Singapore GST – Fraudulent GST claims

It was reported in the IRAS’ website on 21 Jul 2014 that Samuel Sim Choon Hock (“Sim”), a manager of Netlink Alliance Pte Ltd (“Netlink”) at the time of offence, was sentenced by the court to 18 weeks’ jail after pleading guilty to 8 charges.  He was also ordered to pay a penalty of $183,000, which is 3 times the amount of fictitious claims for GST refunds of $61.000 he had made in the company’s GST returns.

How this case was uncovered was through IRAS’ audit programmes. In this case, Netlink, a GST-registered company, is in the business of import and export of IT equipment.  IRAS’ investigations revealed that Sim inflated the input tax claims and understated output tax on sales in the company’s GST returns from Feb 2006 to Jul 2008.

Sim faced 24 charges of making fraudulent GST claims amounting to a total of $116,000.  He had used the money to pay for his personal and family expenses.  Sim pleaded guilty to 8 charges. The remaining 16 charges were taken into consideration in the sentencing as Sim was cooperative during the investigation process.

What does this mean to you?

Put it simply, it is a serious offence in Singapore to claim input tax on fictitious purchases or understate output tax on sales.  Under the relevant provisions in the GST Act, offenders can face a penalty of up to 3 times the amount of tax undercharged, a fine not exceeding $10,000, and/or imprisonment of up to 7 years.

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