The Inland Revenue Authority of Singapore (IRAS) has released guidance on the Goods and Services Tax (GST) treatment of deposits collected under the Beverage Container Return Scheme (BCRS), confirming that the deposit is not subject to GST. With the BCRS taking effect on 1 April 2026, GST-registered suppliers of regulated beverages should assess the implications for pricing, invoicing and system configurations.
Background
The BCRS is part of Singapore’s broader environmental sustainability initiatives and is administered by BCRS Ltd, appointed by the National Environmental Agency (NEA).
From 1 April 2026:
- A refundable deposit of SGD 0.10 must be charged on each regulated beverage container sold;
- Regulated beverages are those pre-packaged in plastic and metal containers ranging from 150 millitres and 3 litres; and
- Consumers may return empty containers at designed return points to recover the deposit.
GST Treatment of BCRS Deposits
IRAS has clarified that the SGD 0.10 BCRS deposit is not subject to GST, as it represents a refundable amount rather than consideration for a supply. GST continues to apply to the sale of the beverage at the prevailing rate. For example, if a beverage is sold for SGD 2:
- Beverage price: SGD 2
- BCRS deposit (not subject to GST): SGD 0.10
- GST (9% on SGD 2) amount: SGD 0.18
- Total payable: SGD 2.28
Businesses must ensure that GST is computed solely on the beverage price. The deposit must not be included in the GST-taxable amount.
Invoicing Requirements
Although the BCRS deposit is not subject to GST and does not need to appear on a tax invoice, IRAS encourages pricing transparency. Businesses may adopt one of the following approaches:
- Include the BCRS deposit in the same invoice or receipt as the beverage sale, clearly identified and marked as not subject to GST;
- Issue a separate document for the deposit; or
- Exclude the deposit from the tax invoice, while issuing a compliant invoice for the beverage supply.
Where the deposit is reflected on a tax invoice or simplified tax invoice, it must:
- Be clearly described as a BCRS deposit.
- Be stated separately from the beverage price; and
- Indicate that the amount is not subject to GST.
Practical Considerations
GST-registered suppliers of regulated beverages should:
- Update point-of-sale and accounting systems to segregate taxable and non-taxable components;
- Review invoice templates to ensure compliance with GST invoicing rules;
- Validate GST reporting configurations to prevent over-declaration of output tax; and
- Train finance and operational teams on the correct treatment of the deposit.
BDO Perspective
Singapore’s BCRS underscores the country’s commitment to sustainability and circular economy principles. Beyond its environmental objectives, the scheme introduces important GST and operational considerations. While the BCRS deposit itself falls outside the scope of GST, system and process readiness is critical. Incorrect system configuration may lead to:
- Over-collection of GST from customers;
- Over-reporting of output tax in GST returns; and
- Reconciliation and compliance challenges.
A proactive assessment of invoicing practices, system design and reporting logic, supported by system testing and internal validation, will help businesses achieve compliance and operational readiness for the new BCRS scheme.