As a premier global logistics and trading hub, Singapore offers myriad ways for businesses to optimize their supply chains. The Zero GST (ZG) Warehouse Scheme allows approved businesses to store qualifying imported non-dutiable goods in a licensed ZG warehouse with GST suspended.

This means import GST is generally not payable while the goods remain in the ZG warehouse. GST becomes payable when the goods are removed from the warehouse for local use or consumption. Goods that are subsequently exported may leave the warehouse without import GST, subject to the applicable requirements.

What is the Zero-GST Warehouse Scheme?

The Zero-GST Warehouse Scheme permits approved businesses to store imported, non-dutiable goods in a designated area licensed by Singapore Customs, with GST fully suspended while the goods remain in the warehouse.

Unlike paying GST upfront upon importation and subsequently going through the administrative process of claiming it back, the ZG Warehouse Scheme helps businesses avoid unnecessary cash flow being tied up in GST payments.

Qualifying goods can generally remain in the ZG warehouse for an indefinite period, subject to the scheme’s requirements and conditions.

How Does the Scheme Work?

Under the ZG Warehouse Scheme:

• Imported goods stored in a ZG warehouse – GST is suspended.
• Goods removed for local sale or consumption – Import GST becomes payable.
• Goods exported overseas – No import GST is payable, subject to the required export documentation.
• Goods transferred to another ZG warehouse – GST remains suspended, subject to the relevant conditions.

Benefits of the ZG Warehouse Scheme

The scheme can be particularly beneficial for businesses that import and re-export goods. Key benefits include:

• Improved Cash Flow

GST is suspended while goods remain in the warehouse, reducing the need for upfront GST payment.

• Support for Regional Trading

Businesses can store imported goods in Singapore before deciding whether to sell them locally or export them overseas.

• Greater GST Efficiency

Import GST is only triggered when qualifying goods are released for local consumption.

Who Can Apply?

To qualify for a ZG warehouse licence, businesses must satisfy criteria set by Singapore Customs and the Inland Revenue Authority of Singapore (IRAS):

• GST Registration: The applicant must be a GST-registered entity with IRAS.
• Customs Account: Must maintain a valid and active Singapore Customs account.
• Compliance Record: Importers must demonstrate a clean track record of regulatory compliance with both Singapore Customs and IRAS.
• Facility Security & Control: The storage facility must meet stringent physical security requirements, including 24/7 CCTV surveillance, controlled access points, and clearly defined boundaries. In addition, the applicant must have legal authority and control over the premises, such as through a direct tenancy agreement.

Zero-GST Warehouse Scheme vs. Major Exporter Scheme (MES):

What’s the Difference?

Both the Zero-GST Warehouse Scheme (ZGS) and Major Exporter Scheme (MES) help businesses manage cash flow by suspending import GST, but they serve different business and operational needs:

• Zero-GST Warehouse Scheme (ZGS): This scheme is linked to a specific physical warehouse facility. It is suitable for businesses that need to store imported goods in Singapore for regional distribution, re-export, or eventual release into the local market.
• Major Exporter Scheme (MES): This is a company-level GST scheme rather than a warehouse-based arrangement. It is generally suitable for businesses that import and re-export significant volumes of goods through their normal supply chain, without necessarily storing the goods in a dedicated ZG-licensed warehouse.

Is the Zero-GST Warehouse Scheme Suitable for Your Business?

If your business regularly imports, stores and re-exports non-dutiable goods, the Zero-GST Warehouse Scheme may help improve cash flow and provide greater flexibility in managing inventory. Businesses should assess their transaction flows, inventory controls and GST obligations before applying.

For more information, please refer to the latest requirements from Singapore Customs and IRAS, or consult a professional adviser to determine whether the scheme is suitable for your business.