Licensed Warehouse Scheme

What is it?

The Licensed Warehouse (LW) Scheme allows approved companies to store imported dutiable goods, namely liquor, tobacco, motor vehicles, petroleum and biodiesel blends, for an indefinite period of time in a designated area licensed by Singapore Customs, with the duty and Goods and Services Tax (GST) suspended. This designated area is termed as licensed premises.

Duty and GST will be payable when these goods are removed from the licensed warehouse for local use or consumption. Duty and GST are not payable when these goods are removed for export, or when supply or sale of these goods takes place while they are in the warehouse.

You may refer to an overview of the procedures for storing dutiable imports in licensed warehouses.

Types of Licences under the LW Scheme

There are 3 licence types to cater to the different needs of companies:

• Licensed Warehouse Type I
• Licensed Warehouse Type II
• Licensed Warehouse Type III

The level of facilitation accorded, as well as the criteria on the company’s record-keeping and internal controls standard, increase from Type I to Type III.

Type I and II licensees need to qualify for the “Standard” and “Intermediate” bands under the TradeFIRST framework respectively, while Type III licensees need to qualify for the “Enhanced” or the “Premium” bands.

A summary of the benefits for the 3 LW licence types can be found in the Licensed Warehouse Handbook (Chapter 2.8).

How to Qualify?

To qualify for the Licensed Warehouse Scheme, the company must:

• Be GST-registered with the Inland Revenue Authority of Singapore
• Have a valid Customs Account
• Have good compliance records with Singapore Customs
• Ensure the premises to be licensed is a storage-based facility with security measures in place
• Have good stock record-keeping and warehouse procedures
• Be responsible for the security, accountability and control of the dutiable goods
• Undergo TradeFIRST assessment and meet all the mandatory criteria while attaining the minimum band to qualify for the respective licence types under the LW Scheme

Licence Fee

An annual licence fee is payable upon issuance of the licence. It is based on the projected potential duty* or the average past monthly duty** of the dutiable goods stored in the licensed premises:

*Projected potential duty is the total customs and excise duties of the projected maximum quantity of goods at any one time in the proposed licensed premises.

**Average past monthly duty refers to the average of the total customs and excise duties of all goods stored in the intended licensed premises on the 1st of each month during the period of 12 months (or, if the premises has been used to store goods for a shorter period, that shorter period) before the date of the application.

Key Responsibilities

• Accountability to Singapore Customs

  • Accountable for dutiable goods stored in the licensed premises and for the payment of duty and GST on goods not accounted for
  • Declare relevant Customs permits through TradeNet for movement of all goods in and out of the licensed premises, and abide by the stipulated permit conditions
  • Report to Singapore Customs if there is any discrepancy in the licensed premises 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 licensing Terms & Conditions
• Accountability to Other Competent Authorities
  • Obtain the necessary approvals from the relevant Competent Authorities (for example, the storage of controlled goods, including Dangerous Goods)
• Inventory Control
  • Ensure inventory records and supporting documents are properly maintained and updated
• Physical Security Control
  • Ensure adequate security measures in the licensed premises
  • Ensure all entrances and exits are secured when there is no movement of goods in the licensed premises
  • Obtain prior approval from Singapore Customs for any structural alteration to the licensed premises

Customs Supervision

For containers sealed with a red customs seal, the application to unstuff dutiable goods at a licensed warehouse should be e-filed to the Company Compliance Branch one working day before the unstuffing.

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

Fees for supervision of unstuffing, survey and destruction are applicable accordingly.

How to Apply?

Step 1: Complete the TradeFIRST Self-Assessment Checklist.

Step 2: Prepare these supporting documents:

• Accounting and Corporate Regulatory Authority BizFile Report
• Audited financial statements for the past 3 years
• One copy of the layout plan. Please indicate the intended licensed premises, 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
• Title deed or tenancy agreement
• Other relevant documents

Step 3: Apply online.

Singapore Customs reserves the right to impose a Banker’s Guarantee or insurance bond, if required. The quantum is based on the average past monthly duty of the dutiable goods stored.

Once the application is successful, we will contact you to follow up with your application.

For further assistance, please email customs_schemes@customs.gov.sg.

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.

Authorisation of Declaring Agent (DA) for Licensed Premises

DAs can only apply for permits involving movements of goods into, between and out of licensed premises after the licensed premises operator has authorised the DAs. In order to authorise a DA, the licensed premises operator is required to complete the [Application for the Authorisation of DAs for Licensed Premises] (https://www.customs.gov.sg/eservices/customs-forms-and-service-links) form and submit it via email to customs_schemes@customs.gov.sg. The processing time of the application is 2 working days.

Errors and Offences

Traders may be penalised if they do not comply with Customs requirements or conditions on the Licensed Warehouse Scheme enforced under the Customs Act.

For minor offences under the Customs Act, Singapore Customs may offer to compound the offences for a sum not exceeding S$5,000 per offence. Offenders may be prosecuted if the offences committed are of a fraudulent or serious nature.

Common Offences Include

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

  • Violation of A10 permit condition: Using passenger vehicles instead of commercial vehicles to deliver goods from LW to the place of receipt for export. (The use of passenger vehicles to collect goods is only allowed for a small quantity of hand-carried exports by air not exceeding 22.5 litres of liquor and/or 1000 sticks of cigarettes [1 kg of tobacco]).
  • Violation of A10 permit condition: Detouring and/or transferring of goods to other vehicles when delivering goods from LW to the place of receipt for export.
  • Failure to produce goods together with the relevant permits and supporting documents at the checkpoint for customs clearance.

• Illegal removal of goods from customs control

  • Discrepancies between physical stocks and inventory due to pilferage of goods or failure to maintain proper inventory records.

• Incorrect declarations

  • Incorrect Harmonized System (HS) code, HS quantity & unit, packing/goods description
  • Incorrect outward transport details and/or place of receipt that do not tally with the actual export shipment.

You may view this table on common offences and the penalties upon conviction.

More information on the prescribed offences and penalties under the Customs Act.

Best Practices

You are accountable as a licensee for the dutiable goods stored in or moved from/to your licensed warehouse. We encourage you to observe the following Dos and Don’ts to improve your compliance with regulatory requirements:

• Do

  
  ✔ Conduct regular briefing sessions to remind staff and clients on the requirements of the Licensed Warehouse Scheme.
  
  ✔ Keep proper records of the time-in and time-out of any person visiting the warehouse for the collection of goods.
  
  ✔ Assign a supervisory level staff to personally oversee the stuffing and unstuffing of containers.
  
  ✔ Remind drivers, including those from an external transport company, that they should deliver dutiable goods for export directly to the checkpoint and not stop along the way at other locations to collect other goods.
  
  ✔ Ensure drivers report to the designated lane at the checkpoint for customs clearance by Immigration and Checkpoints Authority officers.
  
  ✔ Conduct regular stock checks and report any discrepancies detected to Singapore Customs.
  

• Do Not

  
  ✖ Remove any duty-unpaid goods from the licensed premises without proper permits.
  
  ✖ Break the Customs red seal and unstuff a container sealed with the Customs red seal without any Customs approval.
  
  ✖ Store other types of goods (non-dutiable goods) in the licensed premises meant for duty-unpaid goods. (Except for LW Type III licensees)
  
  ✖ Allow any unauthorised personnel to enter the licensed premises meant for duty unpaid goods.