Five Indian nationals jailed for making false GST refund claims

The five men used their passports and white embarkation cards to obtain eTRS tickets from the respective shops using the receipts they had obtained.
The five men used their passports and white embarkation cards to obtain eTRS tickets from the respective shops using the receipts they had obtained. PHOTO: IRAS
When there were not enough valuables to go around, they would share among themselves the same piece of jewellery to present to officers for checks.
When there were not enough valuables to go around, they would share among themselves the same piece of jewellery to present to officers for checks. PHOTO: IRAS

SINGAPORE - Five Indian nationals, who were part of a syndicate, were jailed on Monday (April 24) for making fraudulent goods and services tax (GST) refund claims involving up to $167,253.53 between January 2015 and May last year.

Kothandaraman Gnanam, 29, Karunanidhi Rajesh, 32, Ramaiyan Karthikeyan, 44, and Waithiyalingam Karunanidhi, 61, were each jailed for three years and three months. Their accomplice, Karunanithi Saravanan, 37, was jailed for three years and two months.

They were fined between $14,000 and $70,000. Each man also had to fork out $51,952.71 as a penalty.

To date, only $5,434.95 worth of tax refunds made to the five men have been recovered.

The court heard that the men loitered in and around jewellery shops in Little India to obtain invoices and jewellery tags from customers such as Singapore permanent residents and work pass holders, who are not entitled to GST refunds.

They would buy the invoices from the customers but no mention was made on the amount they paid for each invoice.


Illustration of a tourist refund fraud. PHOTO: IRAS

Tourists visiting Singapore can claim GST refunds on goods they have bought when they leave the country. They receive a receipt for goods purchased and an eTRS ticket when they buy items from a GST-registered retailer.

They can then use the eTRS ticket to make GST refund claims at ports of departure such as Changi Airport. They can also make similar transactions using the credit cards which they had used to buy their goods.

The five men used their passports and white embarkation cards to obtain eTRS tickets from the respective shops using the receipts they had obtained.

They then matched the invoices, jewellery tags and eTRS tickets with the jewellery they already had at hand.

Karunanithi Saravanan also provided jewellery from his own wholesale purchases to his accomplices to help them in making false claims.

The men would then claim eTRS GST cash refunds at the airport before flying off.

When there were not enough valuables to go around, they would share among themselves the same piece of jewellery to present to officers for checks.

Investigators from the Inland Revenue Authority of Singapore (Iras) nabbed them on Feb 1, this year.

On Friday (April 21), the men pleaded guilty to 14 GST-related charges involving $17,317.57 each. Each man also had between 198 and 235 similar charges taken into consideration during sentencing.

They also removed from Singapore a total of $112,924, which were ill-gotten gains from their criminal conduct. Each man pleaded guilty to between seven and 11 charges of removing money from the country. .

Anyone who makes a false GST refund claim, or assists another person to make it, faces a penalty of up to three times the amount of refund wrongfully claimed, a fine up to $10,000, and/or up to seven years' jail.