Eric Chia Puay Yeoh, the mastermind behind a complex GST scam using multiple shell entities, was sentenced to 15 months in prison.
Chia colluded with his accomplices to defraud the Comptroller of Goods and Services Tax of GST refunds totalling S$953,192.07 (US$768,355.62) from January 2005 to March 2007.
For his criminal actions, Chia landed in court today with 122 charges of defrauding GST refunds and wilfully with intent assisting his accomplices to make fictitious GST claims in their GST returns.
Chia pleaded guilty to 45 charges while the remaining 77 charges were taken into consideration for the purposes of sentencing. In addition to imprisonment, the court further ordered him to pay a penalty of more than S$1.2 million (US$967,312.34) being three times the amount of the fictitious claims for GST refunds amounting to S$400,394.27 (US$322,751.63).
Elaborate Fraudulent Scheme
Chia's elaborate scheme to commit GST tax fraud first began in Jan 2005 under Kapin Enterprise – a sole-proprietorship business registered under his wife’s name. For two years, he inflated the GST refund claims in Kapin’s GST returns by S$217,157.62 without his wife’s knowledge.
His dishonest acts continued with companies which he owned – Keat Siang Hang Pte Ltd (KSH), World Resources Organisation Pte Ltd (WRO) and Shi Lin Enterprise Pte Ltd. Figures were cooked to make up fictitious GST refund claims of S$95,752.95 and S$33,055.66 for KSH and WRO respectively, while GST refund claims for Shi Lin were inflated by S$82,402.30.
Partners in Crime
Sharing his modus operandi, Chia assisted three of his accomplices to obtain inflated and fictitious GST refunds.
Chia suggested to Foo Tee Suan to register FTH Enterprise (FTH) - an export business - for GST. He wilfully with intent assisted Foo to make fictitious claims in his GST returns from July 2005 to March 2007.
Thereafter, Chia helped Foo to set up three other businesses, namely F&T Top System Enterprise (F&T), Hwa Rong Enterprise Pte Ltd (HREPL), and Hwa Rong Import & Export (HRIE). These were all shell companies without any business transactions.
To illegally obtain GST refunds, Chia declared fictitious figures in the GST returns of FTH, F&T, HREPL and HRIE and fraudulently claimed a total of $458,019.69 in GST refunds from July 2005 to March 2007.
Separately, Chia with wilful intent assisted another accomplice, Ivan Tan Suan Chew, a director of ENV Recycle Trading Pte Ltd (ENV), to make fictitious GST declarations and illegally obtained $35,673.47 in GST refunds from July 2005 to November 2005.
Chia also with wilful intent assisted Sng Kay Heng, the sole proprietor of Strikey Trading (a dormant business), to falsify his documents to make fraudulent claims in his GST returns for the business.
Purchases and sales invoices originally issued to Kapin Enterprise were altered by Chia to reflect the name of Strikey Trading. Fictitious GST refund claims of $31,130.38 were then made by Strikey Trading from November 2005 to January 2006.
GST-registered businesses are allowed to offset the GST they pay for their purchases (input tax) against the GST they collect from sales (output tax).
They pay the net difference to IRAS. Those that incur more GST on purchases than they collect from their sales can claim the difference from IRAS in the form of GST refunds.
Under the GST Act, exports of goods and international services are zero-rated (i.e. GST at 0%). In other words, GST-registered businesses need not collect GST on these exports.
However, a GST-registered business that exports its goods overseas may still claim the full amount of GST incurred on its purchases.