What is GST on imported low-value goods in Singapore?

Fidinam Singapore News

From 1 January 2023, GST will apply to imported low-value goods purchased by consumers in Singapore from GST-registered suppliers.

From 1 January 2023, GST in Singapore will be extended on goods valued at S$400 or below (“low-value goods”), which are imported into Singapore via air or post (“imported low-value goods”) and purchased from GST-registered suppliers.

Currently, low-value goods which are procured locally from GST-registered businesses are subject to GST, while the same goods, when procured overseas and imported via air or post are not. The change was announced in Budget 2021 and it is intended to achieve a level playing field in GST treatment for all goods consumed in Singapore, whether procured locally or from overseas.

There is no change to the GST treatment for goods imported via sea or land as well as goods valued above S$400 which are imported via air or post. That is, the current import relief remains in place.

Import relief is granted on goods imported by post or air, excluding intoxicating liquors or tobacco (or any dutiable product), with a total Cost, Insurance and Freight (CIF) value not exceeding S$400.

Goods imported by air or by post are not subject to GST at the point of importation when the CIF value is not more than $400. If the CIF value is more than $400, then the entire sum is subject to GST.

GST on Remote Services from January 2023

From 1 January 2023, GST will also be extended to supplies of imported non-digital services purchased from GST-registered overseas service providers.

Digital services which are currently subject to GST will remain taxable. This means that all supplies of imported services, whether digital or non-digital, which can be supplied and received remotely (i.e. known as “remote services”), will be subject to GST.

Therefore, all B2Csupplies of imported services, whether digital or non-digital, will be taxed. The change is intended to level the GST treatment for all remote services, whether procured locally or from overseas. 

1Business-to-Consumer (“B2C”) supplies refer to supplies made to non-GST registered persons, which include individuals and businesses that are not registered for GST.

Digital services which are currently subject to GST will remain taxable.

As for other categories of goods and services, GST is still not applicable to imported non-digital services, along with the mentioned goods imported by air or post with a value up to S$400.

When is GST payable

With effect from 1 January 2023, GST is payable when you purchase imported low-value goods from GST-registered local and overseas suppliers. Imported low-value goods are goods that are valued at S$400 or below and imported into Singapore via air or post.

Examples & FAQ
source: IRAS

Examples of low-value goods purchases

The following examples by IRAS illustrate how the GST change may affect you as a consumer.

Example 1:

Mr. Sim purchases a headset for S$240 (inclusive of shipping fees) from an overseas supplier through the marketplace of Company A, a local electronic marketplace operator. The headset is shipped from the United Kingdom and imported into Singapore via air.

Before 1 January 2023, no GST is payable on such purchases.

However, from 1 January 2023, as Company A is GST-registered, GST is payable on Mr. Sim’s purchase of the headset through Company A’s marketplace. Company A will be required to pay the GST collected to IRAS.

Example 2:

Angie orders a shirt for S$40 from an overseas fashion retailer, Company B. The shirt is shipped from Australia and imported into Singapore via post.

As Company B is registered for GST with effect from 1 January 2023, Company B will charge Angie with GST on her purchase of the shirt. Company B will be required to pay the GST collected to IRAS.

Example 3:

Mark wishes to purchase a pair of sneakers for S$300 from a seller located in the United States (“US”). However, as the US seller does not offer shipping to Singapore, Mark uses the services of a local redeliverer, Company C.

Company C provides Mark with a US forwarding address. When placing an order for the sneakers, Mark instructs the US seller to deliver the goods to the overseas forwarding address. When the goods arrive at the overseas forwarding address, Company C would then arrange to ship the goods to Singapore via air and deliver the goods to Mark.

Assuming Company C is registered for GST with effect from 1 January 2023, Company C will charge GST to Mark on his purchase and any shipping and/or administrative fees charged by Company C, as follows:

  • Sneakers (excluding GST): S$300
  • Shipping and administrative fees (excluding GST): S$15
  • Total GST payable: S$22.05

Company C will be required to pay the GST of S$22.05 collected to IRAS.

FAQ

A. Mechanics of GST on imported low-value goods

 

Why do I have to pay for GST on imported low-value goods?

