Fine for four men who took part in GST tourist refund scam

SINGAPORE - To make fraudulent claims under the electronic Tourist Refund Scheme (eTRS), a syndicate came up with a simple ruse.

They waited around jewellery stores in Singapore and negotiated to buy invoices from actual customers.

Working with employees of the same jewellery store, these men would then obtain the eTRS refund ticket issued by the retailer to collect goods and services tax (GST) refunds at the airport.

Investigations showed the syndicate made more than $167,000 in fraudulent GST tourist refund claims.

On Tuesday (July 2), four men who worked for Abiraame Jewellers in Little India were sentenced for their role in the scam.

Shanmugam Sampathkumar, 33; Murugesan Saravanan, 42; and 49-year-old Arumugam Chelladurai are Indian nationals. The fourth employee - Pang Wei Koon, 46 - is from Malaysia.

Arumugam, who is also a Singapore permanent resident, was fined $12,000 after pleading guilty to eight charges under the GST (General) Regulations.

Pang was fined $1,500 after pleading guilty to one charge while Shanmugam, who pleaded guilty to two, was fined $3,000.

District Judge Adam Nakhoda sentenced Murugesan to a fine of $6,000 after he admitted to four charges. Each man was linked to between $600.56 and $5,265.73 in claims.

Court documents did not state if all four men, who committed the offences in 2015 and 2016, are still working for Abiraame Jewellers.

The syndicate members - Kothandaraman Gnanam, 29; Karunanidhi Rajesh, 32; Ramaiyan Karthikeyan, 44; and 61-year-old Waithiyalingam Karunanidhi - were sent to jail in 2017.

By the time these four men were caught, they had removed from Singapore benefits of their criminal conduct totalling $112,924.

Tax prosecutor Rajiv Rai, from the Inland Revenue Authority of Singapore (Iras), told the court on Tuesday that the eTRS process begins when a tourist buys an item from a participating GST-registered retailer.

To make a GST refund claim under the scheme, the tourist must have items including the invoice of the goods purchased and the eTRS refund ticket issued by the retailer.

The tourist can then obtain the GST refund at the airport after using either the eTRS self-help kiosk or by approaching a Singapore Customs officer at an inspection counter.

Describing how the scam was carried out, Mr Rai said the claimants would loiter in and around jewellery stores to try to obtain invoices from actual customers.

He added: "Once a customer agreed to sell or give the invoice, a claimant would give his passport and embarkation card... to an employee of (Abiraame Jewellers) for the purposes of making an application for a GST refund under the claimant's passport number.

"The employee would enter the details of the claimant and the jewellery purchased into the eTRS system."

The employee would then print an eTRS refund ticket for the claimant to unlawfully obtain at the airport GST refunds which they were not entitled to.

In a statement on Tuesday, Iras said that it will "not hesitate to take stern enforcement actions against any individuals who commit the offence of wilful intent to make a false GST refund claim or, assist any other person to make false claims".

It added: "Iras will also not hesitate to take firm action against retailers who are complicit or negligent in the issuing of eTRS tickets leading to the abuse of the Tourist Refund Scheme."

The cases involving three other men, who also worked at Abiraame Jewellers, are still pending.

They are Singaporean Palaniappan Ramanathan, 41, and Indian nationals Manickavasagam Saravanan, also 41, and Kulamani Ganesan, 31.

Those convicted of the offence under the GST (General) Regulations can be fined up to $5,000 for each charge.

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