Goods and Services Tax
Introduction to Import GST Deferment Scheme (IGDS)
Content
1. Import GST Deferment Scheme (IGDS)
–
Introduction
–
Qualifying Conditions
–
Responsibilities of IGDS Business
–
Differences between IGDS and MES
–
Misuse of Scheme
–
Application Process
–
Where to get more information?
Page 2
Introduction
Current Situation
 Import GST is collected by Singapore Customs (SC) on all goods
imported into Singapore, except where:
– Relief has been granted under the GST (Imports Relief) Order; or
– Importer is under an import GST suspension scheme (e.g. Major Exporter
Scheme)
 Business without any GST schemes will need to pay GST upon
importation and can only claim back at the time when it files its GST return
At point of
importation (1 Oct)
• Pay import GST
to SC
End of GST period
(31 Oct)
• Prepare GST
return
Submission of GST
return (30 Nov)
• Make input tax
claims for import
GST
Time lapse between payment of import GST and
claiming it back as input tax
Page 3
Introduction
 Import GST Deferment Scheme (IGDS)
– In Budget 2010, IGDS was introduced with the aim to help GST-registered
businesses which suffer tighter cash flow as a result of importing goods.
– Payment of import GST is being deferred from the time of importation to the
filing of GST return. This allows importers a credit period of 1 to 2 months,
similar to what businesses enjoy for their local purchases.
– Takes effect from 1 October 2010
– Approved businesses will be able to enjoy IGDS status for a period of 3 years
till next review
At point of
importation (1 Oct)
• Need not pay
import GST
upfront to SC
End of GST period
(31 Oct)
• Prepare GST
return
Cash flow eased
Submission of GST
return (30 Nov)
• Pay deferred
import GST to
IRAS
• Make input tax
claims for import
GST
Page 4
Introduction
GST Reporting
Approval date on
permit:
12 October 2010
Declared in GST
return for period:
1 October to 31
October 2010
Import GST Deferred
Importation of Goods
Eligible for Input Tax
Claims
IGDS Section
“Total Value of Goods
Imported under
IGDS”
Box 5
“Total Value of
Taxable Purchases”
IGDS Section
“Deferred Import GST
Payable”
Box 7
“Input tax and refunds
claimed”
Page 5
Introduction
Numerical Comparison:
1 October 2010
Start of GST Accounting Period
12 October 2010
Import goods with import GST amounting to $10,000
Normal Rules
Pay import GST of $10,000
upfront to SC
IGDS
Need not pay import GST of
$10,000 to SC
20 October 2010
Sell goods with output tax amounting to $15,000
30 Nov 2010
GST Reporting and Payment
Normal Rules
IGDS
Box 6: Account $15,000
output tax
Box 7: Claim $10,000 input
tax
Box 6: Account $15,000
output tax
Box 7: Claim $10,000 input
tax
Pay $5,000 net GST
Pay $5,000 net GST before
GST deferment
New Box: Account $10,000
deferred import GST
31 October 2010
End of GST Accounting Period
Normal Rules
Pay $5,000 to IRAS
Pay $15,000 net GST
IGDS
Pay $15,000 to IRAS
Page 6
Introduction
 Scope of IGDS
– To import goods in the course or furtherance of your business
– To import goods belonging to an overseas principal for sale in Singapore or reexport in the capacity of a GST agent (i.e. Section 33(2) or Section 33(A) agent)
– IGDS will apply to both dutiable and non-dutiable overseas goods under the
following circumstances:
• Direct imports
• Imports released from Zero-GST/Licensed warehouses into local market
– Not applicable to customs or excise duties
Page 7
Qualifying Conditions
GST-registered for at least 3 years
• Letter of guarantee (GST-registered < 3 years)
Business is active and solvent
• Not under bankruptcy, liquidation, receivership or judicial management
Have been importing or will be importing goods for
business purposes
Under monthly GST accounting period
Active GIRO account with IRAS for GST payment
• Deduction will be made on the 15th day of the month after the due date for
payment
Good compliance records with Singapore Customs
• No major violation of Singapore Customs’ regulations and requirements
Page 8
Qualifying Conditions
Good compliance records with IRAS
•
•
•
•
Good history of payment for GST and other taxes
Prompt submission of GST returns
No overdue GST and other taxes
No overdue GST returns
Good internal controls and proper accounting records
Complete Assisted Self-help Kit (ASK)
 As safeguard against risks:
– May impose letter of guarantee prior to approval or during the validity period of
the scheme; or
– Reject application
Page 9
Responsibilities of IGDS Business
 Satisfy all qualifying conditions at all times
– IGDS may be revoked at any time if any of the qualifying conditions is not met
• Once revoked, business is to make immediate arrangements with Singapore
Customs for the payment of import GST on subsequent importations
 If there are material changes in the nature of your business such that you
no longer meet the qualifying conditions, you are to notify IRAS
immediately.
