GST Business: In-Depth Guide About the Major Exporter Scheme (Singapore)

The Major Exporter Scheme (MES) is part of Singapore’s GST framework designed to help businesses manage GST more easily. If your company imports and exports goods often, MES can reduce upfront GST costs and simplify your tax processes.

In this guide, we’ll explain how MES works and help you figure out if it’s the right fit for your business.

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What is the Major Exporter Scheme in Singapore?

The Major Exporter Scheme (MES) is a GST scheme formed by the Inland Revenue Authority of Singapore (IRAS) to help businesses better manage GST when they import and export goods.

Normally, businesses have to pay GST upfront when goods are imported into Singapore and only recover it later through input tax claims. The MES in Singapore eliminates this by allowing approved businesses to suspend GST at the point of import, meaning there is no need to pay GST upfront on qualifying imports.

To make it simple, the MES simplifies the process and improves cash flow for businesses involved in international trade.

What is the Major Exporter Scheme in Singapore? — *(Source: Envato)*

Who Should Apply for MES?

The Major Exporter Scheme in Singapore is not suitable for every business, but it is very beneficial for certain types of companies.

Businesses That Import and Export Frequently

MES is ideal for businesses that regularly bring goods into Singapore and export them again. By suspending GST at import, these companies can avoid paying GST upfront, improving cash flow and reducing administrative work in line with guidelines from IRAS.

Traders with Goods in Free Trade Zones (FTZs) or Bonded Warehouses

If a business stores goods in a Free Trade Zone (FTZ) or a bonded warehouse, MES can simplify the process of moving goods across borders. This is particularly helpful for businesses that handle goods in these special zones.

Expensive Goods That Move Frequently Across Borders

For businesses that deal with high-value goods that need to be moved frequently between countries, MES makes the logistics simpler and more cost-effective. This includes industries such as logistics companies, wholesale distributors, and manufacturers.

How Does the Major Exporter Scheme Works

Under the Major Exporter Scheme in Singapore, approved businesses are not required to pay GST when importing goods intended for re-export. Instead, GST is reported in their regular GST filings, rather than being paid upfront. This streamlines the overall process and improves cash flow.

Goods imported under MES can also be stored in bonded warehouses or Free Trade Zones (FTZs). These special zones allow businesses to store goods without incurring GST, simplifying inventory management and re-export processes.

Eligibility Criteria

To apply for the Major Exporter Scheme in Singapore, businesses must meet certain requirements set by the Inland Revenue Authority of Singapore (IRAS).

These conditions ensure that the scheme is only available to businesses that are compliant and actively involved in importing and exporting goods.

GST Registration

Your business must be registered for Goods and Services Tax (GST) in Singapore.

Active and Financially Stable

The business must be operating normally and be financially stable, meaning it can meet its financial obligations.

Significant Zero-Rated Supplies

You must meet one of the following criteria:

Over 50% of your total sales must qualify as zero-rated supplies, or
The total value of your zero-rated sales must exceed S$10 million in the last 12 months.

Note: Excludes goods subject to customer accounting, reverse charge services, or marketplace supplies.

Proper Record Keeping

Your business must have strong internal controls and keep accurate accounting records.

Eligibility Criteria — *(Source: Envato)*

How to Apply for MES

If you want to apply for or renew your Major Exporter Scheme status, here’s an easy-to-understand guide to help you through the process:

Step 1: Self-Review and Declaration

Review your activities using the Assisted Self-Help Kit (ASK) and submit the declaration form. This must be signed off by a tax expert accredited by the Singapore Chartered Tax Professionals (SCTP). If you have ACAP status, a Post-ACAP Review (PAR) form may be used instead.

Step 2: Prepare Required Documents

Ensure you have the following ready:

GST F10 Form: Shows trading numbers (in SGD) for a 12-month period selected from the last 18 months.
ASK Declaration Form: The certified form confirming your review and error corrections.

Step 3: For New Businesses or Changes in Activity

Estimate your trading numbers for the upcoming 12 months and explain your projections in the GST F10 Form. You may be required to provide a guarantee during this initial phase.

Step 4: Wait for the Result

The Comptroller of GST will review your application and typically notify you of the result within one month.

Step 5: MES Status Validity

Approved status is valid for three years. You must notify the Comptroller if you no longer meet the criteria, as failure to do so could result in your status being revoked.

Benefits of the MES

Let’s take a look at how the Major Exporter Scheme in Singapore can help businesses save time, money, and effort in managing their GST and exports activities.

Improved Cash Flow

By skipping the upfront GST payment, businesses can improve their cash flow and use their funds for operations such as purchasing inventory, paying staff, or expanding the business, instead of waiting for tax refunds.

Simplified Compliance

The Major Exporter Scheme in Singapore streamlines GST reports by aligning it with customs declarations. This reduces administrative workload, minimises errors, and creates a more efficient process for businesses dealing with imports and exports.

GST Savings

Businesses are able to save money by eliminating the need to pay GST upfront on qualifying imports and exports, helping to optimise working capital and reduce financial strain.

Who Can Help You Manage GST Reporting

Many businesses appoint declaring agents to handle customs and GST paperwork. Declaring agents act as intermediaries between your business and the authorities, ensuring compliance with MES guidelines. You’ll need to authorise them through proper documentation.

Conclusion

The Major Exporter Scheme in Singapore is a powerful tool for businesses navigating the complexities of GST in international trade. It simplifies compliance, saves money, and improves cash flow for exporters. If your business involves frequent cross-border trade, applying for MES could be a game-changer. Take the time to assess your eligibility and start your application journey today.