of GST (ie one 5% and another 7%)
• In the SOA, you will see one invoice dated 1 July 2007 and another dated 31 July 2007

FAQ

1. How would the GST rate change affect me?

   With effect from 1 July 2007, the GST rate will be increased from 5% to 7% for all goods and services. All GST-registered businesses will be affected by this change. As a result, the Pacnet services that you currently subscribed to will have their GST component increased accordingly.

   The GST transitional guidelines set down by the Inland Revenue Authority of Singapore (IRAS) state that any partial or full payment of advanced charges for the period before 30 June 2006 will be entitled to the 5% GST rate provided full payment for these services is made on or before 1 July 2007. However, the remaining unpaid portion will be subjected to the new GST rate of 7%.

   In order to minimize cumbersome accounting procedures that you may otherwise face in view of these transitional guidelines, we will be making interim changes to our billing process that will affect your bill statements during the transitional period of June 2007 and July 2007.

2. I am currently on a prepayment promotion scheme. Will I now need to pay for the GST rate increase since the prepayment period will expire only after 30 June 2007?

   If we have received your full prepayment amount for the prepayment promotion offer by 1 July 2007, you will be billed at the 5% GST rate.

3. Will Pacnet absorb the GST increase?

   We regret we will not be absorbing the increase in GST as this is a tax imposed by the government on the supply of goods and services performed in Singapore.

4. Do you charge me the increased GST based on when I consumed the service or by the date of your invoice?

   The GST is charged based on the period whereby the service is utilized regardless of when you receive your invoice. For instance, Dial-Up customers who are billed "in-arrears", (ie you receive the bill for the June 2007 subscription in July 2007), you will still pay 5% GST for the June 2007 subscription.

   For subscriptions for July 2007 onwards, all customers will pay 7% GST for the services they untilized.

5. If I buy a modem or any other item from you now to bring overseas next year, how many percent will my GST rebate be?

   If you purchase the item before 1 July 2007, you will be billed 5% GST. However, if you purchase the item after 1 July 2007, you will be billed 7% GST. The normal rules for tax rebates will apply in both cases.

6. How much GST do I pay if I use your Global Roaming service?

   If you are using our roaming service outside of Singapore, you will not be billed any GST. However, if you are using local roaming service, you will be billed 5% GST if the service is utilized before 1 July 2007 and 7% if the service is utilized after 1 July 2007.