Most exporters picture a container leaving the port when they think about zero-rated exports. But plenty of high-value goods, jewellery, watches, electronics, precision parts, leave Singapore in a traveller’s hand luggage, carried out through Changi Airport by an overseas buyer or a company representative. For GST purposes, those hand-carried exports have their own special rules. The Hand-Carried Exports Scheme (HCES) sets out exactly how a GST-registered business must document such sales in order to zero-rate them. This 2026 guide explains what HCES is, when it is compulsory, and the paperwork you must keep to support zero-rating.
It is written for business owners, finance staff and export managers whose customers, or their agents, physically carry purchased goods out of Singapore by air. If you have ever sold to a visiting overseas buyer who took the goods with them, HCES almost certainly applies to you.
What is the Hand-Carried Exports Scheme?
The HCES, administered by IRAS and in force since 1 April 2009, governs how a GST-registered business zero-rates a supply of goods that are hand-carried out of Singapore via Changi International Airport. Normally, an export of goods can be zero-rated, meaning GST is charged at 0%, provided the exporter holds the required export evidence. HCES specifies the particular evidence needed when the goods leave in hand-carried form rather than as freight.
The scheme exists because hand-carried goods are harder to trace than containerised cargo. There is no bill of lading or airway bill for a watch in someone’s pocket. HCES therefore requires a defined chain of documents, an export permit, an endorsed record, and proof of payment, so that IRAS can be satisfied the goods genuinely left Singapore before the sale is zero-rated.
When is HCES compulsory?
This is the point most businesses miss. It is compulsory for a GST-registered business to apply HCES if it wishes to zero-rate a supply of goods that are hand-carried out of Singapore via Changi International Airport and sold to an overseas customer, unless the business has obtained the Comptroller’s written approval to be exempted from the scheme.
In other words, if your customer or their agent carries the goods out by air and you want to charge 0% GST, you must follow HCES. If you do not meet the HCES documentary requirements, you cannot zero-rate the supply, and you must standard-rate it, charging GST at the prevailing rate. The scheme is not optional dressing; it is the gateway to zero-rating for this kind of sale.
The documentary requirements
HCES sets out a specific sequence. Getting each step right is what allows the supply to be zero-rated.
Take up a valid export permit
You must obtain a valid export permit (an OUT permit or Cargo Clearance Permit) via TradeNet for the goods to be hand-carried out, regardless of the value or quantity of the goods. There is no de minimis; even a single low-value item requires a permit if you want to zero-rate under HCES.
Present the goods for inspection and endorsement
At Changi, before departure, the goods, together with the Customs export permit, the supporting invoice and the traveller’s boarding pass or confirmed air ticket, must be presented to Singapore Customs officers for inspection and endorsement. This physical check is the heart of the scheme: it confirms the goods and links them to the departure.
Keep the required records within 60 days
To support zero-rating, you must maintain, within 60 days from the time of supply, the key documents: a copy of the invoice or tax invoice issued to the overseas customer; the endorsed export permit (or export permit with digital clearance); evidence of payment received from the overseas customer; and, where GST was initially charged and later refunded to the customer, evidence of that refund. Miss the window or the documents, and the supply cannot be zero-rated.
HCES compared with other export routes
HCES is one of several ways goods leave Singapore free of GST, and it helps to see where it sits.
For freight exports, the ordinary export-evidence rules under GST zero-rating apply, with airway bills or bills of lading as proof. For import-heavy traders, the Major Exporter Scheme suspends import GST, and the Import GST Deferment Scheme defers it. Goods held in a Free Trade Zone are not treated as imported until they leave the zone. HCES is narrower and very specific: it is the rulebook for the moment a person walks a purchased good through Changi and out of the country. Any business that is GST-registered and sells to travelling overseas buyers should know it.
Common pitfalls
The usual mistakes are avoidable. Zero-rating a hand-carried sale without taking up an export permit is the most frequent, and it defeats zero-rating entirely. Others include failing to present the goods for Customs endorsement before departure, not obtaining proof of payment from the overseas customer, and letting the 60-day record window lapse. Because the penalty for getting it wrong is having to account for output GST you did not collect, the discipline of following each HCES step matters commercially, not just administratively.
Frequently asked questions
Does HCES apply to goods carried out by land or sea?
HCES specifically covers goods hand-carried out via Changi International Airport. Exports by other modes follow the ordinary export-evidence rules for zero-rating.
Is there a minimum value before I need a permit?
No. Under HCES you must take up a valid export permit regardless of the value or quantity of the goods if you want to zero-rate the supply.
What if I do not follow HCES?
Then you cannot zero-rate the hand-carried supply. You must charge GST at the standard rate, unless you have the Comptroller’s written exemption from the scheme.
How long do I have to keep the supporting documents?
You must maintain the required documents within 60 days from the time of supply, and retain them as part of your GST records thereafter.
How we can help
HCES is precise, and a single missing document can flip a zero-rated sale into a taxable one. Raffles Corporate Services helps GST-registered businesses set up compliant hand-carried export procedures, from raising the correct TradeNet permit to capturing endorsement and payment evidence within the 60-day window, so that zero-rating stands up to an IRAS review. If your customers carry purchased goods out through Changi, we can help you get the process right.
This article is for general information only and does not constitute tax advice. GST scheme conditions change; confirm the current requirements with IRAS or a qualified adviser before acting. See the IRAS Hand-Carried Exports Scheme guidance and Singapore Customs.
— The Editorial Team, Raffles Corporate Services