The man faces charges over allegedly making false entries in the company’s GST returns to evade GST amounting to more than S$4.26 million. - PHOTO: BT FILE
SINGAPORE (The Straits Times/ANN): A 45-year-old man, who is suspected of carrying out goods and services tax (GST) fraud involving the fake sale of items totalling more than $250 million (RM880 million), will be charged in court on Tuesday (April 9).
The police and Inland Revenue Authority of Singapore (Iras) said in a joint statement on April 8 that the alleged offences by the man – the sole director and shareholder of a Singapore-incorporated, GST-registered firm – came to light after investigations by the Commercial Affairs Department and Iras.
Between October 2012 and June 2014, the man is alleged to have fraudulently traded high-value electronic goods totalling about S$252 million through the company, before creating false invoices to support GST refund claims by exporters.
The man is believed to have also forged invoices from suppliers.
The man also faces charges over allegedly making false entries in the company’s GST returns during the same period of time to evade GST amounting to more than S$4.26 million.
For the alleged offences, the man will be charged with 16 counts of GST evasion. Each charge carries a term of imprisonment of up to seven years, a fine, or both.
He will also be charged with two counts of fraudulent trading, over being a knowing party to a fraudulent business. For each charge of fraudulent trading, he can be jailed for up to seven years, fined, or both.
He will be charged with one amalgamated count of forgery over forging suppliers’ sales invoices. Multiple instances of the same criminal offence can be combined into a single charge for some offences to allow for cases to be dealt with more effectively.
For each count of forgery, an offender can be jailed for up to four years and fined.
Lastly, he will be charged with two amalgamated counts of falsifying accounts. Each charge carries a term of imprisonment of up to 10 years, a fine, or both.
The statement said the authorities will take stern enforcement action against perpetrators of such offences, which are known as GST Missing Trader Fraud.
In such schemes, a group of businesses form a supply chain where, at each step of the process, the seller charges GST on the goods sold.
The original upstream seller then disappears without paying the collected GST to Iras, hence the term “missing trader”, the statement said.
In the meantime, the goods sold are exported by the last seller. This seller then claims a refund from Iras on GST paid on the goods, as these exports are zero-rated and therefore exempt from GST.
If Iras refunds the last seller, this will result in a loss to the state because the missing trader at the start of the chain failed to pay GST that he had collected for selling the goods.
In some of these schemes, the goods do not exist.
Since Jan 1, 2021, any GST-registered business that makes GST claims on any supply made to it, which it knew or should have known to be part of a Missing Trader Fraud arrangement, will be denied GST and be subject to a 10 per cent surcharge on the tax denied.
The statement said: “Businesses are therefore strongly advised to perform due diligence checks and take appropriate action to address the risks identified to avoid participating in transactions suspected to be part of a Missing Trader Fraud arrangement.” - The Straits Times/ANN