The imposition of GST on imported low-value goods will achieve parity in GST treatment for all low-value goods consumed in Singapore regardless of whether they are procured from overseas or locally. 

How will the imposition of GST on low-value goods affect my online purchase of goods from 1 January 2023?

There is no change when you purchase goods which are:

  • imported via sea or land (regardless of value); or
  • imported via air or post (valued above $400).


You will continue to pay GST at the point of importation to Singapore Customs via your courier service provider (for import via sea, land and air) or SingPost (for import via post). No GST is payable at the point of purchase.

For purchases of goods valued at or below $400 which are imported into Singapore via air or post, GST will be payable at the point of purchase if the goods are purchased from suppliers that are registered for GST with effect from 1 January 2023.

At the point of purchase of low-value good

Before 1 January 2023
No GST payable

From 1 January 2023
(New!)
GST will be payable if the purchase is from a GST-registered supplier (i.e. seller/electronic marketplace operator/redeliverer).   

No GST will be payable if the purchase is from a non-GST-registered supplier. 

At the point of importation of low-value goods

No change before and after 1 January 2023

GST is not payable to Singapore Customs

        

How do I determine the value of low-value goods?

Low-value goods are goods with a sales value at or below S$400. 

The sales value refers to the selling price of the goods, which is the amount of consideration received or receivable for the supply but excluding any amounts charged for:

  • Transportation and insurance costs (i.e. fees charged to customer for transportation and insurance) for transporting the goods from overseas to the place of delivery in Singapore;
  • Transportation and insurance costs (i.e. fees charged to customer for transportation and insurance) for transporting the goods from overseas to the place of delivery in Singapore;
  • Any duties payable to Singapore Customs

Example 1:

Elsie places an order for a dress from a GST-registered overseas fashion retailer and provides her Singapore home address as the delivery address for shipment via post. The dress is listed for sale at S$420 and includes a separate and explicit charge of transportation and insurance fees of S$25.

To determine whether the supply of the dress falls within the sales value of S$400, the transportation and insurance fees will have to be excluded. Hence, the sales value of the dress is S$395. As it is below the sales value of $$400, Elsie will have to pay GST on the purchase of the dress to the supplier.

B. Paying GST on imported low-value goods

 

Do I need to pay GST when I purchase goods online which are imported into Singapore via air or post from 1 January 2023? If so, when is GST payable?

Purchase of non-dutiable goods imported via air or post

From

At the point of purchase

At the point of importation

Value more than S$400

Any suppliers

No GST payable*

GST payable to Singapore Customs via your courier service provider (for import via sea, land and air) or SingPost (for import via post)*

Value at S$400 or less

Suppliers that are registered for GST

(New!)
GST payable to supplier

No GST payable to Singapore Customs

Suppliers that are not registered for GST

No GST payable

No GST payable to Singapore Customs unless the total Cost, Insurance and Freight (CIF) is more than S$400

*There are some exceptions where the supplier may collect import GST in advance at the point of sale and remit the GST to the courier service provider for payment to Singapore Customs.

Do I need to pay GST to a GST-registered supplier on the purchase of multiple low-value goods which will be imported via air/post if the total value exceeds S$400 but the individual items are valued at less than S$400?

The entry value threshold of $400 is applied individually to each item of goods. Regardless of the way the goods are bundled for shipment, the goods would be regarded as separate items even if the combined value of the consignment were to be greater than the entry value threshold.  

Example 2:

Francis purchases 5 business shirts from an online retailer which is registered for GST. The shirts will be shipped from China to Singapore via air. The sales value of each business shirt is S$90, excluding air transport costs of S$60.  

The retailer is required to apply the entry value threshold individually to each item of goods supplied.  Since the sales value of each business shirt is below the entry value threshold of S$400, the retailer must regard the supplies of the business shirts as supplies of low-value goods and charge GST. This is notwithstanding that the total value of the goods supplied to the customer exceeds S$400

How do I know if a supplier is registered for GST?

You may use the GST Registered Business Search on IRAS’ website to find out if your supplier is registered for GST.

Is the current import relief removed with the implementation of GST on imported low-value goods?

No. The current import GST relief for goods imported by post or air (excluding intoxicating liquors and tobacco) with a total Cost, Insurance and Freight (CIF) value not exceeding S$400 will remain.

