Marine and Shipping

Zero-rating of supplies relating to ships, management of ships, etc. and changes introduced by Budget 2011 including the launch of the Approved Marine Customer Scheme and expanded scope of s21(3)(p).

Definition of Ship

Prior to 1 Jul 2010, a ship for the purposes of applying Sections 21(3)(l), (m), (n), (o) and (p) of the GST Act was defined as one which is:

  1. Not designed or adapted for use for recreation or pleasure; and
  2. Excludes any ship licensed under the Maritime and Port Authority of Singapore (MPA) Act as a passenger harbour craft or pleasure craft.

Therefore, prescribed services performed on internationally bound ships that are excluded from the definition of 'ship' will not enjoy zero rating.

Effective 1 Jul 2010, the definition of 'ship' has been expanded to include ships used or adapted for recreation or pleasure provided that they are wholly internationally bound. However, ships that are licensed by MPA as passenger harbour craft and pleasure craft continue to be excluded.

Effective 1 Jan 2011, the definition of ship excludes ships that are granted vessel permits by the Public Utilities Board.

For details, please refer to GST Guide for the Marine Industry (200KB).

Zero-Rating of Supplies Relating to Ships

You need to charge GST on services that you provide. Where the supplies qualify as international services under Section 21(3) of the GST Act, you may zero-rate your supply of service (i.e. charge GST at 0%).

International Transport of Passengers or Goods by Sea 

Transportation of passengers or goods by sea:

  1. from a place outside Singapore to another place outside Singapore;
  2. from a place in Singapore to international waters; or
  3. from international waters to a place in Singapore.

Freight-related charges (e.g. bill of lading fee) and container-related charges (e.g. demurrage and detention fees) billed by shipping lines are considered as ancillary to international transportation.

Not applicable.

Relevant Section for Zero-Rating
S21(3)(a) of the GST Act

Handling of Ships or Goods Carried in a Ship

Certain services in connection with:

  1. the handling of ships; or
  2. the handling or storage of goods carried in the ship.

The services are prescribed in the Third Schedule of GST (International Services) Order. Please refer to paragraph (l) in the  extract of Section 21 of the GST Act (207KB).

Relevant Section for Zero-Rating
S21(3)(l) of the GST Act

Pilotage, Salvage or Towage Services

Not applicable

Relevant Section for Zero-Rating
S21(3)(m) of the GST Act

Surveying or Classification Services

Services comprising the surveying or classification of any ship for the purposes of any register.

Not applicable.

Relevant Section for Zero-Rating
S21(3)(n) of the GST Act

Supply (Including Letting or Hire) of Any Ship

The ship is not leased for the purpose of providing such services performed substantially in Singapore:

  1. transportation;
  2. accommodation;
  3. entertainment;
  4. catering of food or beverages; or
  5. education services.

Relevant Section for Zero-Rating
S21(3)(o) of the GST Act

Certain Services (e.g. Repair and Maintenance)

Certain services comprising the repairmaintenancebroking or management of any ship.

The services are prescribed in the Sixth Schedule of GST (International Services) Order. Please refer to paragraph (p) in the  extract of Section 21 of the GST Act (207KB).

Relevant Section for Zero-Rating
S21(3)(p) of the GST Act

Services Comprising the Management of Ship

Section 21(3)(p) of the GST Act provides that you may zero-rate the supply of services comprising the management of ship. The following are common types of ship management services and ship agency services that qualify for zero-rating.

Ship Management Services

  • Provision of technical services (e.g. the arrangement and supervision of dry-docking and repair of vessels)
  • Engagement and replacement of crew
  • Arrangement of salvage and towage of vessels
  • Arrangement and supervision of the operations of vessels
  • Arrangement for the employment of vessels
  • Construction supervision services (e.g. to ensure that the vessel is constructed according to specifications)

Ship Agency Services

  • Ship husbandry services
  • Liaisons with parties involved in the import/export of cargo, and other ancillary activities to ensure the smooth movement of cargo

Supplies of Goods to Ships

Effective 1 Jul 2010, you may zero-rate a supply relating to goods (whether by sale or lease) where the Comptroller is satisfied that the goods are for:

  1. Use as stores or fuel on a ship;
  2. Installation on a ship or a ship under construction;
  3. Use in the maintenance or operation of a ship; or
  4. Sale by retail as merchandise to persons carried on a ship.

For the purposes of applying zero-rating, 'ship' refers to one which falls within the meaning of ship as explained above.

Zero-rating is no longer restricted to only stores and merchandise for sale by retail , and the ship does not need to be on a voyage to or from a destination outside Singapore . For lease of goods, it no longer needs to be supplied to an overseas person.

