Singapore Import Landed Costs: Freight, Duties and GST in 2026

Recoverable import GST is not a cost of your goods, yet it lands in inventory in files we review. One misposted tax line quietly inflates closing stock, misstates the cost of goods sold (COGS) and understates the input tax claimed on the GST return. In this blog, we discuss how Singapore trading SMEs should build landed cost. It covers overseas freight, insurance, customs duty and import GST. The aim is to avoid misstating inventory, COGS or the GST return. We cover what belongs in inventory cost, how Boxes 5 and 7 work, and which allocation driver to choose. We also explain how to handle bills that arrive after the goods are sold.

What Does Singapore Import Landed Cost Accounting Include in Inventory Cost?

The cost of imported inventory is the purchase price plus non-refundable duties and directly attributable transport and handling costs, but never taxes you will recover.

The direct answer comes from the International Accounting Standard on inventories (IAS 2). Inventory cost includes the purchase price, non-refundable import duties, non-recoverable taxes, and transport, handling and similar costs. They must be directly attributable to bringing the goods to their present location and condition.

This treatment is subject to your applicable financial-reporting framework and documented accounting policy. Not every logistics charge is capitalisable. When we design import workflows for trading clients, the first filter we apply is recoverability.

The Inland Revenue Authority of Singapore (IRAS) permits eligible import Goods and Services Tax (GST) to be claimed as input tax. Because that tax is subsequently recoverable, IAS 2 excludes it from the purchase cost of inventory. Customs duty, by contrast, is not recoverable, so it forms part of the cost of the goods.

The second filter is attribution. A charge belongs in landed cost only if it is directly attributable to bringing the inventory to the warehouse in a saleable state. General overheads, financing costs and charges unrelated to the shipment stay outside. Where judgement is involved, write the treatment into the costing policy before the first container lands.

How Is Import GST Different from Customs Duty on the GST Return?

Customs duty is a real cost of the goods; import GST is a recoverable tax, provided every IRAS claiming condition is satisfied.

The core distinction shapes the whole workflow. According to IRAS, the current GST rate is 9%. That rate is current at the time of publication, so reconfirm it on the IRAS website before you rely on it for a filing.

Most commercial imports into Singapore require a Customs import permit submitted through TradeNet, and the goods may attract GST, duty, or both. Singapore Customs treats intoxicating liquors as dutiable goods, and dutiable goods incur both duty and GST. Do not infer a duty rate for any product without a verified tariff classification and permit assessment.

The error pattern we see most often when reviewing import files is simple. The declaring agent's statement labels import GST as an import charge, so the bookkeeper debits it to inventory. Margins and the input-tax claim are then both wrong. It surfaces when the permit population is reconciled to Box 7 and item costs are compared with the landed-cost workbook.

1. Claim only when every condition is met

IRAS conditions include GST registration, import by the business itself, business use, permit evidence showing the claimant as importer, supporting documents, and input-tax entitlement from taxable supplies. Possession of a permit alone does not guarantee a claim, and disallowed input-tax rules can still apply.

2. Report the import in Boxes 5 and 7

IRAS guidance places imports in Box 5 and Box 7 of the GST F5 return. The import value shown on the permit is declared in Box 5, and the import GST shown on the permit is entered in Box 7. IRAS also notes circumstances where invoice and permit values differ, and those differences must be reconciled rather than ignored.

3. Time the claim to the permit date

Input tax is normally claimed in the accounting period corresponding to the import-permit date. IRAS also allows a posting or processing-date approach where its conditions are met and the method is applied consistently. A month-end accrual is not permission to claim before you hold the original import permit and satisfy the applicable timing approach.

Which Allocation Driver Should Spread Freight and Duty Across SKUs?

There is no statutory formula: use direct identification where it exists, and otherwise one rational, consistently applied driver.

Allocation is an accounting policy judgement, not a rule. The framework below is a suggested policy approach, not a universal standard, and the driver you select needs your accountant's or auditor's approval.

Check whether your software edition and pricing plan include automatic landed-cost allocation. If it is unavailable, use a spreadsheet to allocate the bill and round lines to the invoice total. Key or import the per-SKU results as value adjustments.

Whichever driver you choose, also fix your inventory cost formula. IAS 2 permits first-in, first-out or weighted average for ordinarily interchangeable inventory, applied consistently. Weighted average may be calculated periodically or as each shipment is received.

1. Weight-based allocation

Suits ocean and air freight where chargeable weight drives the bill. Record gross shipping weight per stock-keeping unit (SKU) in the allocation workbook so the basis stays auditable.

2. Value-based allocation

Suits mixed cartons where insurance and handling risk broadly follow product value. Apply it every period, not only in months when it flatters the margin.

3. Quantity-based allocation

Reserve it for genuinely homogeneous units of similar size and handling. It distorts unit cost where item values differ sharply.

