26 October 2012

On 23 October 2012, the Inland Revenue Authority of Singapore (IRAS) issued an updated e-Tax Guide, “GST: Specialised Warehouse Scheme and Zero-rating of Supplies (Second Edition)”

The Specialised Warehouse Scheme (“SWS”) had been announced in Budget 2011 for warehouses that are used for providing specialised storage facilities to overseas persons, and where most of the goods stored will eventually be exported (the warehouses under SWS are referred to as “Approved Specialised Warehouses”).

The purpose of SWS is to facilitate zero-rating relief on the following supplies to overseas persons:

• Qualifying services performed on qualifying goods stored in an Approved Specialised Warehouse (the qualifying services can be performed by the operator of the Approved Specialised Warehouse or other GST-registered businesses); and
• Lease/tenancy/licence to occupy a storage space in an Approved Specialised Warehouse (only where such a supply of storage space is made by the operator of an Approved Specialised Warehouse).

Only warehouses that store certain categories of goods are eligible for the SWS, and only supplies related to such goods may qualify for the zero-rating relief. The categories of goods are:

• a work of art
• an antique
• an artefact
• a collector’s item
• a precious metal (gold, silver, palladium, platinum)
• a precious stone (diamond, ruby, sapphire, emerald)
• jewellery, and
• wine.

From 1 October 2011 to 31 December 2011, the changes took effect by way of Ministerial remission. To give legislative effect to these changes, the following amendments to the Goods and Services Tax Act (GST Act) and its subsidiary legislation have been made with effect from 1 January 2012:

• Specialised Warehouse Scheme (section 21(7A) of the GST Act and Regulation 106B of the GST (General) Regulations)
• Zero-rating of qualifying services performed on qualifying goods stored in an Approved  Specialised Warehouse (section 21(3)(y) of the GST Act, Paragraph 10 and Ninth Schedule of GST (International Services) Order
• Zero-rating of lease/ tenancy/ licence to occupy a storage space in an Approved Specialised Warehouse (section 21C of the GST Act).

Certain paragraphs in this second edition of the e-Tax Guide have been updated for these legislative amendments.

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