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Traders  & Businesses Masthead

Licensed Warehouse Scheme


Overview
 
What is a Licensed Warehouse?
What is Warehousing of Liquors and Tobacco?
Who can operate a Licensed Warehouse?
Benefits
How to apply for a Licensed Warehouse licence?  

Annual Licence Fee
Responsibilities of a Licensed Warehouse licensee
Customs Stock Checks
Temporary Removal of Goods for Auctions & Exhibitions
Errors and Offences
Best Practices


Overview

This page explains how a Licensed Warehouse works, the qualifying criteria, and the responsibilities of operating one.




What is a Licensed Warehouse?

A Licensed Warehouse is a designated area approved and licensed by the Singapore Customs for storing imported dutiable goods, namely liquors, tobacco products, motor vehicles and petroleum, with the duty and GST payable suspended.

There are three licence types, namely Warehouse Type I, Type II and Type III. Type I and II licensees need to qualify for the “Standard” and “Intermediate” bands under TradeFIRST respectively. Type III licensees need to qualify for the “Enhanced” or the “Premium” band. Licensees in higher tiers (i.e. Type III) would be accorded the most facilitation, but they would be expected to have better internal controls and compliance levels.

TradeFIRST Band

LW Type

Standard

I

Intermediate

II

Enhanced & Premium

III




What is Warehousing of Liquors and Tobacco?

For dutiable goods imported for storage in a Licensed Warehouse (LW), the GST and duty will be suspended. However, GST and duty will be payable when the goods are removed from the LW into Customs Territory for use. For container that is being sealed with customs seal, application for stuffing/unstuffing of dutiable goods at a licensed warehouse should be e-filed to Company Compliance Branch 24 hours before the operation. Click here to e-file application.

Every case, cask or package in good condition, containing dutiable goods shall be deemed to contain the full quantity as declared in the relevant Customs permits unless a Customs inspection is conducted. Application for a Customs inspection should be made within 24 hours of arrival of the goods in a licensed warehouse. Click here to e-file application.

After the inspection, the owner of the goods or his agent may re-condition or repack the goods. Duties may be remitted on any goods found deficient at the time of inspection.

Goods that are not fit for human consumption may be destroyed under Customs supervision.

Fees for inspection, supervision of repacking and destruction are payable in respect of dutiable goods surveyed, repacked or destroyed.

Please click here ( DOC 30kb ) for an overview of the procedure for storing dutiable imports in licensed warehouses.




Who can operate a Licensed Warehouse?

A Licensed Warehouse may be operated by the owner of the goods or a service operator who is responsible for the security of the warehoused goods.




Benefits

The facilitation accorded to Type III licensees include being allowed to store both duty suspended and duty-paid dutiable goods within the licensed area, and operate multiple licensed areas under a single licence and pay a single licence fee. Also, licensees are entitled to the benefits for the tier qualified for, as well as that for the lower tiers. For example, Type III licensees are entitled to the benefits for Type I, II and III licensees. Please see the Table below for a summary of the benefits by licence Type.

Benefits

Type I (Standard Band)

Type II (Intermediate Band)

Type III (Enhanced & Premium Bands)

Duties and GST are suspended/zero-rated during storage, in-bond sales, removal between Licensed Warehouses and export.

Yes

Yes

Yes

No need to e-file for Customs Supervision on container stuffing.

Yes

Yes

Yes

Must declare the OO permit before container stuffing and indicate the stuffing date and time in the Trader Remarks field.

Yes

Yes

No

Permissible Items within the Licensed Area

Imported dutiable goods.

 

Licensed area must be physically demarcated.

 

LW/LWV goods must be labelled with their Customs Lot Numbers.

Imported dutiable goods.

 

Licensed area must be physically demarcated.

 

LW/LWV goods must be labelled with their Customs Lot Numbers.

Type of Goods:

- LW/LWV goods (duty and GST suspended)

- Tax paid goods (dutiable and non-dutiable)

- Locally manufactured dutiable and non-dutiable goods.

