No review of GST 'anomaly' at airport

Items bought upon departure not taxed when brought in later

The Inland Revenue Authority of Singapore (Iras) is sticking to its guns regarding purchase-on-arrival rules at Changi Airport, despite complaints of an "anomaly" in the goods and services tax (GST).

Currently, if a traveller shops at the airport before getting on a flight, he does not have to pay the 7 per cent GST because the items bought are considered as being exported.

However, if the purchases are made at the airport when the person returns to the Republic, the items become taxable because they are considered to be consumed in Singapore.

This means that technically a passenger can buy a product upon departure, then bring it back to consume - without paying the consumption-based tax.

Ms Caroline Tan Hwee Ying wrote to The Straits Times Forum Page last month, asking why this is so. She said: "Carrying the items out of the country only to bring them back is simply unnecessary."

As a leading global airport, Changi should have a collect-on-return service, allowing travellers to make tax-free purchases before they depart and collect the items when they return, she said.

But an Iras spokesman insisted that the rules are clear and there are no plans for a review. She explained: "Only goods which are brought out of Singapore for overseas consumption can be zero-rated (no GST)."