IRAS issues e-Tax Guide: “Claiming of GST on re-import of value-added goods”

On By taxsgIn Goods and Services Tax

12 December 2014

On 10 December 2014, the Inland Revenue Authority of Singapore (IRAS) issued an e-Tax Guide, “Claiming of GST on re-import of value-added goods”.

This e-Tax guide explains the qualifying conditions under which a GST-registered business is entitled to claim GST incurred on the re-import of goods previously sent overseas for value-added activities.

Businesses may send goods belonging to their local customers or GST-registered overseas customers abroad for value-added. Import GST would be incurred when the goods are subsequently re-imported into Singapore.

Prior to 1 January 2015, businesses are not entitled to recover the full import GST as their input tax unless the Comptroller of GST grants remission under s 89(1) of the GST Act.

Amendments have been made to the GST legislation to allow businesses to claim the full import GST from 1 January 2015, subject to the fulfillment of these qualifying conditions:

  • Value-added goods are re-imported within six months from the date the goods are sent overseas for value-added activities, or such longer period as the Comptroller may allow on a case-by-case basis;
  • Businesses must retain control over the goods from the time the customer consigns the goods and up to the point of delivery of the value-added goods back to the customer or to any other person as instructed by the customer;
  • Businesses must not be reimbursed for the GST incurred on the re-import of the value-added goods;
  • All the value-added activities performed by the overseas subcontractor, including the addition of any new goods must be based on instructions and provided for in a contract/ agreed scope of works with the customer;
  • Businesses must make an onward taxable supply of the value-added activities performed on the goods to the customer before ceasing business or deregistration from GST, whichever is earlier;
  • A GST payment permit must be held in the business’ name to substantiate the input tax claim. If the Major Exporter Scheme (MES), Import GST Deferment Scheme (IGDS), Approved Contract Manufacturer and Trader (ACMT) scheme as an ACMT Contract Manufacturer (ACMT CM) or Approved Refiner and Consolidator Scheme (ARCS) as an Approved Refiner have been granted, the import suspension/deferment privileges of the schemes can be used to re-import the value-added goods without paying GST. The import permit must reflect the business’ name as the importer of record; and
  • Any other conditions or restrictions as the Comptroller may impose from time to time or on a case-by-case basis must be complied with.

The e-Tax Guide also gives guidance on the consequences of failing to satisfy qualifying conditions, and of cessation of business or deregistration from GST as well as the reporting and record-keeping requirements and the recovery of GST on re-import of goods belonging to non-GST registered overseas customers.

For full details, please refer the e-Tax Guide on the IRAS website.

Source: This article was extracted from the Inland Revenue Authority of Singapore’s (IRAS) website. Visit http://www.iras.gov.sg/ for more information.