GST Exemption Schemes in Singapore

Cash Accounting Scheme

This is designed to alleviate the cash flow of small businesses whose annual sales do not exceed S$1 million. Under the Cash Accounting Scheme, you account for output tax upon receipt of payment from your customers, thus easing your cash-flow. When you claim your input tax, you do so only upon payment to your suppliers. The scheme also has the benefit of easing compliance as businesses on the scheme only need to keep track of when they receive and make payment for their GST reporting.

Discounted Sale Price Scheme

Under the Discounted Sale Price Scheme, you can charge GST on 50% of the selling price when you sell a second-hand / used vehicle. 

Gross Margin Scheme

Second-Hand dealers who purchased goods free of GST may use the Gross Margin Scheme to charge and account for GST. Under the Gross Margin Scheme, GST is accounted for on the gross margin instead of full value of the goods supplied.

Hand-Carried Exports Scheme (HCES)

Effective April 1, 2009, the Hand-Carried Exports Scheme (HCES) is applicable if you wish to zero-rate your supplies to overseas customers for goods hand-carried out of Singapore via Changi International Airport. Do note that HCES does not apply to goods hand-carried out of Singapore by sea, land; or the Seletar Airport.

Import GST Deferment Scheme (IGDS)

Under IGDS, approved GST-registered businesses pay GST on imports payments when their monthly GST returns are due instead of at the point of importation. It aims to ease the import GST cash flow arising from the time lapse between the payment of import GST and the claiming of import GST for GST-registered businesses.

Major Exporter Scheme (MES)

Under MES, GST on non-dutiable goods is suspended at the point of import and also when the goods are removed from Zero GST warehouses. It is designed to ease the cash flow of businesses that import and export goods substantially.

Under normal rules, the businesses have to pay GST upfront on imports and subsequently obtain a refund from IRAS after submission of their GST returns. This can create cash flow problems for businesses that export goods substantially as no GST is collected from the zero-rated supplies to set-off their initial cash outflow on imports.

Businesses granted the MES are able to import non-dutiable goods with GST suspended. Effective from 1 Jul 2006, such businesses also enjoy GST suspension on goods removed from a Zero GST warehouse.

Zero GST (ZG) Warehouse Scheme

The Zero GST (ZG) Warehouse Scheme is administered by Singapore Customs. Under this scheme, import GST on non-dutiable overseas goods is suspended when the goods are moved into a ZG warehouse. GST is payable only when the imported goods leave the warehouse and enter the local market. Please do note that under ZG Warehouse Scheme, you must declare goods imported into the ZG warehouse despite the suspension of GST.

To get clarity on all the schemes you can take advantage of when it comes to GST, consult a GST services provider in Singapore.

Approved Contract Manufacturer and Trader (ACMT) Scheme

Contract manufacturers and traders under this scheme are relieved of the need to account for GST on value-added activities supplied to non-GST registered overseas customers. The ACMT Scheme is a scheme designed to relieve businesses (e.g. local contract manufacturers) that have substantial business with non-GST registered overseas customers of the need to factor in GST on value-added activities performed on the goods of such customers.

The scheme is currently available to contract manufacturers in:

• Semi-conductor industry;
• Printing industry; and
• Biomedical industry – Active Pharmaceutical Ingredients (APIs) manufacturing.

Contract manufacturers in other business segments in the biomedical industry will be considered for the ACMT scheme on a case-by-case basis.

Approved Import GST Suspension Scheme (AISS) for the Aerospace industry

Under AISS, GST-registered businesses in the aerospace industry enjoy added import GST suspension benefits for qualifying aircraft parts. It is designed to alleviate the cash flow of businesses in the aerospace industry. These businesses are:

• International airlines;
• Players in the Maintenance, Repair and Overhaul (MRO) industry;
• Original Equipment Manufacturers (OEM); and
• Distributors of qualifying aircraft parts.

Approved Marine Customer Scheme (AMCS)

Under AMCS, GST-registered businesses enjoy zero-rating on purchases or rental of goods and repair or maintenance services on ship parts or components under qualifying conditions. It is designed to ease compliance for ship owners and ship managers procuring goods for use or installation on internationally bound commercial ships.

Approved Marine Fuel Trader (MFT) Scheme

Under MFT Scheme, approved businesses need not pay GST when making local purchases of approved marine fuel oil from any GST-registered suppliers. It is designed to benefit qualifying businesses in the bunkering industry that make local purchases of approved marine fuel oil (“MFO”). GST registered businesses approved under the Approved Marine Fuel Trader (MFT) Scheme need not pay GST on local purchases of approved marine fuel oil (e.g. MFO 380cst) from any GST-registered suppliers. This eases the cash flow difficulties of the approved businesses by eliminating the need to pay GST upfront and to subsequently claim it back by obtaining a refund from IRAS.

Approved Refiner and Consolidator Scheme (ARCS)

Under this scheme, Approved Refiners and Approved Consolidators enjoy certain benefits including GST suspension on qualifying imports and additional input tax benefits. It is designed to ease cash flow and compliance of qualifying refiners and consolidators of investment precious metals (IPM) in their payment of GST on import and purchase of raw materials and relieve input tax incurred on refining activities. Under the scheme, you may be approved as either an Approved Refiner or Approved Consolidator.

Approved Third Party Logistics (3PL) Company Scheme

Under this scheme, approved logistics companies that provide logistics management services to overseas clients do not need to pay import GST or charge GST on the supplies of their overseas clients’ goods under certain circumstances. It is designed to increase the competitiveness of logistics companies that provide logistics management services to overseas clients who use Singapore as a logistics hub.

Under the Approved 3PL Company Scheme, you:

• Do not need to pay GST when you import goods belonging to you or your overseas principals who are not GST-registered;

• Do not need to pay GST when you remove imported goods belonging to you or your overseas principals who are not GST-registered from Zero GST warehouse; and

• Do not need to bill GST when you remove and supply the imported goods locally to persons (including customers of your overseas principals) who are approved under the following GST schemes:

  • Approved Major Exporter Scheme (MES) businesses;
  • Approved Import GST Suspension Scheme (AISS);
  • Approved Contract Manufacturer and Trader (ACMT) Scheme; or
  • Approved Third Party Logistics Company Scheme.

Specialised Warehouse Scheme (SWS)

Under this scheme, qualifying services performed on qualifying goods in Approved Specialised Warehouses and the lease/ tenancy/ license of storage space in these warehouses can be zero-rated to overseas persons.

Need assistance in understanding all the schemes you are eligible for when filing GST? Talk to a GST services provider in Singapore.