Example 4:

Helen places an order for a jacket from an overseas retailer which is not registered for GST and provides her Singapore home address as the delivery address for shipment via post. The jacket is listed for sale at S$280 and includes a separate and explicit charge of transportation and insurance fees of S$25.  Helen does not have to pay GST on the purchase of the jacket as the retailer is not registered for GST.

As the CIF value is below the entry value threshold of $$400, Helen also does not have to pay GST at the point of importation

If I purchase low-value goods from an overseas supplier which is less than S$400 but total value (including transportation and insurance) exceeds S$400, when do I pay GST? Is it at the point of purchase or at the point of importation?

Purchase from GST-registered suppliers

You have to pay GST on the purchase of goods valued at S$400 or below (“low-value goods”) from GST-registered suppliers if the goods are imported into Singapore via air/post. The supplier will provide the courier service provider with the relevant GST information (i.e. GST registration number of the supplier and an indication that GST has been paid). GST will not be payable at the point of importation of the goods.

Purchase from non-GST-registered suppliers

If you purchase goods from a non-GST registered overseas supplier and the total value exceeds S$400, GST will be payable at the point of importation.


Example 5: 

Keith purchases a pair of sneakers valued at S$390 from a GST-registered overseas supplier. The sneakers will be imported into Singapore via air. There is an additional transportation and insurance cost of S$35 charged to him.

As the sales value of the goods is S$390 (i.e., below the entry value threshold of S$400), the supplier charges GST on the sale of low-value goods. GST will be charged on the total value of the goods and services.  Keith will pay S$459 (i.e. $390 + $35 + GST of $34) to the supplier.   

The supplier will provide the courier service provider with the relevant GST information (i.e. GST registration number of the supplier and an indication that GST has been paid). GST will not be payable at the point of importation of the goods.   

Example 5a:

Keith purchases a pair of sneakers valued at S$390 from an overseas supplier which is not registered for GST. The sneakers will be imported into Singapore via air. There is an additional transportation and insurance cost of S$35 charged to him.  No GST is payable on the purchase of the sneakers as the supplier is not registered for GST. 

As the CIF value of the goods exceeds S$400 and does not qualify for GST import relief, GST will be collected by Singapore Customs on the importation of the sneakers. The courier service provider will pay the GST to Singapore Customs and collect the GST from Keith.

Is GST payable on low-value goods purchased in foreign currency where the Singapore dollar equivalent value of the goods is less than S$400 at the point of purchase but more than S$400 at the point of importation?

Purchase from GST-registered suppliers

GST is payable on the purchase of goods from GST-registered suppliers which will be imported into Singapore via air/post if the Singapore dollar equivalent value of the goods at the point of sale is S$400 or below (“low-value goods”). The supplier will provide the courier service company with the relevant GST information (i.e. GST registration number of the supplier and an indication that GST has been paid).  GST will not be payable at the point of importation of the goods.  

Purchase from non-GST-registered suppliers

If you purchase goods from a non-GST registered overseas supplier, GST will be payable at the point of importation if the total value determined at the point of importation exceeds S$400.

Example 6:

Lisa purchased a bag which will be imported into Singapore via air from a GST-registered overseas supplier.  As the Singapore dollar equivalent sales value of the bag is S$398 based on the exchange rate applied at the point of sale, the supplier charges and collects GST from Lisa. 

The supplier will provide the courier service provider with the relevant GST information (i.e. GST registration number of the supplier and an indication that GST has been paid for the low-value goods). GST will not be payable at the point of importation of goods.  

Example 6a:

Lisa purchased a bag which will be imported into Singapore via air from an overseas supplier which is not registered for GST.  The Singapore dollar equivalent sales value of the bag is S$398 based on the exchange rate applied at the point of sale. No GST is payable on the purchase as the supplier is not registered for GST. 

At the border, the Singapore dollar equivalent of the bag is S$402 based on the exchange rate applied at the time of importation into Singapore. GST will be collected at the point of importation as the CIF value of the bag is above S$400 and does not qualify for import relief.

Fidinam can help

If you have any questions about GST registration, GST payments or other tax-related matters, our tax experts at Fidinam Singapore can help. 

Please reach out to us via the form below or via info@fidinamgw.com

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