Prior to 1 Jul 2010, you may zero-rate the supply of stores, bunker fuel and merchandise (for sale by retail to persons on the ship) if the voyage was to or from a destination outside Singapore. Required export evidence had to be maintained. For more information, please refer to GST: Guide on Exports (776KB).

Consequently, zero-rating does not extend to other goods which do not fall within the definition of stores, bunker fuel and merchandise (for sale by retail). Further, where goods are used on ships that do not have a next port of call (e.g. oil rigs, FPSO platforms and cruise ships which embark on "cruise-to-nowhere"), such supplies have to be standard-rated.

For more information on the change, please refer to GST Guide for the Marine Industry (200KB).

Approved Marine Customer Scheme

Under the new Approved Marine Customer Scheme (AMCS), effective 1 Oct 2011, suppliers can zero-rate supplies relating to goods to businesses approved under the scheme that are for:

  1. Use as stores or fuel on;
  2. Installation on; or
  3. Use in the maintenance or operation of a commercial ship that is wholly for international travel, without the supplier having to maintain the previously listed documentary proof.

Prior to 1 Oct 2011, to zero-rate supplies relating to goods for use or installation on a ship as provided for under Section 21(6A) of the GST Act, suppliers must maintain documentary evidence spelt out in GST Guide for the Marine Industry (200KB).

For details, please refer to GST: Approved Marine Customer Scheme (AMCS) (200KB).

Repair and Maintenance

Effective 1 Oct 2011, under Section 21(3)(p) of the GST Act, the supply of repair and maintenance services of ship and ship parts or components is zero-rated if:

  1. Repair or maintenance is carried out on board the ship;
  2. Any part or component of the ship is removed for repair and:
    1. Reinstalled on the ship, or returned onto the ship as spare; or
    2. Delivered to:
      1. A shipyard situated in Singapore; or
      2. An approved marine customer; or
  3. Any part or component of the ship is removed and repaired by way of an exchange with an identical part or component, with the identical part or component being:
    1. Installed on the ship, or brought onto the ship as a spare; or
    2. Delivered to:
      1. A shipyard situated in Singapore; or
      2. An approved marine customer.

Prior to 1 Oct 2011, the supply of repair and maintenance services of ship and ship parts or components is zero-rated only if:

  1. The repair or maintenance is carried out on board the ship;
  2. Any part or component of the ship is removed for repair and reinstalled on the ship;
  3. Any part or component of the ship is removed for repair and returned to the ship as a spare; or
  4. Any part or component of the ship is removed and replaced by an identical part or component.

For details, please refer to GST Guide for the Marine Industry (200KB).

GST Relief and Documentary Waiver for Ships Temporarily in Singapore

For details, please refer to Singapore Customs' website www.customs.gov.sg.
  • The service that I provide qualifies as an international service. Therefore, I charge GST to my customer at 0%. Can I claim the GST incurred for providing the international service as input tax?

    Yes. The input GST can be claimed if you can satisfy all the conditions for input tax claim.
  • I provide repair and maintenance to a Singapore registered ship in Singapore. The ship is not a passenger harbour craft or pleasure craft. Can I zero-rate the supply of services?

    Yes. You may zero-rate your supply of repair and maintenance services if:

    Prior to 1 Oct 2011

    1. The repair or maintenance is carried out on board the ship; or
    2. Any part or component of the ship is removed for repair and reinstalled on the ship; or
    3. Any part or component of the ship is removed for repair and returned to the ship as a spare; or
    4. Any part or component of the ship is removed and replaced by an identical part or component.

    This is regardless of the place which the ship is registered.

    Effective 1 Oct 2011

    1. Repair or maintenance is carried out on board the ship;
    2. Any part or component of the ship is removed for repair and:
      1. Reinstalled on the ship, or returned onto the ship as spare; or
      2. Delivered to:
        1. A shipyard situated in Singapore; or
        2. An approved marine customer; or
    3. Any part or component of the ship is removed and repaired by way of an exchange with an identical part or component, with the identical part or component being:
      1. Installed on the ship, or brought onto the ship as a spare; or
      2. Delivered to:
        1. A shipyard situated in Singapore; or
        2. An approved marine customer.
  • I have a contract to build a ship. I will out-source part of the ship-building services to a GST-registered subcontractor. What are the GST implications?

    Your supply of the ship (i.e. contract to build) may be zero-rated. However, when your sub-contractor bills you for its ship-building services done, your sub-contractor must standard-rate the supply to you.

    Effective 1 July 2010, if you purchase goods to be used or installed on a ship under construction and the goods are delivered directly to the shipyard, the supplier can zero-rate its supply to you, provided that it can maintain the documentary requirements.

    For more information, please refer to GST Guide for the Marine Industry (200KB).

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