What GST changes in a dropshipping sale
GST can enter a gadget dropshipping transaction at more than one point. A Singapore GST-registered seller may charge GST on a taxable sale; IRAS states the current rate is 9%. For low-value goods, sales value S$400 or below imported into Singapore by air or post, a GST-registered overseas supplier charges GST at purchase, according to IRAS. Supplier invoices or import documents may show separate amounts; do not assume every order contains all charges or that customer-facing GST covers import tax.
For profitability reporting, separate GST collected from revenue and track product, shipping, platform, payment and import tax or duty separately. Whether GST on supplier or import documents belongs in the cost base depends on the applicable treatment and your registration position. Apply that treatment consistently, so GST is not mistaken for profit or recoverable tax treated as a permanent cost; transaction documents should support it.
What the tax does to your price
For a GST-registered seller, the customer’s cash payment can be higher than the sale revenue the business retains. The Inland Revenue Authority of Singapore states that the current GST rate in Singapore is 9%. For illustration only, if a gadget’s pre-GST selling amount is S$100, the customer pays S$109. The S$9 collected is tax, not product revenue; it is held for GST reporting and payment, subject to the applicable input-tax rules (Source: Inland Revenue Authority of Singapore).
The other deductions are commercial costs, not GST: the supplier’s product cost, the payment processor’s fee and operating expenses such as software or support. In the example below, the seller has S$32 left after those costs, before any other adjustments. Use a product pricing calculator to test your own figures rather than treating collected GST as margin.
| Line item | Amount (S$) | Classification |
|---|---|---|
| Customer payment | 109 | Cash received |
| GST collected | −9 | Tax collected, not revenue |
| Product cost | −55 | Supplier or fulfilment cost |
| Payment fee | −3 | Transaction expense |
| Operating expenses | −10 | Business expense |
| Amount remaining | 32 | After listed costs |
Worked example with sample numbers
This example is illustrative. It uses sample numbers for a dropshipping gadgets store selling in Singapore. They are made up to show the method, they are not a benchmark, and your own figures will differ.
Formula: Tax inside an inclusive price = price - price / (1 + tax rate).
| Approach | Customer sees | Tax inside | You keep before costs |
|---|---|---|---|
| Tax included in the price | S$46.99 | S$3.88 | S$43.11 |
| Tax added at checkout | S$51.22 | S$4.23 | S$46.99 |
Run the same sum with your own numbers in the free calculator, or browse guides for sellers in Singapore and more dropshipping gadgets guides.
General information only: tax, duty and import rules change and depend on your situation, so check with an accountant or the official source before acting.
Eligible Shopify stores can see these numbers for their own store through the Founding 10,000 offer.
Inclusive and exclusive prices
GST-inclusive pricing is the customer’s payment: divide by 1.09 for the pre-GST value, or multiply by 9/109 for the GST. Singapore’s current GST rate is 9%, according to the Inland Revenue Authority of Singapore (IRAS) (Source: Inland Revenue Authority of Singapore).
GST-exclusive pricing states the pre-GST sale value; add 9% GST to calculate the total payment. In the separate worked example, “before GST” means the seller’s pre-GST price; “including GST” means the customer’s total, from which embedded GST is split (Source: Inland Revenue Authority of Singapore).
Inclusive pricing shows the checkout amount; exclusive pricing shows the taxable sale before GST. Neither is universally required. Keep product pages, checkout, invoices and margin analysis on one basis, and do not add GST again to an inclusive figure.
