On 11 August 2018, the Inland Revenue Authority of Singapore (IRAS) has published a new e-Tax Guide that was re-wrote on 16 July 2018, on GST: Approved Contract Manufacturer and Trader (ACMT) Scheme. It replaces the e-Tax Guide on GST Approved Contract Manufacturer and Trader (ACMT) Scheme (Twelve Edition).
Under normal GST rules, a GST-registered contract manufacturer must charge and account for GST on supplies of value-added activities performed on their client’s goods that remain in Singapore. If the client is an overseas person who is not GST-registered, it is not possible to recover the GST costs incurred.
Under the ACMT scheme, a qualifying contract manufacturer can disregard the supply of value-added activities (i.e., not subject to GST) to overseas non-GST registered clients where the supply comprises a process being applied to or carried out on goods under a contract with and directly benefiting the overseas client. A qualifying contract manufacturer can also enjoy import GST suspension and input tax claim privileges on behalf of an overseas client, subject to certain conditions being met.
Similar benefits are also available for qualifying logistics companies acting as a distributing agent for overseas non-GST registered clients.
Source: IRAS, 13 August 2018