Search
  • Choon Ng

First Freight Forwarder fined by IRAS for misusing Major Exporter Scheme


A freight forwarding company, Kian Min Express Transport Pte Ltd, is the first company to be penalised by IRAS for misusing its Major Exporter Scheme (“MES”) status. The MES is a special scheme that allows for the suspension of GST at the point of importation of goods. The company was fined $24,000 on 12 charges of failure to comply with the MES’ conditions imposed by the IRAS.

Generally, the approved MES business must comply with the following conditions:

1. Import only own goods into Singapore; 2. Not allowed to import goods into Singapore using its MES status on behalf of any other Singapore companies; and 3. Must have control over the custody and possession of the goods imported into Singapore. Failure to comply with MES conditions Kian Min Express used its MES status to enable two freight forwarders, Soon Brother’s Transport & Shipping Service (“SBT”) and Narita Carrier Logistic (“NCL”), to import goods into Singapore without paying GST from July 2007 to December 2008. The total amount of GST not paid on the goods imported by SBT and NCL was close to $4 million.

SBT and NCL are required to pay GST to Singapore Customs on importation of goods into Singapore. However, Kian Min Express helped SBT and NCL bring their goods into Singapore GST-free by using its MES status when it also did not have control over the custody and possession of those goods imported by SBT and NCL. Kian Min Express’ only role in the importation of the goods was to complete paper declarations of the MES permits to facilitate their import. In return, Kian Min Express charged SBT and NCL a fee for each of the MES permit declarations made on their behalf.

IRAS takes a serious view on abuse of MES Inland Revenue Authority of Singapore (IRAS) takes a serious view of taxpayers who do not comply with the requirements of the scheme or wilfully abuse the scheme, and will not hesitate to bring the offenders to court.

The abuse of the scheme by offenders who facilitate the import of goods belonging to unauthorised third parties without paying GST can lead to leakage to GST revenue.

Source: IRAS


61 views0 comments

Recent Posts

See All

GSTax Consultancy featured in "Best in Singapore"

We chanced upon this feature and would like to thank the team at "Best in Singapore" for their vote of confidence and kind recognition. https://www.bestinsingapore.co/best-tax-consultants-singapore/ A

GST returns extended from 30 Apr to 11 May 2020

In light of the latest measures that the government has introduced to combat COVID-19 last week, the filing due date for all GST returns due in Apr 2020 will be automatically extended to 11 May 2020.

IRAS releases new video on input tax

Common errors on input tax claims explained using an info video from IRAS Around 3,000 GST-registered businesses are selected by the IRAS for audit every year. The most common mistakes discovered are