Five jailed for false GST claims

The five Indian nationals abused the eTRS scheme by making claims for jewellery they did not buy. Only $5,434.95 worth of tax refunds made to the men have been recovered.
The five Indian nationals abused the eTRS scheme by making claims for jewellery they did not buy. Only $5,434.95 worth of tax refunds made to the men have been recovered.PHOTO: IRAS

Five Indian nationals who were members of a syndicate that made fraudulent goods and services tax (GST) refund claims involving up to $167,253.53 were jailed yesterday.

They had also removed from Singapore benefits of their criminal conduct, totalling $112,924.

Kothandaraman Gnanam, 29, Karunanidhi Rajesh, 32, Ramaiyan Karthikeyan, 44, and Waithiyalingam Karunanidhi, 61, were each jailed 39 months. Their accomplice, Karunanithi Saravanan, 37, was jailed 38 months. On Friday, they had pleaded guilty to 14 GST-related charges involving $17,317.57.

As a penalty, each man has to fork out $51,952.71, which is three times that amount. They were also fined between $14,000 and $70,000.

Each man also had between 198 and 235 similar charges taken into consideration during sentencing.

They committed their offences between January 2015 and May last year. They abused the electronic tourist refund scheme (eTRS) by making claims for jewellery they did not buy.

With eTRS, tourists leaving Singapore can claim GST refunds on goods they buy here. When buying items from a GST-registered retailer, they get a receipt and an eTRS ticket. They can then use the ticket to make GST refund claims at ports of departure.

The court heard that the men loitered in and around jewellery shops in Little India to buy invoices and jewellery tags from customers such as permanent residents and work pass holders, who are not entitled to eTRS refunds.

The men then used their passports and embarkation cards to obtain eTRS tickets from the shops.

They would match the invoices, jewellery tags and the eTRS tickets with jewellery they had, because these had to be presented to officers for Customs inspection.

The men would then claim eTRS GST cash refunds at the airport before flying off.

Investigators from the Inland Revenue Authority of Singapore (Iras) nabbed them on Feb 1 this year.

The arrests followed a joint operation by Iras and Singapore Customs on May 27 last year, in which the men were caught red-handed while making fraudulent GST refund claims at Changi Airport.

To date, only $5,434.95 worth of tax refunds made to the five men have been recovered.

In a joint release yesterday, the police, Iras and Singapore Customs said that in a move to prevent similar offences, retailers now have to install CCTV surveillance systems in their shops to record eTRS ticket issuance and sales processes.

It said: "They must also indicate prominently on each sales invoice, whether or not an eTRS ticket has been issued at the point of sale."

A version of this article appeared in the print edition of The Straits Times on April 25, 2017, with the headline 'Five jailed for false GST claims'. Print Edition | Subscribe