| Price basis | What the figure means | Calculation |
|---|---|---|
| GST included | Customer’s total payment | Pre-GST value = total ÷ 1.09; GST = total × 9/109 |
| Before GST | Taxable sale value before GST | GST = stated value × 9%; customer total = stated value × 1.09 |
A margin view for dropshipped gadgets
Read the worked example as a margin bridge, not a cash-receipts report. At Singapore’s current 9% GST rate (IRAS), the S$109 customer payment contains S$9 GST, leaving S$100 of sale revenue before costs. Supplier charge, shipping and platform costs reduce the amount available for advertising, refunds and profit. Selling price is the customer-facing measure; use it to check competitiveness. Pre-GST revenue is the cleaner measure for product economics. Contribution margin shows what remains after listed fulfilment and selling costs: the figure to use before deciding how much advertising the gadget can support. It is not net profit; advertising, overheads and other adjustments remain outside this bridge. For a store with many products, ORVX can show contribution after advertising and product-level profitability, rather than revenue alone. Before changing a listing price, see the product pricing calculator (Source: Inland Revenue Authority of Singapore).
| Line item | Amount (S$) | What it measures |
|---|---|---|
| Selling price, GST-inclusive | 109 | Customer cash payment |
| GST included | (9) | Tax component of the payment |
| Sale revenue before GST | 100 | Amount available to cover costs |
| Supplier charge | (45) | Product cost |
| Shipping | (8) | Delivery cost |
| Platform costs | (3) | Selling and payment costs |
| Contribution margin | 44 | Revenue remaining after listed costs |
Records worth keeping
Keep records that connect each gadget order from sale to settlement. A payment record proves money moved; an invoice or receipt shows what was sold and the GST treatment; an import or delivery document supports how the goods reached the customer. These documents serve different purposes, so one should not substitute for the others.
- Sales documents: customer invoices or receipts, order date, SKU, quantity, destination, price basis and GST amount.
- Order records: Shopify order details, fulfilment status, cancellations, returns, customer-paid shipping and any discounts.
- Cost and movement documents: supplier invoices, shipping charges, tracking or delivery evidence, customs or import documents, and records showing GST charged at import or purchase where relevant.
- Payment records: payment-gateway settlements, bank receipts, supplier payments, fees, refunds, credit notes and chargebacks.
- Calculation support: worksheets linking each order to revenue, costs, GST calculations, refund value and the final amount used in management or GST reporting.
| Measure or record | Use it when checking |
|---|---|
| Invoice or receipt | What was sold and what GST was charged |
| Payment or settlement record | Whether and when cash was received or paid |
| Import or delivery document | How the goods moved and which delivery or import event supports the transaction |
When to ask an adviser
Ask a Singapore tax adviser when GST treatment depends on legal classification, not order total. Confirm registration: IRAS says a Singapore business must register when its taxable turnover for a calendar year exceeds $1 million, or when it expects taxable turnover of more than $1 million in the next 12 months. The IRAS GST registration guidance/gst-registration-deregistration/do-i-need-to-register-for-gst) is the relevant source.
Get advice on whether each sale is a Singapore taxable supply, how customer location and direct overseas shipping affect treatment, and whether low-value-goods rules apply. IRAS defines these as goods with a sales value of S$400 or below imported into Singapore by air or post; a GST-registered overseas supplier charges GST at purchase. Also review refunds, cancellations, bundles, platform fees and invoice wording.
ORVX calculates realized revenue from delivered orders only, reports refund value against revenue, and computes profitability from your numbers. It cannot determine tax treatment, file GST returns or confirm invoice wording. Apply the adviser’s rule, then measure its effect on products, customers and margins.
For a dropshipping gadget store, GST should be considered separately from the product’s purchase cost and the store’s operating expenses. Use the worked example to trace how each amount moves from customer price to tax and margin, keep records that support those figures, and confirm the treatment of your actual supply chain with a qualified Singapore tax adviser.
Sources
- Current GST rates (Inland Revenue Authority of Singapore, checked 26 October 2026).
- Do I need to register for GST (Inland Revenue Authority of Singapore, checked 26 October 2026).
- GST on imported low-value goods (Inland Revenue Authority of Singapore, checked 26 October 2026).
How this page was made: drafted with AI from a brief, then checked by automated rules for arithmetic, sources and duplication. The sample numbers were calculated, not reported.