Tag Archives: IRAS

Income Tax – Former Director of Engineering Company Sentenced to Jail and a Penalty for Assisting in Income Tax Evasion


It was reported in IRAS’ website on 8 September 2017 that Kuah Pong Guan (“Kuah”), a former director of Wesco Engineering Pte Ltd (“WEPL”), a company involved in fabrication of metal works, has been convicted of assisting WEPL to evade tax by not reporting a total of 81 cash sales made to its customers in WEPL’s income tax returns for Years of Assessment (“YAs“) 2009 and 2010.

Investigations revealed that for these two YAs, Kuah sold metal parts to customers on a cash basis without issuing any invoices, and did not report the earnings from such sales in WEPL’s income tax returns.  Kuah did so to pocket these earnings for gambling and to pay off his own creditors.  By doing so, Kuah had also assisted WEPL to evade income tax by under-declaring WEPL’s income earned.

For YA 2009, Kuah declared WEPL’s sales income to be $62,253, understating actual income by $730,697, which resulted in income tax being undercharged by $114,109.02. For YA2010, he declared a loss of $205,475 for WEPL’s sales income, when it had, in fact, earned a profit of $77,246. This resulted in income tax being undercharged by $3,906.09.

Kuah was charged and convicted for assisting WEPL to evade income tax by providing false information in WEPL’s income tax returns for YAs 2009 and 2010. The Court ordered Kuah to pay a penalty of $354,045.33, three times the amount of tax undercharged for both YAs, and sentenced him to two weeks imprisonment.

What does this mean to you?

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who wilfully evade tax. Taxpayers are ultimately responsible for the information declared in their income tax returns. The authority will not hesitate to bring offenders to court. Penalties for tax evasion can be up to four times the amount of tax evaded. In certain situations, jail terms may also be imposed.

If you have any questions, 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.

Income Tax – Wholesale Trader and Company to Pay Penalties of $169,194.60 and Fine of $5,000 for False PIC Claim


It was reported in IRAS’ website on 21 July 2017 that Chin Jin Han (“Chin“), who was running a wholesale trading company, Mah Sing Pte. Ltd (“Mah Sing”), has been convicted of providing false information in the company’s Productivity and Innovation Credit (“PIC”) cash payout application form.

Chin submitted a PIC cash payout application form to IRAS, under Mah Sing’s name, in Apr 2013. He obtained the signature of Mah Sing’s sole director, his mother-in-law who left the running of the business to him, and completed all the required fields in the PIC cash payout application form.

IRAS’ Investigations revealed that Mah Sing did not purchase the two servers and three workstations (“the equipment”) at the purported cost of $93,997, as declared in the PIC cash payout application form. The invoices that showed the purchase of the equipment were false.

Both Mah Sing and Chin were convicted of giving false information to the Comptroller of Income Tax, in order to obtain a PIC cash payout and Bonus which the company was not entitled to.

The court ordered the company to pay a penalty of $56,398.20 which is a one-time penalty of the amount of the PIC cash payout that was wrongfully claimed.

Chin was convicted of giving false information to the Comptroller of Income Tax to assist Mah Sing to obtain a PIC cash payout, which Mah Sing was not entitled to when no such purchase had in fact taken place. The court ordered Chin Jin Han to pay a penalty of $112,796.40, which is two times the amount of PIC cash payout that was wrongfully claimed, and a fine of $5,000.

What does this mean to you?

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. Under the Income Tax Act, anyone convicted of an offence of abusing the PIC scheme will have to pay a penalty of up to four times the amount of PIC cash payout fraudulently obtained or which would have been obtained if the offence had not been detected, and a fine of up to $50,000 and/or imprisonment of up to five years.

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.

Income Tax – Director Behind PIC Sham Convicted


It was reported in IRAS’ website on 20 July 2017 that Selladorai Dharmalingam (“Selladorai”), the sole director of Al Bright Construction Pte. Ltd. (“Al Bright”), has been convicted and sentenced for abusing the Productivity and Innovation Credit (PIC) scheme by giving false information to illegally obtain a PIC cash payout and bonus for Al Bright.

IRAS’ investigation revealed that Selladorai authorized the submission of the PIC Cash Payout Application Form by Al Bright to claim $50,461.20 in PIC cash payout and $15,000 in PIC bonus, for the purported expenditure of $84,102 to purchase an electric overhead crane.  However, there was no such expenditure incurred by Al Bright nor any such equipment was purchased.

Selladorai was convicted of giving false information to the Comptroller of Income Tax in order to obtain a PIC cash payout and PIC bonus which the company Al Bright was not entitled to. The court ordered Selladorai to pay a fine of $3,500 and a penalty of $100,922.40, twice the amount of PIC cash payout that Al Bright had wrongfully obtained, and sentenced him to 12 weeks’ imprisonment in default of payment.

What does this mean to you?

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. Offenders convicted of PIC fraud will have to pay a penalty of up to four times the amount of cash payout fraudulently obtained, or which would have been obtained if the offence had not been detected, and a fine of up to $50,000 and/or imprisonment of up to five years.

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