A director of Robofusion Asia, which supplies robotic ice- cream machines, was sentenced to six weeks' jail yesterday after he was convicted of evading the goods and services tax (GST).
American Robert Taramelli had overstated the GST input tax on his company's GST return.
Taramelli, 44, was also ordered to pay a penalty of $107,004, which is three times the GST input tax of $35,668, while Robofusion was fined $8,000 and ordered to pay a penalty of $107,004. He and the company were found guilty after a five-day trial.
Their lawyer, Mr Jonathan Wong, successfully applied for the sentences and penalties to be stayed, pending appeal.
The GST charged and collected from customers is known as output tax, which has to be accounted for and paid to the Inland Revenue Authority of Singapore (Iras). GST incurred on taxable business purchases and expenses is known as input tax. The difference between the two taxes is the net GST payable to or refundable from Iras.
Taramelli was convicted of helping Robofusion to evade the tax by keeping a false record. He had included a false invoice he had created, purportedly from Denso International Asia showing GST amounting to $35,668, into Robofusion's taxable purchases listing.
He included the GST figure from the false invoice in the amount of input tax claimed in the firm's GST return for the accounting period from Sept 1 to 30, 2013. The false invoice was for the supposed purchase of 10 machines from the supplier for $509,541.
Investigations showed the actual tax invoice had been claimed in the firm's GST return for an earlier accounting period in June that year.
Iras said in a statement yesterday that it detected anomalies in declarations made by Taramelli in Robofusion's GST returns during its regular audits. It said it is a serious offence to claim GST input tax on fake purchases or to understate output tax on sales.
Offenders face a penalty of three times the tax undercharged, a fine of up to $10,000 and/or a jail term of up to seven years.
Iras senior tax prosecutor Tham Siok Peng had sought a sentence of at least two months' jail. Among the aggravating factors she cited was Taramelli's lack of remorse.
In April this year, Robofusion was ordered to pay a penalty of $60,000 for giving false information in a Productivity and Innovation Credit (PIC) cash payout application. Another director was fined $4,000 and ordered to pay a penalty of $120,000 for intentionally aiding it to make the false claim.