Many new importers assume that every shipment arriving in Singapore attracts duty. In practice the position is more nuanced. Understanding excise duty and customs duty for importers in Singapore helps you price goods correctly, apply for the right permits and avoid penalties at the checkpoint or port.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
This article explains how customs duty and excise duty work, how they differ from GST, and what a company should put in place before its first shipment arrives. It is general information only and does not replace tailored advice.
Who this applies to
The rules below are relevant to any Singapore-registered company, sole proprietor or partnership that brings goods into Singapore for sale, for use in its own operations, or for re-export. They also matter to e-commerce sellers, trading companies and food and beverage operators that import stock regularly.
- Companies importing alcohol, tobacco, motor vehicles or petroleum products, which are the main categories of dutiable goods.
- Businesses that manufacture or blend dutiable goods locally, where excise duty may apply at the point of release.
- Importers of ordinary goods such as electronics, clothing or machinery, who usually pay no customs duty but still need to account for GST.
- Companies that use Singapore as a trading hub and hold goods in a licensed warehouse before re-exporting them.
Key rules and requirements in Singapore
Customs duty
Singapore is largely a free port. Customs duty is charged on a short list of goods, chiefly intoxicating liquors, tobacco products, motor vehicles and certain petroleum products. Most other goods can be imported without customs duty. Duty on these categories is set under the Customs Act 1960 and the related duty orders, and the rates are published by Singapore Customs.
Excise duty
Excise duty is closely related. It applies to certain goods manufactured in Singapore and released for local consumption, and it sits alongside customs duty on the imported equivalents. In practical terms, an importer of dutiable goods will usually deal with customs duty, while a local producer will deal with excise duty, although some importers hold licences that cover both.
GST on imports
GST is a separate tax. Where a GST-registered business imports goods, GST is generally payable at the prevailing rate of 9 per cent on the customs value plus any duty, subject to the schemes available. A GST-registered importer can usually claim the import GST as input tax, provided the documents are in order. The Import GST Deferment Scheme and the Major Exporter Scheme can ease cash flow for qualifying businesses.
Permits and licences
Imports are declared through the TradeNet system, and the declaration forms the basis for assessing duty and GST. Dealing in dutiable goods usually requires a licence from Singapore Customs, and some goods also need a controlling agency permit, for example from the Singapore Food Agency or the Health Sciences Authority. Your company needs a valid UEN registered with ACRA before it can apply.
Step-by-step process
- Classify the goods using the Harmonised System code and confirm whether they are dutiable.
- Check whether a licence or controlling agency permit is required for the product.
- Confirm your GST registration position with IRAS and decide whether to apply for a GST scheme.
- Obtain the supplier’s commercial invoice, packing list and transport documents.
- Submit the import declaration through TradeNet, directly or through a declaring agent.
- Pay the duty and GST assessed, or arrange payment through an approved deferment facility.
- Keep the permit, invoice and payment records for at least five years.
Common mistakes to avoid
- Assuming all imports are duty-free because Singapore is a free port, when a product falls into a dutiable category.
- Misclassifying goods under the wrong HS code, which can lead to an incorrect duty or GST assessment.
- Undervaluing the shipment or omitting freight and insurance when declaring the customs value.
- Selling dutiable goods without the correct licence or without keeping stock records.
- Claiming import GST as input tax without holding the permit and supplier invoice.
- Overlooking that duty paid on goods is a real cost that should be reflected in the company’s accounting records and pricing.
Practical examples
Consider a small trading company that imports wine for sale to restaurants. The wine is dutiable, so the company needs the appropriate licence, pays duty at import and also accounts for GST. The duty becomes part of the cost of the stock, while the GST is generally recoverable if the company is GST-registered.
Now consider an online retailer importing phone accessories. These goods are not dutiable, so no customs duty arises. If the retailer is GST-registered, it pays GST at import and claims it back in the GST return, provided the import permit is on file.
A third case is a company that imports vehicles for resale. Motor vehicles are dutiable and also involve other regulatory requirements, so the company should check each step with the relevant authorities before committing to a purchase order.
How a corporate secretary can help
A corporate secretary in Singapore does not clear cargo, but the surrounding compliance work often decides whether an importing business runs smoothly. Raffles Corporate Services can support with company incorporation in Singapore, keeping ACRA filings and registers current through the BizFile+ portal, and confirming that the entity details used on permit and licence applications are accurate.
The team can also assist with accounting and bookkeeping so that import costs, duty and GST are recorded properly, with GST registration and filing through the IRAS myTax Portal, and with tax and payroll support as the business grows.
Frequently Asked Questions
Do all imports into Singapore attract customs duty?
No. Customs duty applies only to a limited range of goods, mainly liquor, tobacco, motor vehicles and certain petroleum products. Most goods are imported duty-free, although GST usually still applies.
Is excise duty the same as customs duty?
They are different charges. Customs duty applies to dutiable goods brought into Singapore, while excise duty applies to certain goods manufactured locally. Both are administered by Singapore Customs.
Can I claim back GST paid on imports?
A GST-registered business can generally claim import GST as input tax if the goods are used for taxable business purposes and the documents are in order. Duty itself is not claimable.
Do I need a licence to import dutiable goods?
In most cases yes. Dealing in dutiable goods typically requires a licence from Singapore Customs, and some products also need a permit from another controlling agency.
How long should I keep import records?
Businesses are generally expected to keep import documents and related accounting records for at least five years, in line with Singapore Customs and IRAS requirements.
Key takeaways
- Singapore is a free port, so customs duty applies only to specific categories of goods.
- Excise duty and customs duty are separate from GST, which most importers still need to consider.
- Correct classification, valuation and licensing are the three areas where importers most often go wrong.
- Duty is a cost of doing business and should be recorded accurately in the company’s accounts.
- Keep permits, invoices and payment records for at least five years.
Requirements may change, so always check the latest guidance from ACRA, IRAS or MOM, or consult a professional adviser.
If you would like to find out more about how Raffles Corporate Services can assist with your company’s compliance and corporate secretarial requirements, please get in touch with the team at [email protected].
Yours sincerely,
The editorial team at Raffles Corporate Services
Disclaimer: This does not constitute legal advice. If you require legal advice, please contact a lawyer.