- Not allowed - GST-suspended goods under the Zero GST Warehouse scheme

 

Do not have to physically demarcate the licensed area, but have to store the LW/LWV goods within the licensed area outlined in the layout plans endorsed by Singapore Customs.

 

LW/LWV goods must be labelled with their Customs Lot Numbers. Previous LW/LWV goods that are now covered by DP permits have to be labelled with "tax paid".

Consolidated Duty & GST Payment Permit

No

No

Yes, licensees can take out a weekly consolidated payment permit covering the local releases of dutiable goods from the licensed premises for the week (7 consecutive days).

 

Licensees' warehouse management systems must be able to track these local releases

Single Annual Licence Fee for mixed types of dutiable goods

No

Yes, licensees that store both liquor/tobacco products and motor vehicles can pay a single licence fee annually (single site)

Yes, licensees that store both liquor/tobacco products and motor vehicles can pay a single licence fee annually (multiple sites)

Single Annual Licence Fee for multiple licensed locations

No

No

Yes.

Motor Vehicle Exhibitions

Allowed to remove motor vehicles from LWVs for approved exhibitions for up to 1 month without SC’s prior approval

Allowed to remove motor vehicles from LWVs for approved exhibitions for up to 3 months without SC’s prior approval

Allowed to remove motor vehicles from LWVs for approved exhibitions for up to 3 months without SC’s prior approval. Licensees are also allowed to modify (retrofit, re-spray, add/remove component parts) motor vehicles within their LWVs. The modified Motor vehicles’ tariff classifications and duty rates must not differ from the original

Alcoholic Beverages Exhibitions

Allowed to temporarily remove tax suspended wines from LWs for approved exhibitions

Allowed to temporarily remove tax suspended alcoholic beverages (i.e. not just wines)  from LWs for approved exhibitions

Allowed to temporarily remove tax suspended alcoholic beverages (i.e. not just wines)  from LWs for approved exhibitions


How to apply for a Licensed Warehouse licence?

  1. E-file for a licence to operate a Licensed Warehouse
  2. Submit the following documents to the Schemes & Engagement Branch, Singapore Customs, 55 Newton Road #07-01, Singapore 307987:
    • TradeFIRST Self-Assessment Checklist
    • Two copies of the site plan and the layout of the intended Licensed Premises.
    • Application for Interbank GIRO
    • You need not submit this form if you already have an IBG account with Singapore Customs.
    • Application for Authorisation of Declaring Agent(s) for Licensed Premises
    • ACRA Business Profile of Company (bizFILE).Your organisation chart showing the personnel in-charge of the intended Licensed Premises.
    • The chart should contain the full names and responsibilities of your staff.
    • Tenure Agreement/Lease of Premises
    • Your latest year-end audited financial statement, if any.
    • Your warehousing procedural manual on:
      • the handling of in-coming goods, from the time you receive instructions from your customers/suppliers about the importation of goods, to the time when the stock records are updated;
      • the handling of out-going goods, from the time you receive the delivery instructions from your customers, to the time when your stock records are updated;
      • stock-taking; and
      • discrepancy reporting
      • The procedural manual should also include step-by-step details of the checks and counter-checks performed by your staff, including the documents prepared/generated to record the stock movements, stock-take and discrepancies discovered and other controls in place to ensure that the records are updated and accurate.
  3. We may arrange to visit you to discuss your application. This gives us an opportunity to explain the Licensed Warehouse Scheme and conduct a site visit of the premises, intended to be used for the Licensed Warehouse. The visit also provides you with an opportunity to clarify any queries you may have about the Licensed Warehouse Scheme.  


Annual Licence Fee


An annual licence fee is payable upon issue of the licence. The rate based on the *Projected Potential Duty/Average Past Monthly Duty of the dutiable goods stored:

Projected Potential Duty*/Average Past Monthly Duty**

Fee

$1 million or less

$2,500

More than $1 million but less than $10 million

$4,000

$10 million or more

$21,000

*“Projected potential duty” is the total customs and excise duties of the projected maximum quantity of goods that can be warehoused at any one time in the proposed area; “Average past monthly duty” means the average of the total customs and excise duties of all goods warehoused in the licensed area on the 1st day of each month over the last 12 months.