 Value of imports must be reported promptly and accurately in GST return
– Valid permits and relevant supporting documents must be maintained for 5
years
 IGDS status is not transferable
Page 10
Responsibilities of IGDS Business
 Operational Procedures
– Clear goods at importation with the relevant permits
• TradeNet user and registered with Singapore Customs
• Appoint authorised declaring agent
– Online Declaration of Agents via myTax Portal
– Maximum of 20 authorised declaring agents
Page 11
Differences between IGDS and MES
IGDS
Target Group
MES
Importers
Major exporters
Has been importing or
will be importing goods
with good compliance
records with SC and
IRAS
Zero-rated supplies >
50% of total supplies
or
Value of zero-rated
supplies > S$10 million
for past 12 months
Payment of Import
GST
Deferred until the
Suspended, does not
submission of GST
apply to dutiable goods
return, applies to dutiable
goods
Major
Requirements
1. Monthly GST reporting
2. GIRO payment
3. Complete ASK
Submit Positive
Assurance Report
Page 12
Misuse of Scheme
 Late payment penalties
– Late submission of GST returns
– Late payment in accounting for deferred import GST
 Import goods that are not for the purpose of your business or under any
other permissible situations constitute an offence
– Re-pay the amount of GST that has been deferred in an unauthorised manner
– IGDS status revoked
– Possible imposition of penalties and criminal prosecution
Page 13
Application Process
 To apply for IGDS status, you are required to submit the following
documents:
1. A duly completed and signed application form GST F22
• Review Section 1 (GST Practices) and Section 2 (Pre-filing Checklist) of ASK
2. A duly completed "ASK: Declaration Form on Completing Annual Review &
Voluntary Disclosure of Errors"
• Review Section 3 of ASK (i.e. Carry out self-review of GST returns filed in
past financial year)
 Application form GST F22 can be downloaded from www.iras.gov.sg >
Quick Links > Tax forms > GST
Page 14
Application Process
 Successful applications
– Notified by the Comptroller of GST in writing
– IGDS status is valid for 3 years
– Any other prior approved GST schemes relating solely to imports will be
terminated
Page 15
Application Process
Applications made before
1 April 2011
Submitted Section 3 of ASK
(i.e. Annual Review)?
Yes
No
IGDS status will
be valid for a
period of 3
years
Interim 1-year
IGDS status will
be granted
Submit ASK Declaration Form within 1
year of successful interim IGDS?
No
IGDS status will be terminated
Yes
IGDS status extended for another 2 years
Page 16
Where to get more information?
TradeNet® Declarations for IGDS:
 Singapore Customs’ circular on TradeNet® declaration procedures for
IGDS. The circular will cover the following areas:
– Application for IGDS TradeNet® Permits (for import GST to be deferred with
Singapore Customs)
– Rectification of erroneous declarations for IGDS permits (under-declaration or
over-declaration of the import value in IGDS permit)
General information on IGDS:
 IRAS e-Tax Guide on IGDS
Page 17