SINGAPORE - For the first time, the taxman exercised its new powers of arrest to nab 10 people for their suspected involvement as key members of a criminal syndicate, the Inland Revenue Authority of Singapore (Iras) said on Wednesday (Nov 13).

The syndicate is believed to be involved in illegal goods and service tax (GST) refund claims.

The tax authority acquired powers of arrest under the amended GST Act, which came into effect on Jan 1.

The amendment allows Iras' authorised officers to arrest, without warrant, any person they believe is making, attempting to make, or involved in making illegal tax refunds.

The taxman's officers can also arrest anyone who possesses goods seized for these tax frauds, or anyone who has made such fraudulent claims in connection with any refund he got.

Iras said on Wednesday that it had conducted islandwide raids on criminal syndicates suspected of being involved in a type of illegal GST refund claim called GST carousel fraud.

The raids were done from Oct 23 to 24, and Tuesday to Wednesday, on 36 business entities in 73 locations, including Kallang Pudding, Tampines and Choa Chu Kang.

About 200 electronic devices and business records were seized in the operation and 41 people are currently assisting Iras investigations. Of these people, 10 were arrested.

Cases of GST carousel fraud often involve multiple companies and businesses selling and exporting goods to each other without paying GST. But they would still claim the GST paid on the exported goods, which is effectively seeking a refund of the GST amount that the tax authority never received.

Iras said that it takes a serious view of such fraud and will not hesitate to take stern enforcement actions against offenders.

It warned that anyone who wilfully evades or assists any other person to evade GST faces a penalty of up to three times the amount of the tax evaded and a fine of up to $10,000, and/or a jail term of up to seven years.

Mr Lawrence Eng, the assistant commissioner of Iras' investigation and forensics division,said tax evaders are becoming more sophisticated.

"Today, we deal with more syndicated groups whose members may have been involved in past criminal activities. Some suspects can be very uncooperative; they try to destroy paper documents or refuse to hand over evidence," said Mr Eng.

"With our new powers of arrest, our investigators can be more effective in bringing the perpetrators to justice."