Research Fellow Convicted of GST Tourist Refund Fraud

9 Oct 2017

Engaged help of a tourist to claim a GST refund on a diamond ring

A Research Fellow, Bai Jiaming, aged 31, was convicted of two GST offences:

• 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.
  

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

Facts of the Case

Investigations revealed that Bai Jiaming colluded with his colleague, Zhang Baicheng and his colleague’s father, Zhang Yaoqun (“co-accused persons”) to carry out the GST refund fraud. Bai Jiaming, 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 Jiaming 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 Jiaming, with a one-way air ticket to Jakarta bought on 10 March 2017, 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 Jiaming. Bai Jiaming 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 Jiaming 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 offences and their cases are still pending before the court.  

Penalties for Tourist Refund Fraud  

The Inland Revenue Authority of Singapore (IRAS) takes a serious view of anyone who makes false declarations to seek GST refunds under the tourist refund scheme and abuses the scheme. IRAS works closely with the enforcement authorities to uncover any attempt to defraud GST.   

Under the GST Regulation, a person commits an offence for receiving goods from a tourist, directly or indirectly, knowing that the tourist has obtained approval for the refund. The person also commits an offence 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.

Inland Revenue Authority of Singapore  

Annex - Illustration Depicting the GST Tourist Refund Fraud