It was reported on IRAS’ Website on 19 February 2016 that Tan Wan Wen (Tan) was sentenced to 8 weeks in jail, ordered to pay a penalty of $55,000 (3X the amount of GST refunds that were fraudulently claimed using multiple shell businesses.
IRAS’ audit revealed that Tan’s businesses were registered under different individuals’ names. What happened was that Tan made use of the names of several acquaintances and her husband to set up various shell businesses with the intention of defrauding the Government of the GST refund. These businesses are Alco Industrial Supplies Pte Ltd, Eltronic Marketing Pte Ltd, Newmart Trading & Services and Raco Industrial Supply.
IRAS’ investigation officers also uncovered that fictitious or “paper” transactions were carried out between these businesses. Tan then assisted these shell businesses to make false declarations on their respective GST returns in 2008. Through these shell businesses, she had fraudulently claimed a total amount of $18,000 in GST refund. Tan pleaded guilty to three charges while the remaining four charges were taken into consideration for the purpose of sentencing. She was sentenced to 8 weeks in jail and ordered to pay a penalty of $55,000, 3X times the amount of GST refund fraudulently claimed under Section 62 of the GST Act.
What does this mean to you?
Under Section 62 of the GST Act, offenders who claim GST input tax on fictitious purchases or understate output tax on sales can face a penalty of up to 3X the amount of GST input tax claimed, a fine not exceeding $10,000, and/or imprisonment of up to seven years.
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