A Bank Guarantee or an Insurance Bond may have to be lodged as security. The quantum is based on the average past monthly duty of the dutiable goods stored.

Responsibilities of a Licensed Warehouse licensee

  1. Accountable for the dutiable goods stored in the licensed premises.
  2. Obtain prior approval from Customs for any structural alteration to the licensed premises and licensed area(s).
  3. Ensure adequate security measures in the licensed premises.
  4. Ensure that all entrance/exits must be secured when there is no movement of dutiable goods in the licensed premises.
  5. Comply with the Customs Act and Customs Regulations and other conditions imposed.
  6. Inventory records must be properly maintained and updated.
  7. Inform Customs without delay if discrepancies between the actual stock and the recorded stock were discovered at any time.
  8. All import, export and removal of goods from and/or to the licensed premises must be covered by relevant Customs permits electronically through the TradeNet®.
  9. Apply for container unstuffing supervision (where applicable). If supervision is waived, verify the container numbers, seal numbers, markings, goods descriptions and quantities, engine chassis (if any), Customs Lot Numbers. Report discrepancies to Customs and amend the cargo clearance permits as advised by Customs.
  10. Apply for Survey & Destruction: For goods deemed unfit for human consumption and/or goods with damaged packaging. Licensee to book a destruction slot at an approved disposal site.




Customs Stock Checks

Customs may conduct periodic audits, including spot checks on the physical stocks stored in the licensed premises.




Temporary Removal of Goods for Auctions & Exhibitions

For details, click here.


Errors and Offences

The key offences and corresponding penalties under the Customs Act, relating to the Licensed Warehouse Scheme are as follows: 

Offence

Penalty Upon Conviction

Section 27(1)(c) of the Customs Act:

Failure to comply with conditions imposed on removal of dutiable goods from customs control.

A fine not exceeding $5,000.

Section 128(1)(a) of the Customs Act:

Making an incorrect declaration.

A fine not exceeding $10,000, or the equivalent of the customs duty, excise duty or GST payable, whichever is the greater; or imprisonment not exceeding 12 months; or both.

Section 128K(a) of the Customs Act:

Illegally removal of goods from customs control.

A fine not less than 10 times the customs duty, excise duty or GST evaded, or $5,000, whichever is lesser; and not more than 20 times the customs duty, excise duty or GST evaded, or $5,000, whichever is greater.

Note: Higher penalties are applicable for:

(a)  second or subsequent conviction, or

(b) offences involving tobacco products. Refer to the Customs Act for more details.

In lieu of prosecution, Singapore Customs may compound the abovementioned offences for a sum not exceeding $5,000 per offence.

Below are examples of past errors and offences committed by licensees and their declaring agents.

Violation of A10 Permit Condition

The A10 permit condition states that “Goods declared must be collected and delivered directly to the place of receipt by the same commercial vehicle(s). Detouring and/or transferring of goods to other vehicles are prohibited. The use of passenger vehicle is only allowed for small quantity (not exceeding 22.5 litres of liqour and/or 1 kg of tobacco products) exporting via air checkpoints”.  A licensed warehouse released a consignment of duty-unpaid beers to its client who self-collected the goods using multiple lorries. The duty-unpaid beers were covered by multiple permits declared by the licensed warehouse. While en route to the checkpoints for export, the duty-unpaid beers were transferred from the lorries to multiple passenger cars. The licensee was given a warning while the exporter was compounded for an offence under Section 27(1)(c) of the Customs Act.  

