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Review GST rule on goods bought overseas

The Straits Times | Wednesday, Jun 4, 2014

Receipt showing the GST 7 per cent.

SINGAPORE - I read the Singapore Customs' online travel advisory on goods and services tax (GST) payable on shopping done abroad, and question the advisory's effectiveness and how Customs intends to enforce this law.

Singaporeans travel regularly and often bring back goods worth more than $600, without paying any GST.

There are many inherent difficulties in the policy to tax a traveller who shopped abroad.

The Customs website states that GST is payable for "new items brought in by a bona fide traveller" that include "new articles, souvenirs, gifts and food preparation which are for personal use and not meant for sale".

"New articles" imply goods that are unused, still in their packaging or with labels still attached and so on.

This suggests that travellers who wish to avoid paying GST merely need to use their articles before returning to Singapore, such as wearing their new clothes or start using the new gadget.

As a university exchange student who has been abroad for six months now, I have surely purchased goods worth more than $600, including clothing I have worn and books I have read.

Will they count as "new articles" upon my return to Singapore?

Another inherent difficulty would be where records are not kept. Singaporeans who shop in places such as Bangkok and Hong Kong may have made purchases with no receipts.

Travellers like myself who have been abroad for a much longer time also face the onerous duty of maintaining a record of all our purchases.

I understand that Customs officers are empowered to make an assessment where receipts are lacking. This may result in inaccurate assessments if these officers cannot tell luxury items from non-luxury ones.

The law on taxing shopping done abroad is too vague and difficult to police, short of causing massive congestion at Customs checkpoints.

The Government should review this law - either to repeal it for its vagueness or to issue better guidelines on its implementation.

Trent Ng Yong En 


This article was first published on June 2, 2014.
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