GST SCHEMES – IMPORTER & EXPORTER
An import export business is a company that facilitates trades of goods and commodities between domestic and foreign companies. In other words, it’s a company that buys goods internationally and ships them in for domestic purchases and vice versa. All importers and exporters are required to activate their account with the Singapore Customs before they can import/export goods in and out of Singapore. Account activation is processed within 1-2 working days after submission of the application and you will be issued a Customs approval letter and is valid for as long as your company exists. For import of all goods (including controlled and non-controlled items) into Singapore, you are required to obtain an IN Permit, before goods are imported into Singapore. For export of all goods (including controlled and non-controlled items) out of Singapore, you are required to obtain an OUT Permit .Goods imported into Singapore are subject to Goods and Services Act at 7%. Goods and services Tax is levied on all supplies of goods and services in Singapore as well as importation of goods into Singapore. GST is paid whenever customers buy taxable goods or services from GST-registered businesses. The suppliers effectively act as GST collection agents.
Output tax is the GST that is charged and collected by GST-registered businesses from their customers and is to be paid to IRAS. Input tax is the GST that businesses incurred on their purchases from GST-registered suppliers or when they import goods into Singapore. GST-registered businesses can claim the input tax if they are able to satisfy the input tax claiming conditions. If the net GST amount is positive it is payable to the Government, if it is negative it is refundable to you by IRAS.
GST on the Importation of Goods into Singapore
GST is chargeable on all the imported goods irrespective of whether the importer is registered or not.GST is charged on the value of the goods with all the duties payable. Import is not chargeable under the following cases;
- Importation of investment precious metals
- Importation of goods that are specifically given GST reliefs
- Importation of goods into Zero-GST/Licensed warehouses administered by Singapore Customs
- Importation of goods by GST-registered businesses that are under Major Exporter Scheme or other approved schemes
If the imported goods are kept in the Free Trade Zones, they are not treated as having been imported into Singapore and therefore import GST will not be charged.
If import GST is charged and you are a taxable person, you may recover the import GST in your GST F5 return provided all the conditions for claiming of tax are met
If you have over-declared the value of your imported goods and GST has been overpaid, you can claim the higher amount of the GST paid as input tax from IRAS.
If you have under-declared the value of your imported goods and GST has been short-paid, you must take up a supplementary payment permit to make good the shortfall. The supplementary payment permit will be used as a proof for input tax claim.
As a registered person, you may import and supply goods on behalf of a non- registered overseas company as an agent.
The following are the mistakes in Import Declarations;
Over-Declared Value of Imports and on ME permit.
If the value of imports is over declared, it should be declared in the GST return.
IF the value has been over declared on the ME permit, the ME permit need not be cancelled, you just need to declare it in the GST return.
Under-Declared Value of Imports or Quantity on Exemption
If you have under-declared the value of imports and under-paid GST, you need to pay the additional GST to Singapore Customs by taking up a short payment permit. The short payment permit acts as documentary evidence for your input tax claim. If you have under-declared the value or quantity of IPM imports in your exemption permit, you need to take up another exemption permit to declare the short-fall in the value or quantity
Wrong Importer’s Name on Import Permit
If you have declared the wrong importer’s name in the import permit, you may recover the GST that had been paid from Singapore Customs and another import permit with the correct importer’s name should be submitted.
Wrong Importer’s Name on Exemption Permit
If a wrong importer’s name has been declared, another exemption permit needs to be submitted with the correct name.
Erroneous Payment of GST for Import of Investment Precious Metals
If GST has been paid incorrectly against the Investment Precious Metals, a refund can be sort from the IRAS and supporting documents need to be submitted to prove that the imports are Investment Precious Metals.
Erroneous Use of ME permit for Import of Investment Precious Metals (New!)
If an exemption permit for IPM has been taken by mistake, it is required to be reported to the Singapore Customs and necessary adjustments need to be made in the GST return. It is required to maintain a copy of your correspondence with Singapore Customs as part of the record keeping requirements for GST purposes.
You can import goods without paying GST if you are under the following are the GST Schemes- Importer & Exporter
Major Exporter Scheme (MES)
Major Exporter Scheme is a scheme which enables easy cash flow of the business that have substantial import and export of goods. If you have been approved to use the MES, the payment of GST is suspended at the point of importation of goods. To be eligible, your zero-rated supplies must account for more than 50% of the total supplies, or the value of your zero-rated supplies is more than S$10 million for the past 12 months. The relevant period for calculating the value of supply will be the immediate past financial year or any 12 continuous calendar months within the past 18 calendar months. Total supplies refer to the total of standard rated supplies, zero rated supplies and exempt supplies.
The scheme is to be applied by submitting a Form GST F10. A letter of guarantee may be required for the granting of MES where the Comptroller of GST thinks fit. You will be notified in writing if a letter of guarantee is required. A self Review needs to be performed, (ASK- Assissted Self Help Kit) and submit the declaration form.
The application will be valid till it is notified in writing by IRAS. The term usually given is three years. If at any point of time, the comptroller feels that the conditions are not satisfied , the status can be revoked.
Tourist Refund Scheme
Under the Tourist Refund Scheme, the tourist may receive a refund of GST paid on goods purchased fro
m retailers who participate in the scheme. The tourist refund is only available to tourists who are bringing their purchase out of Singapore via Changi International Airport or Seletar Airport within two months from the date of purchase, subject to the eligibility and conditions of the scheme.
Approved Third Party Logistics (3PL) Company Scheme
It helps in easing the cash flow of the logistic company.This scheme enhances the competitiveness of logistics companies that provide services to overseas clients who use Singapore as a logistics hub. A company under this scheme enjoys import GST suspension on goods imported.
Import GST Deferment Scheme (IGDS)
Under this Scheme, the GST registered Bussinessman can reschedule their import GST payments till their monthly GST returns are due. As the Import payment on the GST can be rescheduled, businessman mainly importers enjoy a credit period of one or two months which helps in easing their cash flow.
Zero GST Warehouse Scheme
The Zero GST Warehouse Scheme is administered by Singapore Customs.Under this scheme, you can import non-dutiable overseas goods into the ZG Warehouse with GST suspended. GST is only charged when the goods are removed from the warehouse for the local market.
Specialised Warehouse Scheme (SWS)
The Specialised Warehouse Scheme (SWS) is for warehouses that are used for providing specialised storage facilities to overseas persons and most of the goods stored will eventually be exported. A warehouse approved under SWS is known as an “Approved Specialised Warehouse” (ASW). Under the scheme, qualifying services performed on qualifying goods and storage facilities can be zero-rated.
Hand-Carried Exports Scheme (HCES)
The Hand-Carried Exports Scheme (HCES) is applicable if you wish to zerorate your supply to overseas customers for goods hand-carried out of Singapore via Changi International Airport. Unlike Tourist Refund Scheme which is only for bona fide tourist, HCES is for sales to an overseas company.
Various schemes have been introduced which will help companies voluntarily going for GST registration.
Schemes such as Goods and Services Tax Assistance Scheme, Third Party Logistics Scheme, Hand Carried Exports Scheme & Zero-GST Warehouse Scheme allow the small & medium sized enterprises (SMEs) to avoid paying GST tax. GST registration Singapore enable SMEs to be recognized as established entities which positively impacts its business, investors, shareholders and public at large. The overall costs of doing business are reduced, since the businesses can actually claim their GST which they paid to the suppliers.
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