Violation of P1/H1/A3 Permit Condition

The above permit conditions require that the container or the goods, together with the relevant permits and supporting documents to be produced at the checkpoint for customs clearance. Licensees or their authorised declaring agents should ensure that their drivers report to the designated lane at the checkpoint for customs clearance by Immigration and Checkpoint Authority officers. Company A was compounded under Section 27(1)(c) of the Customs Act for failure to produce the goods for customs clearance. Duty and GST were also recovered as the company was unable to show proof of export of the goods.
 

Discrepancies Detected during Stock Checks

During a stock check conducted by Singapore Customs on a licensed warehouse, more than 600 discrepancies were detected. The licensee was unable to furnish satisfactory explanation for the missing stocks as they had failed to properly maintain proper accounting records when receiving and releasing goods. Inventory records were also not updated promptly. The licensee was compounded for offences under Section 128K(a) of the Customs Act. Duty and GST for the unaccounted goods were also recovered.

Technicial Errors involving Incorrect Declarations

Licensees or their authorised declaring agents should ensure that information is correctly declared when applying for customs permit, including consignment details such as HS Code, HS Quantity & Unit, Packing/Goods Description, etc.  Company B made errors in the declaration and was compounded for an offence under Section 128(1)(a) of the Customs Act.




Best Practices

Licensees are accountable for the dutiable goods stored in their licensed warehouse and they are encouraged to follow the Dos and Don’ts below.

Do:

ü   Conduct regular briefing sessions to remind staff and clients on requirements 
    pertaining to the Licensed Warehouse Scheme.

ü   Keep proper records of the time-in and time-out of any person visiting the 
    warehouse for the collection of the goods.

ü   Remind the driver, in the case where an external transport company is used to
    deliver the dutiable goods to be exported, that he should proceed directly to the
    checkpoint and not stop en route at other locations to collect other goods.

Do Not:

r Remove any duty-unpaid goods from the designated storage area(s) without the 
     proper permits.

r
   
Break the Customs red seal and unstuff a container sealed with Customs 
     red seal without any Customs approval.

r  Store other types of goods (non-dutiable goods) in the designated storage area(s) 
     meant for duty-unpaid goods. (Except for LW Type III licensees)

r  Allow any unauthorised personnel to enter the storage area(s) meant for duty-
    unpaid goods.





FAQs

Please refer to our FAQ document.

For Directories of Service Providers, click here.

For information on Customs Circular(s) on Licensed Warehouse (LW), please click the following:

Circular No. 05/2012 (Revised Container Stuffing Procedure)

Circular No. 04/2012
 (Tiering of the LW scheme)

Circular No. 05/2010 (Implementation of New Measures to Monitor Movement of Dutiable Liquors and Tobacco Products)

Circular No. 4/2009 (Temporary Removal of Goods from ZGS or LWs for Auctions and Exhibitions)

Circular No. 3/2009 (Duty Exemption and GST Relief on Wine for Approved Events)

Circular No. 14/2008 (New Marking Requirement on Cigarette Sticks)

Circular No. 4/2008 (Liquor Tariff Changes)

Circular No. 1/2007 (Lifting of Import Prohibition and Marking Requirements on Liquors/Cigarettes for export)

Circular No. 11/2003 (Lifting of Markings on Cigarettes for Export and Re-Export)

Circular No. 27/2001 (Marking of Lot Numbers)

Circular No. 42/2000 (Markings of Duty Exempted Liquors Supplied to Embassies and High Commissions)

Circular No. 30/2000 (Temporary Release of Motor Vehicles from Licensed Warehouses)




For More Information

You may refer to "A Handbook for the LW Scheme (Jan 2014 version)" (PDF 500kb). Alternatively, should you need further clarification on the LW Scheme, you may contact Singapore Customs at our Call Centre number 6355 2000 or email us at customs_schemes@customs.gov.sg


Frequently Asked Questions

For FAQs on LWS matters, click here.


Customs Circulars

For Circulars on customs matters, click here.


Engagements & Events

For upcoming and past engagements and events, click here


E-Learning Courseware

For e-learning to the ‘Guide to Customs Procedures’, click here.



Last reviewed on 15 April 2014
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