Navigate Hand-Carried Exports with Ease

Hand-Carried Exports Scheme (HCES)

Navigate Hand-Carried Exports effortlessly with BluTrust’s comprehensive guide. From securing permits to GST management, we simplify Singapore Customs processes for businesses.

What HCES Doesn’t Cover

At BluTrust Pte. Ltd., we want to make your export process as smooth as possible. Please note that the Hand-Carried Exports Scheme (HCES) does not apply to goods leaving Singapore via:

– Sea routes
– Land routes
– Seletar Airport

To qualify for zero-rated GST on these exports, ensure you maintain all required export documentation, as outlined in our comprehensive GST Export Guide.

How to Utilize HCES with BluTrust Pte. Ltd.

Step 1: Secure Your Export Permit

If you’re exporting goods through Changi International Airport, you’ll need a valid export permit. This is mandatory, irrespective of the value or quantity of the goods. You can either register for a TradeNet account yourself or let us, your trusted declaring agent, handle it for you.

Step 2: Customs Inspection Made Easy

The individual carrying the goods out of Singapore must present the following items to Singapore Customs at the airport:

– A valid export permit

– A supporting invoice 

– Proof of intent to leave Singapore (e.g., boarding pass or confirmed air ticket)

Singapore Customs will digitally endorse the export permit upon verification.

Step 3: Exiting Singapore

The carrier must leave Singapore with the goods, either in hand-carry or checked-in luggage, within 12 hours of receiving the digital endorsement from Singapore Customs.

Step 4: Document Retention

To validate your zero-rated GST claim under HCES, you must keep the following documents for 60 days from the time of supply:

– Invoice 

– Digitally endorsed export permit

– Proof of payment received from your overseas customer

– Evidence of GST refund to the customer, if applicable

Digital Transformation in HCES

As of January 3, 2023, Singapore Customs will only digitally endorse HCES export permits. You’ll receive an electronic clearance status via your Networked Trade Platform (NTP) account. To use this service, make sure you have an active NTP account and are subscribed to the HCES digital service.

Handling GST with BluTrust Pte. Ltd.

Scenario A: Received Endorsed Export Permit

Report the sale as a zero-rated supply.

Ensure you have:

– Refunded the GST to your overseas customer

– Retained all necessary documents

Scenario B: Endorsed Export Permit Not Yet Received

Initially, report the sale as a standard-rated supply. Once you receive the endorsed export permit, you can adjust your GST return to claim back the output tax.

Special Exemptions

If you’re unable to present the goods for inspection due to specific commercial reasons, you may apply for an exemption from HCES.

For additional details, please refer to Singapore Customs’ Notice 01/2023 and their Exporting Hand-Carried Commercial Goods webpage.

We at BluTrust Pte. Ltd. are here to assist you every step of the way. Feel free to reach out to us for any further clarification or assistance.

Capital Allowances

Deductions for the decline in value of depreciating assets are available under the Uniform capital allowance (UCA) system. In addition to the rules for depreciating assets, deductions are allowed for certain other capital expenditure.

Small business entities have the option of choosing simplified depreciation rules. Under these rules, small business entities can claim an immediate deduction if the cost is below the relevant threshold or else add the asset to the small business depreciation pool.

Land, trading stock and most intangible assets (excluding exceptions such as intellectual property and in-house software) are not depreciating assets.

The decline in value is generally calculated by spreading the cost of the asset over its effective life, using one of two methods:

Prime cost method – decline in value each year is calculated as a percentage of the initial cost of the asset
Diminishing value method – decline in value each year is calculated as a percentage of the opening depreciated value of the asset
MORE: Australian Taxation Office (ATO) Decline in value calculator.

For most depreciating assets, taxpayers can either self-assess the effective life, or use estimates published by the ATO. Taxpayers can recalculate, either up or down, the effective life of an asset if the circumstances of use change and the effective life initially chosen is no longer accurate. An improvement to an asset that increases its cost by 10% or more in a year may result in an obligation to recalculate the effective life of the asset.

Decline in value of cars is restricted to the car limit. From 1 July 2022, the luxury car tax threshold for luxury cars is $64,741 (it was $60,733 for the year commencing 1 July 2021). Luxury car leases are treated as a notional sale and purchase, with decline in value restricted to the car limit.

The decline in value of certain depreciating assets with a cost or opening adjustable value of less than $1,000 can be calculated through a low-value pool. The decline in value for depreciating assets in the pool is calculated at an annual diminishing value rate of 37.5%.

Changes for 2022 and 2023

From 12 March 2020 until 31 December 2020, the asset cost threshold for the instant asset write-off (which is usually only available to small business entities) has increased from $30,000 to $150,000 and the eligibility criteria expended to cover entities with an aggregated turnover threshold of less than $500 million (up from $50 million).

Further, from 12 March 2020 until 30 June 2021 the Backing business investment measure applied to businesses with aggregated turnover below $500 million and provides either:

A deduction of 50% of the cost or opening adjustable value of an eligible asset on installation (existing depreciation rules apply to the balance of the asset's cost), or
For businesses using a small business depreciation pool, a deduction of 57.5% of the cost of the asset in the first year, with the balance added the asset to the small business pool
In addition, from 6 October 2020 to 30 June 2023, full expensing applies to allow eligible businesses with an aggregated turnover of less than $5 billion to deduct the full cost of new eligible depreciating assets. For businesses with aggregated turnover of less than $50 million, full expensing also applies to eligible second-hand assets.

Activity Statement

Businesses use activity statements to report and pay a number of tax obligations, including GST, pay as you go (PAYG) instalments, PAYG withholding and fringe benefits tax. Non-business taxpayers who need to pay quarterly PAYG instalments also use activity statements.

Activity statements are personalised to each taxpayer to support reporting against identified obligations.

Activity statements for businesses may be due either quarterly or monthly. Generally, businesses can lodge and pay quarterly if annual turnover is less than $20 million, and total annual PAYG withholding is $25,000 or less. Businesses that exceed one or both of those thresholds will have at least some monthly obligations. Non-business taxpayers are generally required to lodge and pay quarterly.

Taxpayers with small obligations may be able to lodge and pay annually. Some taxpayers may receive an instalment notice for GST and/or PAYG instalments, instead of an activity statement.

The Australian Taxation Office (ATO) web site provides instructions on lodging and paying activity statements. Detailed instructions are provided for each of the different tax obligations:

GST (Goods and Services Tax)
PAYG (Pay As You Go) Instalments
PAYG (Pay As You Go) Withholding
FBT (Fringe Benefit Tax)
LCT (Luxury Car Tax)
WET (Wine Equalisation Tax)
Fuel Tax Credits