Regulation 46
Approved contract manufacturer and trader scheme
of Goods and Services Tax (General) Regulations 1993
Subregulation 1
A taxable person may apply to the Comptroller to be an approved contract manufacturer, and the Comptroller may approve such application if the taxable person satisfies the Comptroller that —
the taxable person is in an industry approved by the Comptroller to apply to or carry out on goods any process under a contract with and directly benefitting an overseas person;
the total value of the supplies made by the taxable person comprising the processing of those goods under a contract with and directly benefitting an overseas person —
is not less than such amount as the Comptroller may determine; or
is not less than such proportion of the annual turnover of the taxable person as the Comptroller may determine;
the total amount or proportion of specified goods which are —
exported by the taxable person; or
delivered by the taxable person to an approved person,is not less than such amount or proportion as the Comptroller may determine;
the taxable person’s accounting and internal control systems meet such accounting standards as the Comptroller may require; and
the taxable person is able to comply with such other conditions as the Comptroller may impose for the protection of revenue.
Subregulation 2
Subject to paragraph (5), where a taxable person is an approved contract manufacturer —
goods from outside Singapore which —
enter Singapore under customs control; and
are removed from customs control into the customs territory by the taxable person (and accordingly imported by the taxable person) in the course or furtherance of any business carried on by the taxable person,not being goods which are subject to a duty (whether customs duty or excise duty or both), may be removed without payment of the tax chargeable on the importation of the goods; and
the supplies that the taxable person makes, which comprise any process being applied to or carried out on goods under a contract with and directly benefitting an overseas person, must be disregarded for the purposes of the Act if the Comptroller is satisfied that, after the process has been applied to or carried out on the goods —
the taxable person —
delivers the goods to an approved person or to a customer of the overseas person; or
exports the goods; or
where the goods are of an unsatisfactory standard or quality or are in excess of the amount required, the taxable person or any other person destroys or disposes of the goods.
Subregulation 3
The reference in paragraph (2)(a) to goods that are imported by the taxable person in the course or furtherance of any business carried on by the taxable person includes goods which are consigned to the taxable person as recipient —
in order for the taxable person to make supplies (other than supplies referred to in section 22 of the Act) using or in relation to those goods, if the conditions of regulation 42A(1)(a), (b) and (c) are satisfied, with —
the reference to owner in that regulation read as a reference to the person who consigned the goods to the taxable person; and
the reference to importer in that regulation read as a reference to the taxable person; and
for the purposes of applying to or carrying out on goods any process under a contract with and directly benefitting an overseas person and, after application or carrying out of the process, the goods are, to the satisfaction of the Comptroller —
exported by the taxable person;
delivered by the taxable person to an approved person or to a customer of the overseas person; or
where the goods are of an unsatisfactory standard or quality or are in excess of the amount required, destroyed or disposed of by the taxable person or any other person.
Subregulation 4
The reference in paragraph (2)(a) to goods that are imported by a taxable person in the course or furtherance of any business carried on by the taxable person includes goods in respect of which that taxable person would be entitled to claim the tax paid or payable on the importation of the goods as input tax under regulation 42B.
Subregulation 5
Paragraph (2) does not apply if, at the time of the importation or supply in question, the taxable person does not satisfy the requirement set out in paragraph (1)(a).
Subregulation 6
Where —
goods are supplied to an overseas person in Singapore and delivered to an approved contract manufacturer for the purposes of applying to or carrying out on the goods any process under a contract with and directly benefitting an overseas person; and
after the process has been applied to or carried out on the goods —
the approved contract manufacturer delivers the goods to an approved person or to a customer of the overseas person;
the approved contract manufacturer exports the goods; or
the approved contract manufacturer or any other person destroys or disposes of the goods, where the goods are of an unsatisfactory standard or quality or are in excess of the amount required,to the satisfaction of the Comptroller, then the goods are treated as having been supplied to the approved contract manufacturer in the course or furtherance of the approved contract manufacturer’s business.