4. Direct assignment of assessed duty

Where a permit assigns duty to a specific SKU by tariff classification or product measure, assign that duty directly to that SKU. Spreading it on a generic freight ratio is an accounting judgement subject to the Customs assessment and your inventory policy.

How Do You Record a Shipment When Documents Arrive in the Wrong Order?

Use a clearing account to collect capitalisable costs until the full picture arrives, and keep import GST entirely outside it.

Goods can clear Customs before the freight bill or the final duty statement reaches the accounts desk. One possible control design is a landed-cost clearing account. Confirm the account names and posting design with your accountant, and check our guide for current menu and tax-code names before using it. It collects capitalisable freight, insurance and duty until allocation. Foreign-currency supplier invoices are recorded at the spot rate, with later settlement differences treated as FX gain or loss — see how multi-currency accounting handles FX gains and losses.

Where documents arrive out of order, use the clearing account and accrue material freight or duty at month-end rather than closing with understated inventory. For genuinely immaterial amounts, an entity-specific materiality policy approved by your accountant may permit expensing. No universal dollar threshold applies, so do not import one from another business's policy.

The workflow below follows that control design, from the supplier invoice to the final allocation of late costs.

Step 1: Record the supplier invoice at the spot rate

Recognise the foreign-currency supplier invoice in your functional currency using the spot exchange rate on the transaction date, as IAS 21 requires. Later settlement differences go to FX gain or loss, never back into inventory — see how multi-currency accounting handles FX gains and losses.

Step 2: Route freight and insurance through clearing

Enter freight and insurance as separate purchase invoices. Post the net, directly attributable amount to the clearing account. Recoverable GST charged by a local GST-registered forwarder is claimed as input tax; overseas freight and exempt insurance lines carry no Singapore GST.

Step 3: Post duty to clearing and allocate it

Post the Customs or declaring-agent liability for duty to the clearing account as well, with no GST coded to the duty line itself. Allocate the clearing balance to SKUs through inventory value adjustments.

Step 4: Claim import GST outside inventory

Post recoverable import GST as a separate transaction so it never touches clearing, inventory or COGS. Configure the tax codes so the permit's taxable import value flows to Box 5 and the GST flows to Box 7. Exact menu and tax-code names vary by software edition, so confirm them in our guide before you post.

Step 5: Allocate late costs between stock and COGS

When material landed costs arrive after units are sold, apportion them between inventory on hand and COGS for the units already sold. Loading the whole bill into closing stock overstates stock and understates COGS. This is a policy recommendation that deserves accountant or auditor review.

What Does This Illustrative Three-SKU Wine Shipment Show?

A hypothetical three-SKU wine shipment shows how the pieces fit together on one permit.

The example below is purely illustrative. The numbers are not client data, and the duty figure is not a verified tariff calculation. Treat it as a pattern for building your own reviewer-approved shipment.

Picture a wine shipment with three SKUs on one US-dollar invoice. The exchange rate applied at the transaction date is 1.3500 Singapore dollars to the US dollar. Freight and insurance, net of recoverable GST, total S$570 and are allocated by gross shipping weight. Duty is assigned by the permit assessment.

Import GST of S$516.60 is 9% of the S$5,739.96 import value. It is claimed as recoverable input tax and excluded from every unit cost below. Before the final allocation, some bottles had been sold: 40 of W-A at S$36, 15 of W-B at S$52 and 6 of W-C at S$85, all prices excluding GST. At final landed cost, revenue is S$2,730, COGS is approximately S$1,650.13 and gross profit is S$1,079.87.

What Documents Should Sit Behind Every Import Shipment?

A recommended evidence pack, not a statutory checklist, keeps every permit defensible five years later.

We recommend an evidence-control pack behind every shipment. This is a practical checklist rather than a statutory list. Shape it to your business:

• import permit with its TradeNet reference
• supplier invoice and shipping documents
• freight and insurance bills
• declaring agent's statement
• allocation workbook and payment evidence
• ledger-to-GST reconciliation

IRAS requires GST-registered businesses to keep business and accounting records for at least five years. Some firms adopt seven years as an internal policy. That is good practice, not a statutory minimum, so describe it that way in your procedures manual.

Imports generally require a permit submitted through TradeNet, with GST and/or duty payable under it. Exemptions, reliefs and suspension schemes exist, and some circumstances do not require a permit at all — check Singapore Customs before assuming either way.

When we help trading clients tighten their import workflows, three habits matter most. Capitalisable freight, insurance and non-refundable duty flow into inventory through a clearing account and one documented allocation driver. Recoverable import GST is claimed as input tax in Box 7 and never touches unit cost. Every shipment carries an evidence pack that survives the five-year retention window.

Good Singapore import landed cost accounting is not about memorising rules. It is about a policy your team applies the same way every month, backed by records that reconcile to the permit and the GST F5 return.

AI Account supports multi-currency accounting, inventory management and automated invoicing on an unlimited-usage model built for scalable growth. If import season is straining your spreadsheets, talk to us about a workflow that keeps both your margins and your GST return honest.