Customs duty and import GST are two separate charges in Singapore, and most imports pay only the second one. Duty applies to just four groups of goods. GST applies to nearly everything else that comes in. This guide shows how each charge works, how GST on imports is worked out, and which permits a buyer should expect.
Which goods carry customs duty
Singapore Customs lists four groups of dutiable goods: intoxicating liquors, tobacco products, motor vehicles and petroleum products. Everything else is non-dutiable. A non-dutiable shipment pays no customs duty at all. Electronics, machinery, clothing, food and office supplies all fall in this group.
Duty is charged in one of two ways. An ad valorem rate is a percentage of the customs value of the goods. A specific rate is a fixed amount for each unit of weight or quantity. Customs publishes the rate for each dutiable item, so check the list before you quote a landed cost.
How GST on imports is worked out
GST is charged on top of the value of the goods, and it is assessed by Singapore Customs when the goods enter. The taxable value is the CIF value, plus any duty payable, plus commission and other incidental charges. CIF means cost, insurance and freight, so it covers the price of the goods and the cost of getting them to Singapore.
The standard GST rate today is 7%. The Government announced in Budget 2022 that it will rise in two steps: to 8% on 1 January next year, and to 9% a year after that. If your goods arrive after the first step, plan on the higher rate.
Here is a simple example at today's rate. Goods cost S$10,000. Freight and insurance add S$2,000, so the CIF value is S$12,000. Customs duty adds S$3,600, so the taxable value is S$15,600. GST at 7% is S$1,092. Duty is included in the GST base, so dutiable goods pay GST on the duty as well.
Small parcels and the S$400 relief
There is a relief for low-value goods that come by air or post. If the CIF value is S$400 or less, no GST is payable. This relief does not cover liquor or tobacco. If the value is over S$400, GST applies to the full value, not just the part above S$400.
Goods that arrive by sea or land get no such relief, whatever the value. A buyer who ships a small crate by sea should still budget for GST.
This relief is ending soon. IRAS says GST will apply to low-value goods of S$400 or less from GST-registered overseas sellers from 1 January next year. In those cases the seller charges GST at the point of sale.
Permits and paperwork to expect
Imports are declared to Singapore Customs through a permit, which is filed on the TradeNet system. Each permit has a declaration type. The most common are the GST permit, for non-dutiable goods that stay in Singapore, and the DNG permit, for dutiable goods where duty and GST are paid. Other types suspend or exempt the charges, for example for goods going into a free trade zone, or goods that come in only for a trade fair or for repair.
Before you apply, work out four things: whether the goods are dutiable, non-dutiable or controlled; where the goods are going; whether a special scheme applies; and whether you have your supporting papers. Those papers are the supplier invoice, the bill of lading or air waybill, and the packing list.
Some low-risk imports need no permit. Examples are trade samples and gifts up to S$400, but gifts exclude liquor and tobacco. Controlled goods, such as items that need approval from another government agency, have extra requirements on top of the Customs permit.
Ways a GST-registered business can ease the cost
A business that is registered for GST can usually claim import GST back as input tax. You must be named as the importer on the permit, and you must meet the usual conditions for claiming. You report the import in your GST return, using the amount shown on the permit.
Cash flow is the bigger issue, because import GST is due when the goods clear. Two schemes help. Under the Import GST Deferment Scheme, approved businesses defer the payment until their GST return is due. Under the Major Exporter Scheme, approved businesses can bring in non-dutiable goods with GST suspended, and they pay only when the goods leave an approved warehouse for local use. Both need approval from IRAS first.
A quick checklist before you buy
- Check if your goods are one of the four dutiable groups.
- Find the CIF value, then add any duty to get the GST base.
- Use 7% now, and 8% for goods arriving from 1 January next year.
- Pick the right permit type with your freight agent.
- If you are GST-registered, make sure your name is on the permit.
This is general information only. Import GST rates and customs rules can change, so confirm your own case with IRAS and Singapore Customs, or a licensed customs broker, before you ship.