For making inflated and false claims of Goods and Services Tax (GST) refunds, the managing director of a Singaporean company has been convicted of GST fraud amounting to S$327,837.49 and sentenced to 12 months jail.
The Internal Revenue Authority of Singapore reveals that Tang Ee Boon, 32, the managing director of V-Teb Services Pte Ltd was brought to court for 21 charges of making inflated and false claims of GST refunds for the period 1 Jan 2004 to 30 Jun 2007.
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 the difference as GST refund from IRAS.
IRAS records indicate that V-Teb provides cleaning services locally. Hence, the company is not expected to claim GST refunds. However, IRAS’ tax auditors noted that Tang, as the managing director of V-Teb, had submitted increasing amounts of GST refund claims in the GST returns on a frequent basis.
Upon verifying the value of V-Teb’s taxable purchases with the alleged suppliers, IRAS auditors found that Tang had, over a period of 3 years, inflated the input tax claims in the GST returns in order to obtain inflated GST refunds from IRAS. Further investigations also revealed that Tang had failed to account for GST collected from V-Teb’s customers from 2004 to 2006. Tang also fabricated the amounts of taxable purchases and supplies in V-Teb’s GST returns.
Tang pleaded guilty to a total of 14 charges of evading GST, comprising three charges of understating output tax, eight charges of overstating input tax, and three charges of making false entries in V-Teb’s GST returns. In addition to the jail term, the court also ordered Tang to pay a penalty of $983,512.47, which is three times the amount of GST undercharged. The remaining charges were taken into consideration in sentencing.
IRAS stresses it take a serious view of GST-registered businesses that wilfully make false claims for GST refunds or under-charge GST on sales.