Do I need to pay GST on the bag I bought overseas? 8 things you need to know

Shoppers at the Shilla Duty Free shop at Changi Airport Terminal 1.
Shoppers at the Shilla Duty Free shop at Changi Airport Terminal 1.ST PHOTO: MARK CHEONG

SINGAPORE - The Singapore Customs has launched a new app, Customs@SG, that allows travellers to make an advance declaration and payment of duty and Goods and Services Tax (GST) for overseas purchases before arriving in Singapore.

Travellers, including Singaporeans returning from overseas, will have to pay GST on the value of the goods that exceeds the GST relief.

GST for goods valued below $150 is not applicable for travellers who are out of Singapore for less than 48 hours. For those who are away for more than 48 hours, GST is exempt for goods valued up to $600.

Still unsure about when you need to pay GST and how much to pay? Here are the answers to some commonly asked questions:

1. Why do Singaporeans have to pay GST on their purchases overseas?

GST is a tax on local consumption. 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 policy of GST imposed on goods brought into Singapore has been in force since April 1, 1994,when GST was first implemented in Singapore.

Singapore's GST (known in some countries as Value Added Tax) on imports is consistent in all countries with GST or Value Added Tax systems.

There is no GST relief for liquor, tobacco products, petroleum and goods imported for commercial purposes.

2. If the item was received as a gift, how is the tax calculated since there will be no receipt?

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 years?

In 2012 and 2013, there were 179 and 398 cases respectively where warnings or composition sums were issued.


4. What happens if a traveller is caught for not declaring goods purchased abroad?

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.

Moreover, 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.

5. If a traveller buys a bag from a duty-free shop in Changi Airport while leaving Singapore, will he/she be taxed on the bag upon arrival back to the country?

The newly purchased bag is subject to GST if it exceeds the traveller's GST relief amount.

6. Is the item still subject to GST if the traveller removes the price tag/packaging and uses the item bought overseas immediately?

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.

7. Do travellers still have to pay GST if they have already paid sales tax for an item overseas and did not claim tax rebate?

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.

8. 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.