GST vs Non-GST registered ID
Back when we were searching for IDs, most people would recommend the following must haves, which are
1) casetrust accredited 2) HDB registered
However most of their companies with these meant that they would be gst registered, meaning on top of what we’re paying, we have to pay an additional 9%! That’s a lot if you consider a 100k reno, you have to pay 9k extra. 🥲
To help reduce cost, some firms use another common “sister company” method. It’s a method that’s been in the industry for ages but not many have spoken about this. This method is main companies opening sister companies, keeping total earnings below 1 million to avoid the gst.
So what should you watch out for if your ID recommend this? And is it safe?
Some may think that “oh since my main ID is under case trust, their sister company can ensure the same”. However that’s wrong. One downside about this method is that the main company can easily just close this sister company any time. And the warranty provided by the sister company would cease. Meaning even if they gave 5 year warranty, and dissolve the company before your warranty is up, there’s nothing the consumer can do! You can’t bring it to the main company as the contract is not under their company’s name.
For casetrust accreditation, it is good to have but it’s honestly just something companies pay for.
Hearing from the many IDs we met, case trust accreditation would set the company back by 10k just for the certification. It’s not difficult to get, but firms would need effort to maintain.
One point to check is how old the accreditation was held for, if the casetrust accreditation is only 1 year, means they just got it, not sure if they can maintain it. But if the accreditation is long standing, means the company made significant effort to maintain it which strengthens the companies’ reliability! So do check that and not blindly see the accreditation thinking you’re safe!
HDB registered:
For HDB registered, some ID firms may not have it, meaning their contractors would have it. This is VERY IMPORTANT. If the ID firm is not hdb registered, you must check that their contractors have it!! Without it, they cannot legally work on your projects.
All in all, due diligence and research on the firm you want to sign with is still needed. And also most importantly how well you can trust your ID! While renovation costs are important, no matter the price, what matters most is how much you trust your ID and how well you work together.
If you have any questions, you can always drop a comment and we’ll be happy to help! ☺️
#hdbrenovation #renovationtips #interiordesigners #hdb #renojourney
When considering whether to choose a GST-registered interior designer or a non-GST sister company, it's essential to understand what a "sister concern" means in this context. Sister companies are legally separate entities created by a main GST-registered firm, often to operate under a revenue threshold that exempts them from GST. This setup can lower costs upfront since you avoid the additional 9% GST, which adds up quickly on projects. However, as someone who’s gone through renovation, I noticed the risk comes in the form of warranty and accountability. Since the contract is with the sister company, if they dissolve or shut down, your warranty may become void with no recourse to the main company. This could leave you unprotected if issues arise post-renovation. Another aspect worth noting is the importance of companies being HDB-registered, especially if you are renovating an HDB flat. If the firm you choose isn’t HDB-registered themselves, verify that their contractors are because legally, only HDB-registered firms or contractors can work on your project. Moreover, case trust accreditation is a useful indicator but not a guarantee of quality. It involves a cost to the company and requires ongoing effort to maintain. Check how long the company has held this accreditation, as a longer period suggests they value maintaining standards. Personally, I found that while the GST savings are tempting, the key is trusting your interior designer and having clear communication. Renovation projects often face hidden costs and unexpected changes; so, working with someone reliable and transparent is priceless. Always thoroughly research the firm, ask about their GST status, accreditation history, and ensure contracts clearly define warranty terms. To sum up, the choice isn’t always about paying less but about balancing cost with reliability and trust. You can save money by opting for a non-GST sister company, but only if you are comfortable with potential risks involving warranty and company stability.
