GST – Construction firm and its manager fined for unlawful collection of GST

It was reported on IRAS’ Website on 27 July 2015 that GG Construction Pte Ltd (“GG Construction”) and its 42-year-old manager, Lee Tai Leong (“Lee”), have to pay a penalty totalling $227,000 and a court fine of $2,400 for unlawfully collecting a GST amount of approximately $38,000 when the company was not registered to collect GST.

IRAS’ GST audit reveals that  GG Construction and Lee, were both not GST-registered.  Lee was in charge of preparing and issuing quotations and invoices to customers for the renovation works carried out by GG Construction.  Lee committed the offence of unlawful collection of GST when he issued an invoice dated 6 Mar 2012, with a GST amount of $38,000 shown on the invoice, to a company for the sale of a property at 71 Toh Guan Road East owned by GG Construction.

GG Construction and Lee faced a similar charge each for the unlawful collection of GST. Both the company and Lee have to pay a penalty of $114,000 each. This is three times the amount of GST unlawfully collected. The court also fined both GG Construction and Lee a total of $2,400.

What does this mean to you?

It is a serious offence for businesses that are not GST-registered to charge and collect GST from their customers.  Under the GST Act, offenders face a penalty of 3 times the amount of tax unlawfully collected, and a fine of up to $10,000 for each offence.

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