S'poreans reminded that goods bought overseas are subject to GST here
By Amelia Teng, The Straits Times, 31 May 2014
By Amelia Teng, The Straits Times, 31 May 2014
SINGAPORE Customs issued twice as many warnings and fines last year compared with 2012, to people who did not declare goods bought overseas that are liable to be taxed here.
It handed out 398 warnings and fines known as composition sums last year to people who did not declare goods bought abroad with values exceeding the goods and services tax (GST) relief amounts of $150 and $600. In 2012, there were 179 cases.
The number of cases include first-time and repeat offenders and items found at land, air and sea checkpoints.
On Tuesday, The Straits Times ran a story that reminded Singaporeans to pay GST on their overseas shopping.
All goods, including souvenirs, gifts and products for personal use, brought into Singapore are subject to 7 per cent GST.
The story went viral online, with many readers expressing surprise that the rule existed, and some questioning the "low threshold" of $600.
In response, Singapore Customs said the policy of imposing GST on goods brought into Singapore is not new.
It has been in force since April 1, 1994, when GST was first implemented in Singapore. The practice of imposing GST on imports is found in all countries with GST or value-added-tax systems.
Under the rules, if a traveller is out of Singapore for less than 48 hours, he does not have to pay GST on goods valued below $150. If he is out of the country for more than 48 hours, goods valued up to $600 are exempt from GST.
This is double the previous relief amount of $300, which was increased in 2012 to keep pace with rising expenditures.On arrival, travellers carrying products exceeding the GST relief or duty-free allowance are required to declare the goods at the Red Channel.
They can pay tax at the Singapore Customs tax payment office or at the self-service tax payment kiosk at checkpoints.
Failure to declare the value of purchases is an offence under the Customs Act and the GST Act. Offenders can be prosecuted in court and fined up to $10,000 and jailed for up to three years.
A Singapore Customs spokesman said that GST is applicable for items brought into the country even if foreign sales tax was paid on them, as they will be used here.
If receipts are not available, the value of goods will be assessed based on that of identical or similar goods, he added.
Mrs Abigail Tan, who works in the finance industry, said she had not heard of such a rule.
"I got a shock when I read the news. That makes going overseas to shop quite pointless," said the 27-year-old, who bought a bag for a few thousand dollars on a holiday in Europe this month.
She saved nearly $1,000 by buying the bag abroad because of overseas tax rebates. But she said: "I probably wouldn't spend more than $600 from now onwards on my next trips because of the risk involved."
Travellers returning to Singapore to pay GST for purchases
The Straits Times, 27 May 2014
The Straits Times, 27 May 2014
June is coming and that means overseas holidays for many families. But beware of lugging back too much shopping from your jaunts as your spoils could be subject to Goods and Service Tax (GST) once you get home.
Singapore Customs has issued an advisory to remind travellers that GST is exempt only for certain values. If you travel out of Singapore for less than 48 hours, then you will not have to pay GST for goods valued up to $150. If you are away for more than 48 hours, you are exempt from GST for goods valued up to $600.
Travellers will have to pay GST only on the value of the goods that exceeds the GST relief. For example, if you buy $800 worth of goods on a four-day trip to Hong Kong, you will need to pay GST for the $200 worth of goods. At 7 per cent, that comes up to $14.
You will have to produce invoices or receipts of these purchases to help calculate the tax payable. You can pay taxes at the Singapore Customs' Tax Payment Office or at the self-service Tax Payment Kiosk at the checkpoints.
Failure to declare the value of your purchases is an offence under the Customs Act and the GST Act. Offenders may be prosecuted in court, fined up to $10,000 and jailed for up to three years.
There is no GST relief for liquor, tobacco products, petroleum and goods imported for commercial purposes.
For more information on customs rules, go to www.customs.gov.sg.
On Tuesday, a Straits Times story which reminded Singaporeans to pay Goods and Services Tax on their overseas shopping went viral.
