SINGAPORE - A former company director has been sentenced to 125 days in jail, in default of a penalty and fine he cannot pay, for unlawfully charging goods and services tax to his customers in 2012.
Kumarselvam Veejay Koumar, 31, was the director of MV Global Trading, which was registered as a general wholesale trade firm, the Inland Revenue Authority of Singapore said in a statement on Friday (Jan 19).
Despite knowing that his company was not GST-registered, Kumarselvam's company charged a total of $3,791.21 in GST on 102 sales invoices issued to its customers from June 13 to Aug 13 in 2012.
The Singaporean, who was director of the firm from April 4, 2012, to Aug 13, 2012, was the person in charge of managing and overseeing MV's operations at the time, investigations by Iras revealed.
Additionally, he personally prepared and issued three of 34 sales invoices and instructed his employees to prepare and issue the other sales invoices to customers, which charged the prevailing rate of GST on these sales. The "GST" amount was indicated on the sales invoices the company issued.
As MV was not GST-reigstered, the company did not file any GST returns or account for the "GST" collected from MV's customers to the Comptroller of GST.
Kumarselvam on Friday pleaded guilty to 34 charges.
For being a director when MV unlawfully charged $3,791.21 as GST, the court sentenced Kumarselvam to a penalty of $11,373.63, three times the amount shown as tax, and a fine of $51,000.
As he could not pay these amounts, Kumarselvam was sentenced to a default of 125 days in jail. Another 68 similar charges were taken into consideration in sentencing.
His offences were detected during a check by Iras, which conducts audits to identify non-compliance with GST laws, including checks on whether businesses charge and collect GST correctly.
It is a serious offence for businesses that are not GST-registered to charge and collect GST from customers, Iras said.
Those found guilty of doing so face a penalty of three times the amount of tax unlawfully collected and a fine of up to $10,000 for each offence.
Anyone can check if a business is registered for GST on Iras' website using the business name or business registration number.
Those who wish to report cases of malpractices by businesses can write to Iras' Investigation and Forensics Division at 44, Newton Road, Revenue House, or send an e-mail to firstname.lastname@example.org
A reward based on 15 per cent of the tax recovered, capped at $100,000, will be given to informants if the information and/or documents provided lead to the recovery of tax that would have otherwise been lost.
All payments are at the discretion of the Comptroller, and Iras will ensure that the identities of informants are kept strictly secret and confidential.