Income Tax – Wholesale Trader and Company to Pay Penalties of $169,194.60 and Fine of $5,000 for False PIC Claim


It was reported in IRAS’ website on 21 July 2017 that Chin Jin Han (“Chin“), who was running a wholesale trading company, Mah Sing Pte. Ltd (“Mah Sing”), has been convicted of providing false information in the company’s Productivity and Innovation Credit (“PIC”) cash payout application form.

Chin submitted a PIC cash payout application form to IRAS, under Mah Sing’s name, in Apr 2013. He obtained the signature of Mah Sing’s sole director, his mother-in-law who left the running of the business to him, and completed all the required fields in the PIC cash payout application form.

IRAS’ Investigations revealed that Mah Sing did not purchase the two servers and three workstations (“the equipment”) at the purported cost of $93,997, as declared in the PIC cash payout application form. The invoices that showed the purchase of the equipment were false.

Both Mah Sing and Chin were convicted of giving false information to the Comptroller of Income Tax, in order to obtain a PIC cash payout and Bonus which the company was not entitled to.

The court ordered the company to pay a penalty of $56,398.20 which is a one-time penalty of the amount of the PIC cash payout that was wrongfully claimed.

Chin was convicted of giving false information to the Comptroller of Income Tax to assist Mah Sing to obtain a PIC cash payout, which Mah Sing was not entitled to when no such purchase had in fact taken place. The court ordered Chin Jin Han to pay a penalty of $112,796.40, which is two times the amount of PIC cash payout that was wrongfully claimed, and a fine of $5,000.

What does this mean to you?

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. Under the Income Tax Act, anyone convicted of an offence of abusing the PIC scheme will have to pay a penalty of up to four times the amount of PIC cash payout fraudulently obtained or which would have been obtained if the offence had not been detected, and a fine of up to $50,000 and/or imprisonment of up to five years.

If you have any questions, contact support@whm-consulting.com.

Singapore GST – Former Manager of Export Business Jailed for GST Fraud


It was reported in the IRAS’ website on 21 July 2017 that Suneel Ramchandani (“Suneel”), the former manager of Indibiz, an export business for luxury watches and electronic products, has been charged and convicted for making fictitious declarations to enable Indibiz to claim GST refunds totaling $178,314.82.

Suneel’s eight GST evasion charges to defraud the Comptroller of GST occurred over eight accounting periods starting in July 2009. Indibiz initially started as a sole-proprietorship business of Suneel and was converted to a partnership business with one Sreyashi Sengupta (“Sreyashi”) on 16 February 2009. Suneel subsequently withdrew from the partnership on 30 March 2009 and Sreyashi became the sole-proprietor of Indibiz. However, Suneel remained as a manager and person-in-charge of the GST account of Indibiz. With the assistance of Suneel, Sreyashi registered Indibiz for GST purposes with effect from April 2009.

From Jul 2009 to Oct 2010, Suneel had made false entries in the GST returns of Indibiz, to fabricate false input tax claims and zero-rated supplies in order to enable Sreyashi to claim fraudulent GST refunds totaling $178,314.82. Investigations further revealed that a significant portion of the GST refund monies received by Sreyashi arising from the false declarations that had been e-filed by Suneel, was handed over to Suneel.

IRAS’ investigation revealed that Suneel had represented Indibiz and provided IRAS with falsified purchase invoices showing “Indibiz” as the purchaser of the goods when in fact, the purchases never took place.  Other falsified documents included purchase orders purportedly issued by Indibiz, as well as subsidiary export certificates purportedly issued to Indibiz to support the exports for zero-rated supplies, whereby no output tax will be due to IRAS.

Suneel faced a total of eight GST evasion charges for fabricating false claims to willfully assist Indibiz to obtain GST refunds that Indibiz was not entitled to. He pleaded guilty to four out of the eight GST evasion charges, involving a total GST amount of $178,314.82, with the other four remaining GST evasion charges being taken into consideration for the purposes of sentencing. The Court sentenced Suneel to 8 months’ jail and ordered him to pay a penalty of $534,944.46, three times the amount of tax undercharged.

 

What does this mean to you?

It is a serious offence to claim GST input tax on fictitious purchases or understate output tax on sales. Offenders face a penalty of up to three times the amount of tax undercharged, a fine not exceeding $10,000, and/or imprisonment of up to seven years.

If you have any questions, contact support@whm-consulting.com.

