Director of freight forwarding company who evaded paying over $1m in GST fined $4.4m, jailed

SINGAPORE - A sole director of a freight forwarding company was fined $4,419,000 and jailed eight months on Thursday (June 23) for fraudulently evading goods and services tax (GST) on the import of goods and falsifying documents.

Singapore Customs said on Friday that Ho Shyan Tien, 44, evaded paying about $1,250,000 in GST between 2015 and 2019 by providing false values of goods imported by his customers on 632 occasions.

The Singaporean pleaded guilty in court to three charges over the fraudulent evasion of GST involving 327 falsified invoices totalling about $745,000 and to three other charges over falsifying documents involving 328 permits.

Six other charges were taken into consideration during the sentencing.

Singapore Customs said the Inland Revenue Authority of Singapore (Iras) conducted a check in June 2019 on the GST return submission made by one of Ho's customers who is an importer.

It found discrepancies in the cargo clearance permits - which are required by an importer to account for the import and tax payment of the goods - and got Singapore Customs' help to verify the GST amount paid by the importer.

Said Singapore Customs: "It was found that the GST amounts stated in the importer's copy of the (permits) were higher than what was in Singapore Customs' records. Further verification with the importer showed that the importer had paid the GST amounts reflected in their copy of the (permits)."

Singapore Customs investigated Ho's company Sea-Net and found that he masked the original values in the invoices from his customers by pasting altered values over them.

He photocopied the falsified invoices and provided them to a declaring agent in order to apply for the cargo clearance permits.

Ho received some of the invoices in an editable document which allowed him to amend the values directly.

The declaring agent would pay Customs the GST based on the documents it received from Sea-Net and bill Sea-Net the amount, before sending the cargo clearance permits to Sea-Net once they were approved.

"Ho's actions resulted in the under-declaration of the values of the goods and under-payment of GST to Singapore Customs," said the government agency.

To conceal his scheme, Ho altered the values and GST amounts stated in the approved cargo clearance permits and gave them to his customers, giving them the impression that the correct GST amounts were paid to Singapore Customs.

He profited from the difference between the GST amount collected from his customers and the lower GST amount paid to the State through the declaring agent.

Singapore Customs advises importers to conduct checks on declarations made on their behalf by their freight forwarders or declaring agents, and suggests that traders sign up for the Trader Notification Service to receive notifications relating to permit declarations.

For each charge of fraudulently evading GST, Ho could have been fined up to 20 times the amount evaded.

He could have also been fined up to $10,000, jailed up to 12 months or both for falsifying documents.

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