You import goods, sell them overseas and charge your customers no GST. At the border you still pay 9% import GST. Nothing comes in from customers to offset this payment. Your cash sits with IRAS until you recover the tax.
Why exporters feel this squeeze
Exports are zero-rated at 0% GST, provided you hold or will hold the export documents. Zero-rating lets you claim input tax in full, so your returns show tax to recover rather than tax to pay. The delay comes from timing. You pay import GST at once and recover the tax through the return.
A worked example
Your company imports goods worth S$500,000 in each of three months. Import GST at 9% is S$45,000 each month. Over the quarter, S$135,000 leaves your bank account. You then sell the goods abroad at 0% GST and charge no output tax.
You file a GST return within 1 month after the quarter ends. A quarter to 30 September is due on 31 October. The July import waits longest for recovery. For a small exporter, S$135,000 of idle cash is a real strain on stock purchases and wages.
The Major Exporter Scheme
This scheme suspends GST on imports, so you do not pay the S$45,000 at the border. The IRAS guide (18th edition, 3 August 2026) sets the conditions:
– Zero-rated supplies above 50% of your total supplies, or above S$10 million, over 12 months. The guide also gives a route for exempt supplies within the de minimis limit.
– An active, solvent company with good controls.
– An Assisted Self-Help Kit (ASK) declaration, unless you are in ACAP.
If your company qualifies, the S$135,000 in the example stays in your bank.
The Import GST Deferment Scheme
This scheme defers the import GST until you file your return. You still account for the tax, but later. The IRAS guide (11th edition, 30 January 2026) sets the conditions:
– GST-registered for at least 3 years, with a shorter period approved in some cases.
– Monthly GST filing.
– Payment by GIRO.
– An ASK declaration, unless you are in ACAP.
An exporter with less than half of its sales zero-rated, or an exporter below the Major Exporter thresholds, looks here first.
Third-party logistics
An approved third-party logistics scheme also exists for imports. Ask your accountant whether your freight and warehouse set-up fits.
Steps to take now
– Total your import GST for the past 12 months. This is the cash the schemes would have kept in your bank.
– Compare your zero-rated share of total supplies with the 50% and S$10 million tests.
– Run the ASK annual review. IRAS builds scheme approvals on this review.
– File early. GST recovery follows the return, so a return filed in week 1 beats one filed in week 4. Late filing costs S$200 at once plus S$200 per completed month, up to S$10,000 per return.
– Keep export documents for 5 years.
Send your latest profit figure or your question by WhatsApp to +65 9876 3553 or by email to henry@cschow.com.sg.
Henry Chow
Public Accountant, C S Chow & Co