15 cases of GST evasion by online retailers and importers in last 2 years

Brand-name bags sold at a public event organised by LovethatBag. Yu, the online retailer's partner, was fined $190,000 on April 27 for evading more than $50,000 in GST.
Brand-name bags sold at a public event organised by LovethatBag. Yu, the online retailer's partner, was fined $190,000 on April 27 for evading more than $50,000 in GST.PHOTO: LOVETHATBAG/FACEBOOK

Courts have heard 15 cases involving more than $440,000 during the past two years

There have been 15 cases of online retailers and importers being prosecuted for evading Goods and Services Tax (GST) involving a total of more than $440,000 over the past two years.

Singapore Customs, which revealed the figures to The Straits Times, said there were seven such GST evasion cases in 2014, and eight last year. A spokesman said: "The offenders are usually Singaporeans who import branded goods such as handbags, wallets, shoes and apparel, and household goods such as robotic vacuum cleaners for sale locally."

They attempted to evade GST by using fictitious invoices showing a lower value for the goods for their import declarations, and avoiding payment of GST upon returning from overseas trips by not declaring their hand-carried goods at the Customs' Red Channel.

So far this year, one seller has been prosecuted.

On April 27, branded handbag and wallet seller Yu Chung Tan, 47, was fined $190,000 for evading more than $50,000 in GST.

The 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 Singapore Customs.

 
 

Goods imported by parcel post, except dutiable goods, are not subject to GST when their value is below $400.

Yu's intention was to save on the cost of his goods so as to price them more competitively, Singapore Customs said.

"Singapore Customs closely monitors the compliance status of companies, and will take enforcement action against those who do not comply with Customs requirements," the spokesman added.

The authority holds regular industry outreach programmes to remind companies of the need to comply with Customs regulatory requirements, including the payment of GST on hand-carried goods.

Criminal lawyer Amolat Singh said: " These retailers have a misunderstanding that because they operate online, they can get away with it. But sooner or later, the law catches up with them."

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

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

A version of this article appeared in the print edition of The Straits Times on May 09, 2016, with the headline 'GST evasion by online retailers and importers'. Print Edition | Subscribe