Industrial Exemption Factory Scheme
What is it?
The Industrial Exemption Factory Scheme is a duty exemption scheme for industries that use dutiable goods (except diesel products and biodiesel blends) as raw materials solely to manufacture non-dutiable finished goods.
Under this scheme, dutiable goods (except diesel products and biodiesel blends) would be duty exempted as long as they are used solely for the manufacture of non-dutiable finished goods and stored at the place of manufacture approved by Singapore Customs.
The duty-exempted raw materials must not be sold, transferred or disposed of in any way without permission from Singapore Customs.
How to Qualify?
To qualify for the Industrial Exemption Factory Scheme, the company must:
- Have a valid Customs Account
- Have good compliance records with Singapore Customs
- Be responsible for the security, accountability and control of the duty-exempted materials
An annual fee of S$600 is payable upon issuance of the certificate of exemption.
Accountability to Singapore Customs
- Accountable for duty-exempted raw materials stored in the place of manufacture and for the payment of excise duty and Goods and Services Tax (GST) on goods not accounted for
- Declare relevant Customs permits through TradeNet for movement of all goods (including duty-exempted raw materials) in and out of the place of manufacture
- Report to Singapore Customs if there is any discrepancy (for example, physical goods and permit information do not tally) by the next working day
- Provide assistance to Singapore Customs, including but not limited to manpower and system access for the purpose of any investigation, periodic audit, stock check and supervision operation conducted by Singapore Customs
- Comply with the Customs Act, Customs Regulations and the Terms and Conditions issued
Accountability to Other Competent Authorities
- Obtain the necessary approvals from the relevant Competent Authorities (for example, the storage of controlled goods, including Dangerous Goods)
- Ensure all production records, inventory records and supporting documents are properly maintained and updated
Physical Security Control
- Ensure adequate security measures in the place of manufacture
- Ensure all entrances and exits are secured when there is no production or movement of dutiable goods in the place of manufacture
- Obtain approval from Singapore Customs for any structural alteration to the place of manufacture
How to Apply?
Step 1: Apply online.
Step 2: Prepare these supporting documents:
- Accounting and Corporate Regulatory Authority BizFile Report
- Audited financial statements for the past 3 years
- Company’s organization chart showing personnel in-charge of the intended operation. The chart should contain the relevant personnel’s full name and responsibilities.
- One copy of the layout plan. Please indicate the intended place of manufacture, entry/exit points and security features such as closed-circuit televisions and alarm systems in the layout plan. The plans must show the address affixed with the company stamp.
- Annual quota of duty-exempted raw materials required to manufacture non-dutiable products
- Title deed or tenancy agreement
- Catalogues or information on the non-dutiable products to be manufactured
- Record book or inventory system on stock movements
- Company’s procedures or SOPs on the following:
- The handling of incoming and outgoing duty-exempted raw materials
- Discrepancy reporting
- Other relevant documents
Singapore Customs will contact you directly to follow up with your application.
Singapore Customs reserves the right to impose a Banker’s Guarantee or insurance bond, if required, to cover the potential duty of the duty-exempted raw materials.
If you require further assistance, please email email@example.com.
Alternatively, for urgent scheme-related matters, please contact us via our hotlines (8922 0485 and 8922 5130). Our operating hours are 8am to 6pm (Mondays to Fridays, except on public holidays).
Application for Changes to Schemes for Existing Licensees
You may complete your applications for changes to schemes for existing licensees or to update records online.
Companies on the IEF scheme will be subject to reviews and renewals, once in two years.
Frequently Asked Questions (FAQs)
1) What if I need to make changes to the quota applied due to business needs?
You may inform your designated account manager via email. Please state the quota required along with reasons for the increase or decrease in quota. Please also submit supporting documents such as the purchase order, production formulae and growth chart for our assessment.
2) How do I declare Customs permits?
Customs permits can be declared through TradeNet. More information on declaring permits can be found here.
3) How much do I have to pay for the assessment?
The assessment for the Industrial Exemption Factory Scheme is free of charge.
4) What are the diesel and biodiesel blends which are excluded?
The four types of products excluded from the scheme are:
- Automotive diesel fuels (2710.19.71),
- Other diesel fuels (2710.19.72),
- Petroleum oils and oils obtained from bituminous minerals (other than crude) and preparations, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, containing biodiesel, other than waste oils (2710.20.00),
- Other biodiesel and mixtures thereof, not containing or containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals (3826.00.90).
5) What happens if my duty-exempted raw materials exceeds the quota?
You will have to pay duty for the amount that exceeded the quota. There will not be any refund of the duty should these raw materials be exported. For more information on duties and dutiable goods, please visit our website here.
6) My company has duty-exempted raw materials that are redundant. What can I do?
Your company shall arrange for the redundant duty-exempted raw materials to be destroyed at an incineration plant under Customs supervision, for which a supervision fee is payable in accordance with prescribed rates. For more information on the supervision fees, click here.
For exportation of duty-exempted raw materials, declaration of the relevant export permit is required. For more information, click here.
7) What should I declare on TradeNet in order to enjoy the benefits of the IEF Scheme?
For your company to benefit from the duty exemption, you should declare the relevant information in your permit declarations on TradeNet as follows:
||Information to be Declared
|Place of Receipt Code
||< insert your company’s IEF Code >
||< insert Description of Duty-Exempted Raw Material >
||< insert HS Code of Duty-Exempted Raw Material >
|CA/SC Product Code
||< insert Product Code of Duty-Exempted Raw Material >