Goods and Services Tax Introduction to Import GST Deferment Scheme (IGDS)

Goods and Services TaxIntroduction 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?

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

Time lapse between payment of import GST and claiming it back as input tax

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

Cash flow eased

Introduction

GST Reporting

Approval date on permit:

12 October 2010

Declared in GST return for period: 1 October to 31

October 2010

Introduction

Numerical Comparison:

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 re-export 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

Qualifying Conditions

Qualifying Conditions

As safeguard against risks:

– May impose letter of guarantee prior to approval or during the validity period of the scheme; or

– Reject application

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

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

Differences between IGDS and MES

IGDS MES

Target Group Importers

Has been importing or will be importing goods with good compliance records with SC and IRAS

Major exporters

Zero-rated supplies > 50% of total supplies orValue of zero-rated supplies > S$10 million for past 12 months

Payment of Import GST

Deferred until the submission of GST return, applies to dutiable goods

Suspended, does not apply to dutiable goods

Major Requirements

1. Monthly GST reporting

2. GIRO payment

3. Complete ASK

Submit Positive Assurance Report

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

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

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

Application Process

No Yes

No Yes

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

Goods and Services Tax Introduction to Import GST Deferment Scheme (IGDS)

Documents

Transcript of Goods and Services Tax Introduction to Import GST Deferment Scheme (IGDS)