Income Tax – Director Behind PIC Sham Convicted


It was reported in IRAS’ website on 20 July 2017 that Selladorai Dharmalingam (“Selladorai”), the sole director of Al Bright Construction Pte. Ltd. (“Al Bright”), has been convicted and sentenced for abusing the Productivity and Innovation Credit (PIC) scheme by giving false information to illegally obtain a PIC cash payout and bonus for Al Bright.

IRAS’ investigation revealed that Selladorai authorized the submission of the PIC Cash Payout Application Form by Al Bright to claim $50,461.20 in PIC cash payout and $15,000 in PIC bonus, for the purported expenditure of $84,102 to purchase an electric overhead crane.  However, there was no such expenditure incurred by Al Bright nor any such equipment was purchased.

Selladorai was convicted of giving false information to the Comptroller of Income Tax in order to obtain a PIC cash payout and PIC bonus which the company Al Bright was not entitled to. The court ordered Selladorai to pay a fine of $3,500 and a penalty of $100,922.40, twice the amount of PIC cash payout that Al Bright had wrongfully obtained, and sentenced him to 12 weeks’ imprisonment in default of payment.

What does this mean to you?

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. Offenders convicted of PIC fraud will have to pay a penalty of up to four times the amount of cash payout fraudulently obtained, or which would have been obtained if the offence had not been detected, and a fine of up to $50,000 and/or imprisonment of up to five years.

If you have any questions, contact us at support@whm-consulting.com.

Singapore GST – Robotic Ice-Cream Machine Company Director Sentenced to Jail for GST Evasion


It was reported in the IRAS’ website on 6 July 2017 that Robofusion Asia Pte Ltd (“Robofusion”), which is a company in the business of supplying robotic ice-cream kiosks, has been convicted of evading GST  by overstating GST input tax on its GST return. Robert Taramelli (“Taramelli”), the company director, was also convicted for his role in assisting the company to evade GST.

IRAS’ investigations revealed that Taramelli assisted Robofusion to evade tax by maintaining a false record, i.e. by including a false invoice dated 10 Sep 2013 that he had created, purportedly from a supplier, showing GST amounting to $35,667.85, into Robofusion’s taxable purchases listing.  He included the GST amount of $35,667.85 in the amount of input tax claimed in Robofusion’s GST return for the accounting period 1 Sep 2013 to 30 Sep 2013. The false invoice was for the supposed purchase of 10 units of a machine by Robofusion from the supplier for the total amount of $509,540.72.  Investigations revealed that the actual tax invoice, which had the same invoice number, had already been claimed in Robofusion’s GST return for an earlier accounting period ended Jun 2013.

For his offense of willful intent to assist Robofusion to evade tax, Taramelli was sentenced to 6 weeks’ in jail and ordered to pay a penalty of $107,003.55, which is 3X of the GST input tax of $35,667.85.

Robofusion was sentenced to pay a penalty of $107,003.55, which is 3X the amount of GST undercharged, and a fine of $8,000.

If you have any questions regarding the above, please contact support@whm-consulting.com.

Singapore GST – Amendment to the GST Guide for the Aerospace Industry


The IRAS has amended its e-Tax Guide on “GST Guide for the Aerospace Industry” on 19 June 2017 and clarifies the following:

For repairs and modification work to qualify for zero-rating under Section 21(3)(p) of the GST Act, the aircraft or aircraft parts on which they are performed must remain airworthy and the necessary documents specified in paragraph 5.3.1 of the e-Tax Guide are maintained. This is as zero-rating relief is accorded on the basis that the repaired aircraft part would, following the repair or maintenance, form part of a qualifying aircraft. Specifically, for repair and maintenance services performed on aircraft parts which fall under paragraph 5.1(c), if it cannot be proved that the aircraft part remains airworthy following the services performed (i.e. absence of a supporting ARC/COC), zero-rating under section 21(3)(p) would not apply.

This is as zero-rating relief is accorded on the basis that the repaired aircraft part would, following the repair or maintenance, form part of a qualifying aircraft.  Specifically, for repair and maintenance services performed on aircraft parts, if it cannot be proven that the aircraft part remains airworthy following the services performed (i.e. absence of a supporting ARC/COC), zero-rating under section 21(3)(p) would not apply.

If you have any questions regarding the above, contact us at support@whm-consulting.com.

Your One-Stop Advisor on Your Burning Business & Tax Issues

%d bloggers like this: