Company Director Convicted for Unlawful GST Collection

19 Jan 2018

19 Jan 2018: Kumarselvam S/O Veejay Koumar (“Kumarselvam”), 31, who was a director of MV Global Trading Pte Ltd (“MV”), flouted the law when his company MV unlawfully charged Goods and Services Tax (GST) on a total of 102 sales invoices issued to MV’s customers.

Kumarsalvam pleaded guilty to the 34 charges proceeded on. For being a director when MV unlawfully charged $3,791.21 as GST, the court sentenced Kumarselvam to a penalty of $11,373.63, three times the amount shown as tax, and a fine totaling $51,000. In default of paying the penalty and fine, he has to serve a total of 125 days’ imprisonment. Another 68 similar charges were taken into consideration in sentencing.

Facts of the Offence
IRAS’ investigations revealed that MV was not GST-registered and its director, Kumarselvam, knew that MV was not GST-registered. The offences were detected only because of IRAS’ efforts in conducting checks on businesses before allowing any business to register for GST.

Investigations further revealed that Kumarselvam was the person in charge of managing and overseeing MV’s operations at the relevant time. He had personally prepared and issued 3 of the 34 sales invoices and instructed his staff to prepare and issue the other sales invoices to customers, which charged the prevailing rate of GST on these sales. The “GST” amount was reflected on the said invoices issued.

As MV was not GST-registered, the company did not file any GST returns or account for the “GST” collected from MV’s customers to the Comptroller of GST.

Penalty for unauthorised charging and collecting of GST

It is a serious offence for businesses that are not GST-registered to charge and collect GST from their customers. Offenders face a penalty of three times the amount of tax unlawfully collected and a fine of up to $10,000 for each offence. 

IRAS conducts audits to identify non-compliance with GST laws, including checks on whether businesses charge and collect GST correctly.

How to Check if a Business is GST-Registered?

Members of the public can check if a business is registered for GST on IRAS’ website (www.iras.gov.sg) using the business name or business registration number. 

Report GST Malpractices to IRAS

Anyone who wishes to report cases of malpractices by businesses can write to:
Inland Revenue Authority of Singapore
Investigation & Forensics Division
55 Newton Road, Revenue House
Singapore 307987
Email: ifd@iras.gov.sg

Cash Rewards for Informant

A reward based on 15% of the tax recovered, capped at $100,000, will be given to informants if the information and/or documents provided lead to the recovery of tax that would have otherwise been lost. All payments are at the discretion of the Comptroller. IRAS will ensure that the identities of informants are kept strictly secret and confidential. 
                    
Inland Revenue Authority of Singapore