Major Exporter Scheme (MES)

Purpose

Major Exporter Scheme (MES) is designed to ease the cash flow of businesses that import and export goods substantially.

Under normal rules, the businesses have to pay GST upfront on imports and subsequently obtain a refund from IRAS after submission of their GST returns.

This can create cash flow problems for businesses that export goods substantially as no GST is collected from the zero-rated supplies to set-off their initial cash outflow on imports.

Businesses granted the MES are able to import non-dutiable goods with GST suspended. Effective from 1 Jul 2006, such businesses also enjoy GST suspension on goods removed from a Zero GST warehouse.

Using MES

MES is granted when you import goods under the following scenarios:

1. Import your own goods in the course or furtherance of your business;
2. Import goods belonging to your overseas principal for sale in Singapore or re-export on behalf of the overseas principal, in the course or furtherance of the business (i.e. you are acting as a Section 33(2) agent);
3. Import goods belonging to your overseas principal which will later be re-exported (e.g. back to your overseas principal) if the requirements for section 33A agent in the GST: Guide on Imports (PDF, 382KB) are satisfied; or
4. (From 1 Jan 2015) Re-import goods which you previously sent abroad for value-added activities, belonging to your local customer or GST-registered overseas customer if the requirements under section 33B explained in GST: Claiming of GST on re-import of value-added goods (PDF, 565KB) are satisfied.

For (2) and (3) above, you must ensure that:

1. Your overseas principal is not registered for GST;
2. You keep separate records for goods belonging to your overseas principal;
3. You have control over the custody and possession of the goods owned by your overseas principals at all times; and
4. You treat any subsequent supply of goods as being made by you:
   1. When you sell the goods locally, you should standard-rate the supply; and
   2. When you export the goods and maintain the required export evidence, you may zero-rate the supply.
      For the types of export evidence to maintain under each export scenario, refer to GST: Guide on Exports (PDF, 717KB) and GST: Guide on Hand-Carried Exports Scheme (PDF, 332KB).

Qualifying conditions

In order to qualify for MES, you have to fulfill all the conditions below:

1. Your business must be GST-registered
2. Your business must be active and financially solvent
3. You have been importing or will be importing goods for your business purpose
4. Your zero rated supplies must account for more than 50% of the total supplies, or the value of your zero-rated supplies is more than S$10 million for the past 12 months. For the purpose of arriving at the value of total supplies, please exclude the following which have been reported as your standard-rated supplies:
   1. The value of relevant supplies received from your supplier that were subject to customer accounting
   2. The value of imported services and low-value goods subject to reverse charge
   3. The value of remote (digital and non-digital) services and imported low-value goods supplied by an electronic marketplace operator on behalf of suppliers listed on its platform under the overseas vendor registration regime
5. You maintain good internal controls and proper accounting records
6. You maintain good compliance records with IRAS such as:
   1. Filing GST and income tax returns on time
   2. Paying GST, income tax, property tax and withholding tax on time
7. You maintain good compliance record with Singapore Customs
8. You comply with other conditions that Comptroller of GST may impose from time to time

For more details on the qualifying conditions, please refer to Major Exporter Scheme (PDF, 298KB).

Applying for MES

To apply:

1. Complete and submit this Form GST F10: Application for Major Exporter Scheme; and
2. Either,
   1. Perform a self-review* using the Assisted Self-Help Kit (ASK) and submit the certified ASK declaration form "ASK: Declaration Form on Completing Annual Review & Voluntary Disclosure of Errors" (Section 3 of ASK); or
   2. Commit/ Have committed to participate in the Assisted Compliance Assurance Programme (ACAP); or
   3. Perform a Post ACAP Review (PAR) and submit the "PAR Declaration" form (GST F28) for business with a valid ACAP status.  

*For new companies or business with a change in business activity, you will have to undertake to complete the ASK review and provide the certified ASK within 1 year from the approval of the scheme.

Certified ASK or ACAP

1. Perform a self-review using the Assisted Self-Help Kit (ASK).

   The ASK Annual Review must either be performed by:

   1. An individual accredited with Singapore Chartered Tax Professionals Limited^ ("SCTP") as Accredited Tax Advisor (GST) [ATA (GST)] or Accredited Tax Practitioner (GST) [ATP (GST)]; or
      
   2. The GST-registered business and certified by an individual accredited with SCTP as ATA (GST) or ATP (GST), in adherence to the certification procedures set out in the GST ASK Annual Review Guide (PDF, 1458KB).