Singapore Customs explains that the policy of imposing GST on goods brought into Singapore is not new. It has been in force since April 1, 1994 when GST was first implemented in Singapore.
According to the rules, if a traveller is out of Singapore for less than 48 hours, he does not have to pay GST for goods valued below $150. If you are out of the country for more than 48 hours, GST is exempt for goods valued up to $600.
Here is a detailed FAQ on what you need to know about how GST applies to your shopping spoils from overseas holidays.
1. Why do Singaporeans have to pay GST on their purchases overseas?
1. Why do Singaporeans have to pay GST on their purchases overseas?
GST is a tax on local consumption. As such, all goods brought into Singapore are subject to 7 per cent GST regardless of whether they are imported through commercial shipments or hand-carried by travellers for their own personal use. Such goods include new articles, souvenirs, gifts and food preparations purchased overseas and meant for the traveller’s personal use.
The practice of imposing GST (known in some countries as Value Added Tax) on imports is consistent in all countries with GST or Value Added Tax systems.
To minimise inconvenience to international travellers and returning residents who bring a small amount of goods into Singapore for their personal use or consumption, GST relief is granted and the amount is based on the value of goods they bring in and the period that they are away from Singapore. Travellers will have to pay GST on the value of the goods which is in excess of the GST relief granted to them.
2. If a traveller receives a gift, how is the tax calculated since he/she will not have a receipt and will not be able to estimate the value of the gift? What if the gift is a vintage object? What if you say you have no receipts at all for the items?
2. If a traveller receives a gift, how is the tax calculated since he/she will not have a receipt and will not be able to estimate the value of the gift? What if the gift is a vintage object? What if you say you have no receipts at all for the items?
If the receipts are not available, the value of the goods will be assessed based on the values of identical or similar goods when computing the GST payable.
3. How many people have been caught not declaring taxable goods in the past year? If I'm caught but I say I will pay the GST there and then, will I still be charged? What is the process if I'm charged? Do I go to court or can it be settled with a fine? Will I have a criminal record?
3. How many people have been caught not declaring taxable goods in the past year? If I'm caught but I say I will pay the GST there and then, will I still be charged? What is the process if I'm charged? Do I go to court or can it be settled with a fine? Will I have a criminal record?
Travellers who are stopped at the checkpoints for not declaring goods purchased abroad with values exceeding their GST relief quantum will be referred to Singapore Customs. The GST due is collected from the travellers, with an advisory to pay GST for goods exceeding their GST relief. For repeat offenders and persons carrying commercial goods, warnings or composition sums may be issued. In 2012 and 2013, there were 179 and 398 cases respectively where warnings or composition sums were issued.
4. What if I buy a $1,000 bag from one of the shops at Changi Airport's duty free while leaving Singapore - will I be taxed on the bag when I come back together with the bag?
4. What if I buy a $1,000 bag from one of the shops at Changi Airport's duty free while leaving Singapore - will I be taxed on the bag when I come back together with the bag?
The newly purchased bag is subject to GST if it exceeds the traveller’s GST relief amount.
5. If a traveller removes the price tag/packaging and uses the item bought overseas immediately, is the item still subject to GST?
5. If a traveller removes the price tag/packaging and uses the item bought overseas immediately, is the item still subject to GST?
These items are considered as new articles and are subject to GST if the traveller’s GST relief amount is exceeded when the new items are brought into Singapore.
6. If I have already paid sales tax for an item overseas and did not claim tax rebate, do I still have to pay GST?
6. If I have already paid sales tax for an item overseas and did not claim tax rebate, do I still have to pay GST?
GST is applicable for items imported into Singapore regardless of whether foreign sales tax was paid for the items overseas as the items will be consumed in Singapore.
7. Are goods shipped back separately (from same trip) also subject to GST?
7. Are goods shipped back separately (from same trip) also subject to GST?
For goods imported by post, a GST relief amount of up to $400 per shipment is granted. Where the value of the shipment exceeds $400, GST is payable on the total value of the shipment.