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Custom Clearing Procedure for Imported and Exported Goods

What is Custom Clearing Procedure?

They are procedures that needs to be followed when it comes to importing or exporting any good.

Disclaimer: For the purpose of this article, I will use Singapore as an example of how the custom clearing procedure works.

Before I begin, I must clarify that there are 2 broad categories of goods that are imported or exported out of every country, namely:

  • Non-controlled/dutiable goods

What are the Custom Clearing Procedures for Imports?

In general, for imports, duties fees are usually applicable for controlled goods. In addition, countries, like Singapore, may slap on additional taxes for imports such as the Goods and Services Tax (GST) on all imports being sold and consumed within the country.

  • Step 1

    Register your business in the relevant custom agency in your country

    • In Singapore, all individuals or business need to apply with Accounting and Corporate Regulatory Association (ACRA) or any Unique Number Entity (UEN) to apply for a UEN and activate their Customs Account.

  • Step 2

    Check whether your goods are controlled

    • This is important as there are duties that must be paid when importing controlled goods
    • As such, check with the country’s customs to get a list of the controlled goods for imports and their relevant agencies because if you are found not abiding by the regulations, your imports may be withheld by customs and you may face a fine.
    • (Optional) Pay and furnish the security of the imports
      • Payment of duty fees are usually only required for controlled goods and under certain schemes, the duty fees can be suspended temporarily. Furthermore, the country may require the importer to insure a certain percentage of the import taxes and duties prior to the shipment before receiving the shipment at the port.
      • Singapore requires all importers to set up an inter-bank GIRO that helps to facilitates GST and duty fee payments to the Singapore Customs.
      • Furthermore, security paperwork needs to be furnished for transactions involving dutiable goods and the operation of licensed warehouses.

  • Step 3

    Apply for a Custom Import Permit

    • In a sense, an import permit is akin to a license to import goods into the country. This is usually given by the customs in the nation. This can be done by registering yourself as a declaring agent or appointing a declaring agent (your freight forwarder) to do it for you.
    • Oftentimes, there may be special trade structures in place for certain types of goods due to trade agreements that can benefit you. As such, always do ample research before tackling these issues or have a professional assist you in this matter.
    • In Singapore, all permit applications must be submitted by custom clearance service provider electronically to the TradeNet System.
    • There are 2 major kinds of permits available:
      • In Payment
        • Payment of import taxes only (eg. GST).
        • Payment of both import taxes and custom duties due to it being a controlled good.
      • In-non-Payment
        • Import tax deferment (Deferred GST)
        • Duties Deferment

  • Step 4

    Prepare the necessary documentation

    • Documents such as a valid export permit, goods with invoice stating the origin, nature, quantity of the good, Bill of Lading/Airway Bill, etc. must be provided for custom clearance.
    • These are usually more important for controlled/dutiable goods as they are required to show that the importer is abiding by the country’s import regulations or already paid the duties.

  • Step 5

    Keep the documentation

    • For accounting purposes on both ends, the user is advised to keep a copy of all custom clearance documentation in case there are any faults that arise later on after the customs check, as users may be required to present the documents upon the custom officials’ requests.
    • In Singapore, all trade related documents must be kept either in hardcopy or as images for a period of 5 years

What are the Custom Clearing Procedures for Exports?

In general for exports out of Singapore, there will be no GST taxes levied.

  • Step 1

    Register your business in the relevant custom agency in your country

    • Similar case as the one in imported goods.

  • Step 2

    Check whether your goods are controlled

    • This is important as there are duties that must be paid when importing controlled goods
    • As such, check with the country’s customs to get a list of the controlled goods for imports and their relevant agencies because if you are found not abiding by the regulations, your imports may be withheld by customs and you may face a fine.
    • For Singapore, the list is as seen above and if unsure, the individual/business can type the description of their good in the system for sample classification or pay a fee of S$75 for an official classification service.

  • Step 3

    Apply for a Custom Import Permit

    • In a sense, an export permit is akin to a license to import goods into the country. This is usually given by the customs in the nation. This can be done by registering yourself as a declaring agent or appointing a declaring agent (your freight forwarder) to do it for you.
    • Oftentimes, there may be special trade structures in place for certain types of goods due to trade agreements that can benefit you. As such, always do ample research before tackling these issues or have a professional assist you in this matter.
    • In Singapore, all permit applications must be submitted by a declaring agent electronically to the TradeNet System.
    • There are 3 kinds of permits available:
      • Direct
      • Approved Premises/Schemes
      • Temporary Consignment

  • Step 4

    Prepare the necessary documentation

    • Documents such as a valid export permit, goods with invoice stating the origin, nature, quantity of the good, Bill of Lading/Airway Bill, etc. must be provided to the customs for clearance.
    • These are usually more important for controlled/dutiable goods as they are required to show that the exporter is abiding by the country’s export regulations or already paid the duties.

  • Step 5

    Keep the documentation

    • For accounting purposes on both ends, the user is advised to keep a copy of all custom clearance documentation in case there are any faults that arise later on after the customs check, as users may be required to present the documents upon the custom officials’ requests.
    • In Singapore, all trade related documents must be kept either in hardcopy or as images for a period of 5 years

Why choose M&P International Freight?

M&P International Freight is a one-stop shipping solutions company located in Singapore who primed and ready to meet the transportation needs of international clientele.

 

Trusted and Experienced

After being in this industry for a decade, we have built a respectable name for ourselves as a professional freight forwarder. We are also firmly grounded in the custom clearance scene and can help you send out all of your imports and exports without any hiccups.

One-Stop Solution Provider

We offer a variety of services ranging from multi-modal transportation operations all the way to custom clearance and cargo insurance services. By choosing us, you can rest assured that all of your logistical needs will be met swiftly.