Category Archives: GST

Singapore GST – Research Fellow Convicted of GST Tourist Refund Fraud


It was reported in IRAS’ website on 9 October 2017 that a research fellow, Bai Jiaming was convicted of the following GST offenses:

  • Engaging the help of a tourist to claim a GST refund of $1,543.93 for a $23,600 Tiffany & Co. diamond ring (the “ring”) purchased by him; and
  • Obtaining a Prada bag (the “handbag”) and the ring from the tourist after a GST refund of $1,791.87 had been claimed on the two items.

Investigations revealed that Bai colluded with his colleague, Zhang Baicheng and his colleague’s father, Zhang Yaoqun (“co-accused persons”) to carry out the GST refund fraud. Bai, the purchaser of the ring did not qualify for a GST refund under the Electronic Tourist Refund Scheme (“eTRS”) as he was not a tourist and was in fact, working in Singapore.  At Zhang Baicheng’s suggestion, Bai procured Zhang Yaoqun to obtain approval for a GST refund even though Zhang Yaoqun was not entitled to the said GST refund as he was not the purchaser of the ring.

On 11 Mar 2017, Bai, with a one-way air ticket to Jakarta bought on the previous day,  went with Zhang Baicheng and Zhang Yaoqun to the Singapore Changi International Airport. Zhang Baicheng and Zhang Yaoqun had return air tickets for Bangkok. All three checked in at their respective ticket counters and entered the transit area. Thereafter, Zhang Yaoqun made the GST refund claim for the handbag and the ring at the transit area in Changi International Airport, Terminal 3. Zhang Yaoqun had the said handbag and ring in his possession at the time that the GST refund was approved.

After obtaining approval for a GST refund, Zhang Yaoqun gave the handbag and ring to Zhang Baicheng who in turn gave them to Bai. Bai knew that Zhang Yaoqun had obtained approval for a GST refund of $1,791.87 under the eTRS in respect of both the handbag and ring. Bai then attempted to leave the transit area with the handbag and ring and was stopped by an ICA officer for suspected misuse of a boarding pass.

Both Zhang Baicheng and Zhang Yaoqun were charged on 28 Jul 2017 for their offenses and their cases are still pending before the court.

The court sentenced Bai to a total fine of $7,000. If he defaults on payment of the fine, he will have to serve four weeks’ imprisonment.

What does this mean to you?

IRAS takes a serious view of anyone who makes false declarations to seek GST refunds under the tourist refund scheme and abuses the scheme.    Under the GST Regulation, a person commits an offense for receiving goods from a tourist, directly or indirectly, knowing that the tourist has obtained approval for the refund. The person also commits an offense for engaging another person to seek or obtain an approval for a refund under the tourist refund scheme. Offenders shall be liable on conviction to a fine not exceeding $5,000 and in default of payment to an imprisonment for a term not exceeding 6 months.

If you have any questions regarding the above, contact support@whm-consulting.com

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Singapore GST – ASK Annual Review Guide (5th Edition) Updated


IRAS has updated its GST ASK Annual Review e-Tax Guide (5th Edition) on 5 September 2017.   One of the major amendment to the 5th Edition is summarised below:

 Introduction of the administrative concession for common errors disclosed through the ASK Annual Review

IRAS has introduced a list of administrative concession for common errors discovered in the course of ASK Annual Review, which can be found here.  Taxpayers may consider taking advantage of these administrative concessions if their errors fall within the scenarios described and if the prescribed conditions (if any) are satisfied without the need of seeking any advance approval from the Comptroller of GST.

Take note that unless otherwise stated, the administrative concessions will only apply to past errors and businesses are required to take remedial actions to prevent recurrence of the errors.

Taxpayers who adopt any of the administrative concessions are required to complete the “ASK: Declaration Form on ASK Administrative Concessions” and submit it to IRAS and retain the declaration for at least 5 years.

If IRAS discovers that a business has either wrongly applied, abused any concession, made a false or incorrect declaration or failed to take remedial actions, enforcement actions (such as the recovery of tax and the imposition of penalties) may be taken against the business.

The scenarios cited in the administrative concessions list are not exhaustive. For scenarios not covered in the guide or other publications issued by IRAS (e.g. other GST guides or Practice Notes), taxpayers are advised to write to IRAS, providing full details of the errors. It is not necessary to write in for situations already covered in IRAS’ publications.

If you have any questions, contact support@whm-consulting.com.

Singapore GST – Former Manager of Export Business Jailed for GST Fraud


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.

If you have any questions, contact support@whm-consulting.com.

Singapore GST – Robotic Ice-Cream Machine Company Director Sentenced to Jail for GST Evasion


It was reported in the IRAS’ website on 6 July 2017 that Robofusion Asia Pte Ltd (“Robofusion”), which is a company in the business of supplying robotic ice-cream kiosks, has been convicted of evading GST  by overstating GST input tax on its GST return. Robert Taramelli (“Taramelli”), the company director, was also convicted for his role in assisting the company to evade GST.

IRAS’ investigations revealed that Taramelli assisted Robofusion to evade tax by maintaining a false record, i.e. by including a false invoice dated 10 Sep 2013 that he had created, purportedly from a supplier, showing GST amounting to $35,667.85, into Robofusion’s taxable purchases listing.  He included the GST amount of $35,667.85 in the amount of input tax claimed in Robofusion’s GST return for the accounting period 1 Sep 2013 to 30 Sep 2013. The false invoice was for the supposed purchase of 10 units of a machine by Robofusion from the supplier for the total amount of $509,540.72.  Investigations revealed that the actual tax invoice, which had the same invoice number, had already been claimed in Robofusion’s GST return for an earlier accounting period ended Jun 2013.

For his offense of willful intent to assist Robofusion to evade tax, Taramelli was sentenced to 6 weeks’ in jail and ordered to pay a penalty of $107,003.55, which is 3X of the GST input tax of $35,667.85.

Robofusion was sentenced to pay a penalty of $107,003.55, which is 3X the amount of GST undercharged, and a fine of $8,000.

If you have any questions regarding the above, please contact support@whm-consulting.com.

Singapore GST – GST Tax Changes on Budget 2017


It was announced in the Budget 2017 that with effect from 1 July 2017, the GST Tourist Refund Scheme (TRS) will be withdrawn for tourists who are departing by the international cruise from the cruise terminals.

Tourists who are departing by the international cruise from the cruise terminals and have made purchases before 1 July 2017 have until 31 August 2017 claim the refunds on such purchases.

The eTRS facilities at the cruise terminals will be removed after 31 Aug 2017.

What does this mean to the retailers?

Retailers who continue to issue the tickets on or after 1 July 2017 will be committing an offense under the GST (General) Regulations and can be penalized.

IRAS has updated the following e-Tax Guides on 22 Feb 2017 accordingly.

–   GST: Electronic Tourist Refund Scheme (eTRS)
–  GST: Guide for Visitors on Tourist Refund Scheme
  GST: Guide for Retailers participating in Tourist Refund Scheme

If you have any questions, contact us at support@whm-consulting.com.