      ^ The ATA (GST) or ATP (GST) may either be an in-house staff or external party. For more information on accreditation, please visit http://www.sctp.org.sg/.

2. Commit/Have committed to participate in the Assisted Compliance Assurance Programme (ACAP).

   For successful ACAP applicants, you do not need to submit the ASK declaration form pending the result of ACAP review and submission of ACAP Report.

   For more information on ACAP, please refer to the e-Tax guide (PDF, 1,744KB).

3. Perform a Post ACAP Review (PAR) and submit the "PAR Declaration" form (GST F28) for business with a valid ACAP status. 

   For businesses with valid ACAP status, the ASK declaration form is also not required, if you perform a PAR and submit the "PAR Declaration" form (GST F28).

   For more information on PAR, please refer to the Information Leaflet on Post ACAP Review (Appendix 2) of e-Tax guide on ACAP  (PDF,  1,744KB).

Guarantee

A guarantee from a financial institution may be required before approval is granted.

Validity of MES

Once your application is approved, you will receive a notification on the effective date of approval of your MES and validity period which is usually 3 years.

Your MES will be revoked any time if you fail to satisfy any of the MES qualifying conditions.

Renewing MES

1.  Receive renewal invitation letter

When your MES is due for review and you continue to satisfy the qualifying conditions, a letter will be sent to invite you to apply for renewal of your MES.

2.  Submit Form R1 with certified ASK

You are required to submit the Form R1 online via myTax Portal together with the certified ASK within the due date stated in the renewal letter.

3.  Wait for approval in writing

IRAS will inform you in writing of the outcome of the review. Your MES will continue to be valid pending the outcome.

4.  Submit letter of guarantee (if required)

During the renewal, the requirement of a letter of guarantee will also be reviewed. You will be informed if a letter of guarantee is required.

5.  Validity of MES

To reduce the compliance costs for businesses, the validity period for successful renewal of MES has been extended up to five years from the current three years. This change applies to all businesses who renewed their MES since Jan 2013 where a certified ASK has been submitted as part of the renewal application process.

New applications will still have a validity period of three years and their first renewal will be in the third year of the validity period.

Appointing declaring agents

As an approved MES person, you are able to authorise up to 20 declaring agents (e.g. freight forwarders) to clear the goods on your behalf.

You are accountable for all permits declared by your declaring agents. Therefore, we advise that you exercise due care and do not appoint more declaring agents than necessary.

To appoint/change/delete agents, use the online e-Service "Apply for Declaring Agents" at mytax.iras.gov.sg. Your request will be effected in the next two working days.

Reporting in GST returns

1. Importing goods

When you import goods (including goods belonging to your overseas principals who are not GST-registered) under MES, you should declare the value of imports in:

1. Box 5 (Total value of taxable purchases); and
2. Box 9 (Total value of goods imported under Major Exporter Scheme/ Approved 3rd Party Logistics Company Scheme or Other Approved Schemes).

Declarations must be supported by valid ME permits and relevant supporting documents (e.g. commercial invoices and appropriate shipping documents). 

2. Zero-GST (ZG) warehouses

When you import goods (including goods belonging to your overseas principal) into a  Zero GST (ZG) warehouse, you must declare the imports in your GST return despite the suspension of GST. 

When the goods are later removed from ZG warehouse into customs territory under MES,  you should declare the value of goods removed in:

1. Box 5 (Total value of taxable purchases); and
2. Box 9 (Total value of goods imported under Major Exporter Scheme/ Approved 3rd Party Logistics Company Scheme or Other Approved Schemes).

They must be supported by valid ME / MC / Customs permits and relevant supporting documents (e.g. commercial invoices and appropriate shipping documents). 

Easing compliance

The TradeXchange Repository Service provides an online platform for the consolidation of relevant trade documents, to help businesses meet the recordkeeping requirements for imports and exports with greater ease. Uploading documents on this platform reduces the efforts in manually matching your permits with other documents in support of your trade activities.

FAQs