GST on all online goods imported into S'pore from 2023, new law proposes

Yes, from Jan. 1, 2023.

Belmont Lay | October 06, 2021, 05:18 AM

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What is the new proposed Bill?: All goods worth S$400 or less that are imported by air or post into Singapore to be subjected to GST (Goods and Services Tax) from Jan. 1, 2023.

What is the current rule?: All goods valued up to S$400 and imported via air or post are not subjected to GST.

GST is currently collected on goods imported via land or sea, regardless of value.

What does this new proposed law mean?: GST will be effectively imposed on all online shopping from overseas retailers imported into Singapore via air or post -- as purchases valued above S$400 are already subjected to GST.

What is the proposed Bill called?: The Goods and Services Tax (Amendment) Bill.

When was it tabled? In Parliament on Monday, Oct. 4.

Which Act will the Bill affect?: The Goods and Services Tax Act.

Under which ministry?: Ministry of Finance.

What other goods and services will be subjected to GST soon?: Business-to-consumer imported non-digital services, such as the provision of educational learning and telemedicine that involve live interaction with overseas providers.

These imported goods and services are not subjected to GST currently.

Is this development new?: No.

Deputy Prime Minister and Finance Minister Heng Swee Keat already said in his Budget speech earlier in 2021 that the move will cover goods valued up to S$400 and imported via air or post.

What did MOF say?: MOF, which introduced the Bill, said:

"The extension of GST to such imported low-value goods and business-to-consumer imported non-digital services complements the existing GST measures on business-to-business imported services and business-to-consumer imported digital services that took effect from Jan. 1 last year."

"Together, they ensure a level playing field for our local businesses to be competitive. Overseas suppliers of goods and services will be subject to the same GST treatment as local suppliers. This change also keeps our GST system resilient in a growing digital economy."

Which Facebook post has made people in Singapore angry?: This post by Singapore Customs.

Why are people in Singapore angry about this post?: Apparently, many people here are hearing it for the first time that all goods below and above S$400 will be subjected to GST come Jan. 1, 2023.

This is despite this news having made the rounds earlier in 2021.

Some are also under the mistaken impression that GST for goods under S$400 kicks in by Nov. 1, 2021.

This is incorrect.

As per the details provided by Singapore Customs on its website, GST relief is still granted on goods imported by post, with a total cost, insurance and freight (CIF) value not exceeding S$400 -- but does not apply to alcohol and tobacco.

Then what is this Singapore Customs announcement about?: It is about allowing people who receive taxable items (i.e. goods above S$400) from overseas via the postal service or Speedpost to make their payment through cashless means, as previously announced by Singapore Post (SingPost) on Oct. 1, 2021.

All duties or Goods and Services Tax (GST), or both, can be paid via the SingPost mobile app, SAM kiosks, or at any post offices before delivery is made.

SingPost said the postman, Speedpost parcel ambassador or appointed courier will stop collecting cash payment from Nov. 1, 2021, for such items at the time of delivery.

GIRO settlement for registered corporate customers remains unchanged.

To reiterate, what is the current practice before Jan. 1, 2023?: Goods imported via air or post with CIF exceeding S$400 will have GST levied for the entire value of the goods.

GST is collected on goods imported via land or sea, regardless of value.

GST is imposed on all goods currently, just that exemptions have been made for now due to GST relief granted for goods imported by air or post with a CIF value not exceeding S$400, which is why GST is not paid on these goods.

Push for SingPost app to be downloaded

SingPost is encouraging all its customers to use its mobile app to receive their items from overseas.

Upon receipt of the taxable and/ or dutiable items from overseas, SingPost will notify customers on GST payable items via a push notification on the mobile app, as well as via SMS or email.

Customers without a registered account on the SingPost mobile app will be notified either via an SMS, email or a physical letter.

Upon notification, payment will have to be made within 14 days, or else the item will be returned to the sender.

SingPost will only arrange for the item to be delivered within two to three working days once payment is received.

Those eligible for GST waivers should email SingPost ([email protected]) -- before the items are released for delivery -- a copy of the item's import permit along with the tracking number of the shipment.

SingPost also announced that the ICA counter at SingPost Centre will be permanently closed from Dec. 1, 2021.

Customers at the moment must make GST and duty payment in person at the ICA counter before collecting their dutiable items from overseas.

But they will no longer need to physically pay and collect their items in person once the ICA counter closes.

Customers receiving dutiable items will be notified via the SingPost mobile app, SMS, email or letter.

They will then need to make the necessary payment before the items are delivered to the listed address.

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