Five Indian nationals were charged in court yesterday with making fraudulent Goods and Services Tax (GST) refund claims involving a total of $167,253.
They each faced more than 200 counts of abetment by conspiracy to make false statements in claims made under the GST Act to obtain refunds of GST.
They are: Kothandaraman Gnanam, 29; Karunanidhi Rajesh, 32; Karunanithi Saravanan, 36; Ramaiyan Karthikeyan, 43; and Waithiyalingam Karunanidhi, 63.
The men faced 1,197 charges in all. They allegedly tried to abuse the electronic tourist refund scheme (eTRS) by making claims for jewellery they did not personally purchase.
Inland Revenue Authority of Singapore (Iras) investigators nabbed them on Wednesday. These arrests followed a joint operation by Iras and Singapore Customs on May 27 last year, in which the men were caught red-handed for allegedly making fraudulent GST refund claims at Changi Airport.
The Indian nationals were each offered bail of $50,000 and will be back in court on Feb 24.
A joint press release by Iras and Singapore Customs stated that tourists can claim GST refunds on goods they have bought and taken out of Singapore. Those who do not purchase anything but seek or obtain a GST refund under the tourist refund scheme commits an offence under the GST Act.
Under the eTRS, a tourist receives a receipt for goods purchased and an eTRS ticket when he buys items from a GST-registered retailer that participates in the scheme. The tourist can then use the eTRS ticket to make a GST refund claim 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.
In a GST refund-claim fraud scenario, an offender will pretend to be a tourist and pay local customers, who are not entitled to eTRS refunds, for their jewellery invoices.
With these invoices and by using a passport, the offender will obtain eTRS tickets from the respective shops. He will then claim eTRS GST cash refunds at ports of departure.
According to the press release, Iras takes a serious view of such fraudulent GST refund claims and will not hesitate to take stern enforcement action against these individuals and anyone assisting them.
Anyone who commits the offence of wilful intent to make a false GST refund claim, or assist any other person to make such a false claim, faces a penalty of up to three times the amount of refund wrongfully claimed and a fine not exceeding $10,000, and/or imprisonment of up to seven years.