Singapore GST – Company director jailed 4 weeks for omitting to account for GST on property sale

It was reported in IRAS’ website on 1 June 2018 that Kho Foong Kuin, a director of Speed Safety International Pte Ltd (“Speed Safety”), has been convicted for not reporting the amount of GST collected from the sale of a non-residential property at Tuas View Place (the “Property”) in the company’s GST return with wilful intent to evade GST.

IRAS’ investigations revealed that Speed Safety had disposed of the Property on 30 June 2014. The purchaser paid Speed Safety $828,000 for the Property and $57,960 for the 7% GST on the selling price.

Kho, who was responsible for filing GST returns for Speed Safety, had previously made a full claim from IRAS on the input tax amounting to $45,454.49 paid for the purchase of the Property.  She knew that she was required to declare and pay IRAS the output tax of $57,960.00 collected for the sale of the Property.  However, she intentionally did not do so as she wanted to use the sales proceeds, including the GST collected, to alleviate Speed Safety’s financial difficulties.

The Court sentenced Kho to 4 weeks’ jail and ordered her to pay a penalty of $173,880, which is 3X of the amount of GST evaded.

What does this mean to you?

For Singapore GST purposes, GST-registered businesses have to account for GST collected on the sale of non-residential properties as an output tax in their GST returns. At the same time, they can claim the GST paid on the purchase of non-residential properties as an input tax in their GST returns provided that the conditions for input tax claim are satisfied.

It is a serious offence to omit or understate output tax on sales. Offenders face a penalty that is up to 3 times the amount of tax undercharged, and a fine not exceeding $10,000 or imprisonment of up to 7 years or to both.

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