Seller who evaded GST fined $190k

Branded bags sold at a public sales event organised by LovethatBag LLP.
Branded bags sold at a public sales event organised by LovethatBag LLP. PHOTO: LOVETHATBAG/FACEBOOK

Luxury goods retailer evaded $50k in GST by underdeclaring value of his imports

A branded handbag and wallet seller who evaded more than $50,000 in goods and services tax (GST) was fined $190,000 on Wednesday.

Yu Chung Tan, 47, a partner of LovethatBag, did so by instructing his suppliers from Europe, Hong Kong and the United States to indicate the value of the goods imported as below $400 in import documents submitted to the Singapore Customs, a spokesman for the agency said. Goods imported by parcel post, except dutiable goods, are not subject to GST when their value is below $400.

Between October 2011 and October 2013, Yu, a Singaporean, imported 2,338 branded handbags by parcel post on 41 occasions, the Singapore Customs said. Its spokesman added that investigations found that between April 2012 and February 2014, Yu had travelled overseas on 14 occasions and bought 519 items, including branded bags, wallets, shirts, umbrellas and shoes, to sell in Singapore.

Despite knowing that goods imported for sale in Singapore are subject to GST, Yu did not declare them for GST payment when he arrived at Changi Airport, the spokesman said. "Yu's intention was to save on the cost of his goods so as to price them more competitively to generate more sales," she added.

The shop's website says branded goods can be bought at a discount of up to 75 per cent at one-day public sales. "We have paved a gateway of affordability," it said.

Yu pleaded guilty to 18 charges. Another 37 charges were taken into consideration in the sentencing. If he fails to pay the fine, he faces jail of about one year and seven months.

UNETHICAL MOTIVES

Yu's intention was to save on the cost of his goods so as to price them more competitively to generate more sales.

SINGAPORE CUSTOMS SPOKESMAN, on Yu's failure to declare his goods.

A check on Facebook showed that the company, which sells goods from brands like Prada, Celine and Louis Vuitton, has a following of almost 90,000 people.

Another recent case of GST evasion was that of electric scooters importer Tan Ting Sin, 29. In September last year, he was fined almost $100,000 for underdeclaring the import value of the goods, resulting in a shortfall of more than $81,000 in GST payment.

Under the Customs Act, any person found guilty of fraudulent evasion of GST is liable to a fine of up to 20 times the amount of tax evaded and/or be jailed for up to two years.

"We are keeping a close watch on such illegal practices by retailers," said Ms Fauziah Abdul Sani, head of the trade investigation branch at Singapore Customs.

Those with information on smuggling activities, or evasion of customs duty or GST can e-mail the Singapore Customs at customs_intelligence@customs. gov.sg.

A version of this article appeared in the print edition of The Straits Times on April 29, 2016, with the headline 'Seller who evaded GST fined $190k'. Print Edition | Subscribe