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.
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