Singapore receives many tourists every year and the Singapore government has stressed the importance of visitors enjoying a good shopping experience as well as a hassle-free GST refund claim process.
Generally, purchases of goods and services in Singapore from GST-registered retailers are subject to GST at 7%. However, a GST refund is available to tourists on goods purchased from GST-registered retailers operating under a Tourist Refund Scheme. All goods on which GST is charged (standard-rated goods) are eligible for GST refund except:
- Goods wholly or partly consumed in Singapore.
- Goods exported for business or commercial purposes.
- Goods that will be exported by freight.
- Accommodation in a hotel, hostel, boarding house, or similar establishments.
- Services are not eligible for GST refund under the TRS.
All GST-registered retailers may choose to operate the TRS on their own (as independent retailers) or engage the services of Central Refund Agencies – of which there are currently four (4) CRAs in Singapore. GST-registered retailers who choose to offer GST refunds to tourists under the TRS may apply to do so, albeit only via an electronic TRS system.
Under the eTRS system, tourists who wish to seek a refund of GST for their purchases are no longer required to fill out the different refund forms issued by the participating retailers at each retail outlet. Instead, all relevant purchases are captured and verified through the eTRS system managed centrally by IRAS and administered by the CRAs and IRs. The participating retailers will verify the status of the tourists and issue the relevant eTRS ticket (or the tourist can use their credit or debit cards as eTRS tokens) through the eTRS system to the eligible tourists at the point of sale. Subsequently, the tourists may apply for the relevant GST refunds using the eTRS self-help kiosk using the eTRS ticket or eTRS token when they exit Singapore via Changi International Airport or Seletar Airport.
Note that all the CRAs and IRs have to seek approval from the Inland Revenue Authority of Singapore (IRAS) before they can participate directly in the eTRS. There are specific conditions applicable to tourists in respect of the tourist refunds, and the CRAs and IRs also need to meet detailed conditions and technical systems requirements before they can apply to operate under the eTRS system directly. The details are discussed in the administrative guide on eTRS released by IRAS which has recently been updated (November 2017).
For GST-registered retailers that do not wish to be an IR and set up their own system to link up directly to the eTRS central system managed by IRAS (ie, Central Clearing House), such retailers can still engage the services of the CRAs to participate under the TRS and there is no requirement to seek any specific approval from the IRAS.
The eTRS system allows the IRAS to detect any unusual claim promptly through an online central system. IRAS takes a serious view of anyone who willfully make false declarations to seek GST refunds under the TRS or abuse the scheme. Further, as a control measure, physical inspection of the goods may be carried out by Singapore Customs officers at the departure points before a GST refund claim is approved.