Subregulation 7
Where paragraph (6) applies, the approved contract manufacturer is also entitled to claim under section 19 of the Act a deduction of input tax on the deemed supply referred to in paragraph (6) as if the whole of the input tax were allowable under section 20 of the Act, if —
the approved contract manufacturer pays the tax on the deemed supply of goods; or
the overseas person pays the tax on the supply of goods to the overseas person in Singapore, and the approved contract manufacturer makes a refund to the overseas person of the amount of the tax.
Subregulation 8
A taxable person may apply to the Comptroller to be an approved logistics company, and the Comptroller may approve such application if the taxable person satisfies the Comptroller that —
the taxable person is appointed as an agent of an overseas person for the purpose of distributing specified goods;
the taxable person receives specified goods from an approved contract manufacturer which the taxable person subsequently —
delivers on behalf of the overseas person to another approved contract manufacturer or a customer of the overseas person; or
exports;
the total amount or proportion of the specified goods received by the taxable person and which is exported by the taxable person is not less than such amount or proportion as the Comptroller may determine;
the taxable person’s accounting and internal control systems meet such accounting standards as the Comptroller may require; and
the taxable person is able to comply with such other conditions as the Comptroller may impose for the protection of revenue.
Subregulation 9
Every application made under paragraph (1) or (8) must —
be made in such form as the Comptroller may determine; and
give a full and true account of the particulars or information furnished.
Subregulation 10
The Comptroller may approve an application made under paragraph (1) or (8) on such conditions or with such requirements as the Comptroller may, in the Comptroller’s discretion, impose.
Subregulation 11
The Comptroller may, in granting approval under paragraph (1) or (8), require the taxable person to —
furnish security in such form and amount; and
make arrangements for the payment of tax,as the Comptroller may determine.
Subregulation 12
An approval granted under paragraph (1) or (8) has effect for such period as the Comptroller may determine.
Subregulation 13
An approved person must immediately notify the Comptroller of any change in particulars furnished, the security given, or the arrangements for the payment of tax.
Subregulation 14
Unless the Comptroller otherwise allows or directs, even though no tax is payable, an approved contract manufacturer must account for the importation of goods in the approved contract manufacturer’s return made under the Act for the period in which the importation occurred.
Subregulation 15
Where an approved contract manufacturer receives specified goods from an approved person, the approved contract manufacturer must account for and pay the tax as if the approved contract manufacturer had himself, herself or itself supplied the goods in the course or furtherance of the approved contract manufacturer’s business.
Subregulation 16
Where an approved logistics company receives specified goods from an approved contract manufacturer, the approved logistics company must account for and pay the tax as if the approved logistics company had himself, herself or itself supplied the goods in the course or furtherance of the approved logistics company’s business.
Subregulation 17
For the purposes of paragraphs (15) and (16) —
the supply of the specified goods must be regarded as taking place whenever the approved contract manufacturer or approved logistics company (as the case may be) receives the goods; and
the value of the goods is —
where known, the market value of the goods; or
where the market value of the goods is not known, a value determined by the Comptroller.
Subregulation 18
Unless the Comptroller otherwise allows, where a process has been applied to or carried out on goods by an approved contract manufacturer under a contract with and directly benefitting an overseas person, and —
the approved contract manufacturer delivers the goods on behalf of the overseas person to a customer of the overseas person;
an approved logistics company (having received the goods from the approved contract manufacturer) delivers the goods on behalf of the overseas person to a customer of the overseas person; and
where the goods are of an unsatisfactory standard or quality or are in excess of the amount required, the goods are destroyed or disposed of by the approved person or any other person, and consideration is received by the approved person or the overseas person upon the destruction or disposal,then the approved person must account for and pay the tax on the supply of goods in substitution for the overseas person.
Subregulation 19
For the purpose of paragraph (18), the time of supply of the specified goods must be treated as taking place at the earliest of the following times:
whenever the goods are delivered to the customer of the overseas person;
whenever the approved person receives payment in respect of the supply;
whenever the approved person issues an invoice relating to the supply;
in the case of goods that are of an unsatisfactory standard or quality or are in excess of the amount required, whenever the approved person or overseas person receives the consideration upon the destruction or disposal of the goods.
