Singapore’s Goods and Services Tax is enforced at the point of sale by the end customer. This means that tourists also pay GST for all purchases they make while touring Singapore. However, the law allows tourists to claim back some of the money paid on GST for purchases that exceed S$100.

As a GST-registered business, you can get the authorization to provide GST refunds to tourists through the Tourist Refund Scheme (TRS). First, however, you have to register to offer these services. Here is everything you need to know about how the Tourist Refund Scheme works.

Not all GST-registered businesses qualify for the Tax Refund Scheme. Besides being registered for GST, applicants must also meet the following requirements:

• Maintain comprehensive business records and provide flawless and detailed accounting and book-keeping records.
• Have a good track record of tax compliance and payments.
• Proof of at least 5,000 tourist refund claims per month for the past 12 months.
• Access to a suitable system to operate in the eTRS environment.
• Solicitation of Central Clearing House and Central Refund Counter services.
• Compliance with all conditions set by the Inland Revenue Authority of Singapore (IRAS).

There are two ways for a GST-registered business to issue GST refunds to tourists: as an independent retailer or through soliciting the services of a Central Refund Agency. There are only three Central Refund Agencies at the moment:

• Global Blue Singapore Pte Ltd
• Global Tax Free Pte Ltd
• Tourego Pte Ltd

All tourist refund claims are processed digitally via the eTRS platform. This is an online platform that links central refund agencies to independent retailers. It provides access to the whole scheme so tourists can enjoy a seamless experience when making their applications. Operators must understand the platform and have the necessary resources to operate within it.

Before processing claims and issuing out refunds, a licensed eTRS operator has to verify that the applicant is a tourist and qualifies for the refund. Here is an overview of the set requirements.

To verify that the applicant is a tourist, check that:

• He/she was at least 16 years old at the time of purchase.
• He/she is not a citizen or permanent resident in Singapore.
• He/she is not a member of a crew of the airplane he/she will board when leaving Singapore.
• He/she is not a specified person, which means that he/she is in Singapore for the sole purpose of touring.

In addition to verifying that the applicant is a tourist, it is also important to verify that he/she qualifies for the program. The following conditions have to be met by eligible applicants:

• Request for the eTRS should be made with the retailer who sold the goods.
• The amount spent is at least S$100, including the GST – it is acceptable for the tourist to accumulate up to three same-day invoices with the same shop name and GST registration number.
• Application for the GST refund should be made at the eTRS kiosk at the airport under the tourist’s passport.
• The tourist should depart with the goods within two months since purchase and within 12 hours since getting approval for the refund application.
• The tourist must claim the refund within two months since the date of the application’s approval.

Services do not qualify for a GST refund under this scheme. However, most goods do. These include those consumed within the country. Goods due for export for both commercial and non-commercial purposes also qualify for GST refunds. Accommodation in any sort of premises also qualifies for a refund.

Once it is verified that the tourist’s claim for a GST refund is eligible, the licensed eTRF operator should proceed to process it. TRS services are available to tourists leaving the country at two points of departure: Changi International Airport and Seletar Airport.

There are three refund methods to choose from at each of these airports: credit card, Alipay, and cash refund for Changi International Airport or Bank Cheque for Seletar Airport. A refund via credit card takes ten days to process. Cash refunds and refund via Alipay are immediate. Bank cheques take about 14 days to process, depending on your bank.

As an eTRS operator, you are obliged to explain the refund claim process to the applicant before processing the claim. This is important to avoid any confusion on the tourist’s part.

The IRAS is stern about fraudulent tourist refund claims, and the eTRS platform is designed to identify and flag any suspicious claims. If a claim is flagged as suspicious, the IRAS is obligated to issue a search warrant. The IRAS works closely with the Singapore Customs officials to search flagged goods before approving a suspicious claim.

The inspection will be carried out by Singapore Customs officers before the claim is approved. If the claim is proven to be fraudulent, then the customs officers are authorized to arrest the applicant and enforce the set penalties. Penalties for filing a fraudulent claim include:

• Prosecution
• A fine of up to three times the amount of tax refunded
• A fine of up to $10,000, which can also be combined with a jail term of up to seven years

As such, it is important for tourists to get everything right when applying for a refund claim. It is also important for licensed eTRS operators to guide the applicants well through the entire process.

Singapore is one of the top tourist destinations in Asia. Tourists are welcome to indulge in everything the country has to offer, and they don’t have to pay GST taxes. The Tourist Refund Scheme is designed to enable tourists to claim their GST refunds for goods bought in Singapore. GST-registered businesses can process these claims, but they have to register with the eTRS and IRAS for licensing. This comprehensive guide should make the process flawless.

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