Company made to pay GST for transhipment non-compliance

In March 2010, a local electronics trading company was made to pay the Goods and Services Tax (GST) amounting to some $335,000 on a consignment of printed circuit boards for which a transhipment permit was taken up, but was not transhipped as declared.

The company had obtained six permits for the transhipment of the consignment of printed circuit boards through Singapore, entering from Malaysia by land via either the Woodlands or Tuas Checkpoint and departing by air via Changi Airfreight Centre.

GST is not payable on goods covered by transhipment permits.  However, the goods would have to be presented at the exit checkpoint within 24 hours after clearance at the entry checkpoint. If not, they would have to be moved to a zero-GST (ZG) warehouse where they can be stored with GST suspended. These conditions are imposed to ensure that the movement of goods covered by the transhipment permits are properly accounted for.

In violation of the transhipment permit conditions, the company moved the consignment of printed circuit boards to a local non-ZG warehouse after clearance at the entry checkpoint, and the goods remained there for about eight days before part of the consignment was sent back to Malaysia due to some quality issues.  

Transhipment Permits
As part of the conditions for transhipment of goods through Singapore, goods which are cleared at the entry checkpoint will have to be produced at the exit checkpoint within 24 hours. Goods which are unable to meet this condition will have to be stored at a licensed premise administered under one of Singapore Customs’ tax suspension schemes. Click here for the list of licensed premises. A breach of this condition will render the goods liable for GST payment.
For not complying with the transhipment permit conditions, the company was offered a composition of $300. In addition, GST amounting to $344,940.95 on the consignment, including the portion which was eventually re-exported to Malaysia, was recovered from the company by Singapore Customs.



 

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