Suharry Bin Abdullah, the director of a beverage company, Republic Beverages Company Private Limited was sentenced to four months in prison and ordered to pay a penalty of S$140,023.59 for creating false general sales tax (GST) entries and fictitious invoices to defraud the Comptroller of GST. RBC was fined S$40,000 and ordered to pay the same amount of penalty.
GST-registered businesses can offset the GST they pay on their purchases (input tax) against the GST they collect from sales (output tax), and pay the net difference to IRAS. If a business incurs more GST on purchases (input tax) than it collects from sales (output tax), it can claim a refund of the difference from IRAS.
Started in 2006, RBC is a company that engages in supply and distribution of beverages. Suharry made false entries in RBC’s GST returns from March 2008 to August 2008, resulting in net GST refund claims that his company was not entitled to.
The total amount of false GST claims was S$32,158.98. In addition, Suharry had also created six fictitious purchase invoices when IRAS requested for supporting documents.
IRAS also uncovered that Suharry had forged the six suppliers’ invoices in his attempt to mislead IRAS into thinking his GST refund claims were genuine. The total amount of GST involved for the forged invoices is S$20,394.64.
Claiming input tax on fictitious purchases is an offence. Offenders face a penalty of up to three times of the amount of tax undercharged and/or imprisonment up to seven years.
Suharry and RBC faced eight charges each. Suharry pleaded guilty to 10 of the charges. The remaining six charges were taken into consideration for sentencing. Suharry was sentenced to four months' imprisonment and ordered to pay a penalty of S$140,023.59, which is three times the amount of tax undercharged.
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