Subregulation 20
For the purposes of this regulation, the enforcement of any obligation to account for and pay tax applies to any taxable person who is required under this regulation to account for and pay any tax as if that were a tax on a supply made by the taxable person.
Subregulation 21
The Comptroller may, at any time, by written notice, vary or revoke the approval of an approved person granted under this regulation if the Comptroller is satisfied that —
the approved person has ceased to satisfy any of the requirements under paragraph (1) or (8), as the case may be;
the approved person has provided any false, misleading or inaccurate declaration or information in the approved person’s application under paragraph (1) or (8), as the case may be;
the approved person has failed to account for or pay tax on any importation or supply by the approved person on the basis that the importation or supply fell within paragraph (2), when the importation or supply did not fall within that paragraph;
the approved person has made an incorrect claim for deduction of input tax in contravention of paragraph (6), or has failed to comply with paragraph (15), (16) or (18), as the case may be; or
has failed to comply with any condition or requirement imposed by the Comptroller under paragraph (10).
Subregulation 22
Unless the Comptroller otherwise allows, where —
an approved contract manufacturer fails to account for or pay tax on any importation or supply by the approved contract manufacturer on the basis that the importation or supply falls within paragraph (2), when —
the importation or supply does not fall within paragraph (2); or
paragraph (2) does not, by virtue of paragraph (5), apply to the importation or supply; (b)in relation to the goods referred to in paragraph (4), an approved contract manufacturer fails to satisfy any condition specified in regulation 42B(2)(a) to (e) and (g); or
an approved person fails to account for or pay tax on the supply of specified goods to the customer of an overseas person under paragraph (18),then —
the approved contract manufacturer or approved person in the circumstances referred to in sub‑paragraph (a)(i) or (c), as the case may be; and
unless the Comptroller otherwise allows, the approved contract manufacturer in the circumstances referred to in sub‑paragraph (a)(ii),must —
repay the Comptroller without demand the amount of tax chargeable on the importation or the supply (as the case may be) to which the failure relates; and
include the amount of tax mentioned in sub‑paragraph (a) or sub‑paragraph (c) or sub‑paragraphs (a) and (c) (as the case may be) as output tax in the approved contract manufacturer’s or the approved person’s return.
Subregulation 23
Where specified goods are not exported, an approved person who receives the goods from another approved person must deliver the goods only to a person who is —
an approved person or a customer of the overseas person; or
where the goods are of an unsatisfactory standard or quality or are in excess of the amount required, a person for the intended destruction or disposal of such goods.
Subregulation 24
Where an approved person contravenes paragraph (23), the approved person must pay to the Comptroller an amount equal to the tax that would have been payable as if the approved person had himself, herself or itself made a supply of the goods in the course or furtherance of the approved person’s business and for this purpose, the value of the goods is taken to be —
where known, the market value of the goods; or
where the market value of the goods is not known, a value determined by the Comptroller.
Subregulation 25
An approved person mentioned in paragraph (24) must include the amount the approved person is required to pay under that paragraph as output tax in the approved person’s return.
Subregulation 26
In this regulation —
Definition
“approved contract manufacturer” means —
a taxable person whose application to be an approved contract manufacturer has been granted by the Comptroller under paragraph (1); and
any taxable person approved under regulation 46 in force immediately before 1 January 2010;
Definition
“approved logistics company” means a taxable person whose application to be an approved logistics company has been granted by the Comptroller under paragraph (8);
Definition
“approved person” means an approved contract manufacturer or an approved logistics company, as the case may be;
Definition
“customer”, in relation to an overseas person, means a person to whom the overseas person supplies specified goods;
Definition
“overseas person” means a person who belongs in a country other than Singapore who is not registered under the Act or is a registered (Seventh Schedule — pay only) person;
Definition
“process”, in relation to goods, includes (but is not limited to) subjecting the goods to any treatment;
Definition
“specified goods” means goods to or on which a process has been applied or carried out.