1. The GST treatment for the logistics and forwarding industry are a little more complicated owing to the nature of the industry. Generally, the industry provides three main type of services – transportation, handling and storage. In Singapore, this three type of services are mainly provided to customers within or outside of Singapore and within or outside of Free Trade Zones.
2. Like all other GST-registered businesses, all supplies of services made in Singapore in the course of your business are subject to GST at the prevailing rate. Charging GST at 0% for supply of logistics and forwarding services is allowed only if the supply fulfils specific conditions as an international service under Section 21(3) of the GST Act.
3. For transportation services, there can be sub-categorised to local/International transportation and local/overseas customers. Where local transportation services are provided within Singapore to a local/overseas customer, GST has to be charged at the standard-rate. For example, if a local transport services were provided for goods transported from Jurong to a Tanjong Pagar, the logistic company has to charge GST for its services supplied to the local customer.
4. Whereas in the case of international transportation, the same local transportation services mentioned above can be zero-rated if it forms part of international transportation services. For example, if the logistics company provide international transportation of the goods from Malaysia to Singapore and local transportation from Woodlands (point of import) to the customer’s warehouse in Jurong (first destination in Singapore). The total value of the local and international transportation services provided to the customer can be charged at GST 0%. When the same goods is transported from the Jurong warehouse to another location in Singapore, GST has tp be charged for the transportation services supplied in Singapore.
5. For handling services, GST generally has to be charged at the standard rate if it is provided within Singapore. In order for handling services to be zero-rated, it only applies in the following scenarios:
- it is supplied to an overseas customer on goods for export
- it is supplied to and directly benefitting an overseas person in business capacity for the first leg of import, form point of import to first destination in Singapore
- it is supplied together with both international and local transportation services by same supplier
6. For storage services, GST generally has to be charged at the standard rate if it is provided within Singapore. In order for storage services to be zero-rated, it only applies in the following scenarios:
- It is supplied at the first leg of import, from point of import to first destination in Singapore and are supplied to and directly benefitting an overseas person in business capacity, where the supplier must also provide transportation services for the first leg.
- It is supplied to an overseas customer (in business or personal capacity) on goods for export.
7. As you can see, it is important to be clear on the GST principles and the GST treatment of some of the common services provided by the logistics service industry. Generally, all supplies of services made in Singapore are subject to GST at the prevailing rate. Charging GST at 0% on the supply of logistics services only if it fulfils specific conditions that qualify as an international service under Section 21(3) of the GST Act.
8. Please contact us if your company is GST-registered and are in the
business of providing logistics services such as transportation, goods
handling and need assistance to comply with the GST Act. At PL Biz Consulting Pte Ltd, we have the expertise and experienced people to guide you on how to equipped your business to meet the requirements of Singapore GST for the logistics services industry.
