No these luxury handbags are not faked but why are you going jailed for entering Singapore with brand new luxury handbags? The reason is simple you tried to evade tax by not declaring and paying GST for these luxury bags that you bought overseas. Under Singapore law, you are only exempted from paying GST for purchase up to SGD$600 if you have been out of the country for more than 48 hours. If you are only out less than 48 hours, the tax relief granted is only $150. Bear in mind, that the goods have to be for personal use only.
Yes the custom officers are on the look out these days for these GST evaders. Especially those who passed the custom area carrying paper bags bearing popular brands such as Chanel, Hermes, Louis Vuitton, Longchamp etc. Following are cases that were reported last year.
- 20th Dec 2014, more than 10 boxes of branded bags and shoes believed to be worth ten of thousands have been confiscated by authorities after a woman had allegedly brought them in without paying Goods and Services Tax
- Sept 2014, three online retailers of branded handbags and accessories have been fined $31,000, $10,000, and $4,500 for evading the Goods and Services Tax (GST) between 2010 to 2012.
In 2014 alone, a total of nine such offenders were prosecuted and were slapped with fines ranging from $4,500 to $133,000
- In 2012, 2013, there were 179 and 398 cases where warnings or compositions sums were issued.
Tips for “evading” GST
Following are some tips that you may want to adopt to avoid paying GST. The tip behind avoiding GST payment is that you need to prove that the goods you purchase is solely for personal use only.
- Avoid buying more than 4 to 6 of the similar item because it is a clear sign that you are reselling. Of course you can say you buying it as gifts for your friends but it is up to the custom officer to believe you or not.
- Carry a big brand new Hermes paper bag across custom. Everyone know there is nothing that cost less than $600 from Hermes. Worse if you carried several of these paper bags from luxury brands. Carrying all these brand new paper bags will only attract unwanted attention from the custom officers.
- Open the package and drop away the box. If you know you are going to buy a handbag overseas, avoid bringing one there. You don’t want to appear at Singapore custom with two handbags when you are back.
Can I just tell the custom officer that it is a gift so no receipt?
Yes you can but you will still be taxed based on the value of identical or similar goods.
What are the consequences if you break the law?
Failure to make a declaration is an offence under the Customs Act and the GST Act. Offenders may be prosecuted in court and fined up to S$10,000or 20 times the amount of duty and GST, whichever is higher and/or jailed for up to three years.
End of the day, it is really up to individual if you want to take the risk to avoid paying that 7% . Just remember if you get caught, you will have to bear the consequences, it will no longer be 7% that you pay. So next time if you plan to go to “Nothing to Declare” , remember to think twice first.