Man jailed eight months for GST fraud, ordered to pay $500k penalty

Suneel Ramchandani, 39, was also ordered to pay a penalty of $534,945 - or three times the amount of tax undercharged.
Suneel Ramchandani, 39, was also ordered to pay a penalty of $534,945 - or three times the amount of tax undercharged.ST PHOTO: WONG KWAI CHOW

SINGAPORE - A former manager of an export business who made false declarations to claim $178,315 in goods and services tax (GST) refunds was jailed for eight months on Friday (July 21).

Suneel Ramchandani, 39, was also ordered to pay a penalty of $534,945 - or three times the amount of tax undercharged.

The former manager of Indibiz, an export business for luxury watches and electronic products, pleaded guilty to four out of eight charges of evading GST.

GST-registered businesses are allowed to offset the GST they pay for their purchases, or input tax, against the GST they collect from sales, known as output tax.

They pay the net difference to the Inland Revenue Authority (Iras).

Those that incur more GST on purchases than what they collect from their sales can claim the difference from Iras in the form of GST refunds.

Under the GST Act, exports of goods and international services are zero-rated. This means GST-registered businesses need not collect GST on these exports. But a business that exports its goods overseas may still claim the full amount of GST incurred on its purchases.

Indibiz was first a sole proprietorship. It was converted to a partnership business with one Sreyashi Sengupta in February 2009. Suneel later withdrew from the partnership but remained as a manager and was in charge of the GST account of the firm.

Investigations showed that Suneel provided Iras with falsified purchase invoices showing "Indibiz'' as the purchaser of the goods when none was made.

Other falsified documents included purchase orders said to be issued by Indibiz, as well as subsidiary export certificates said to be issued to Indibiz to support the exports for zero-rated supplies, whereby no output tax will be due to Iras.

From July 2009 to October 2010, Suneel made false entries in Indibiz's GST returns to fabricate false input tax claims and zero-rated supplies to enable Sreyashi to claim fraudulent GST refunds totalling $178,315.

In another tax crime on Friday (July 21), Chin Jin Han, 38, who ran wholesale trading company Mah Sing, was fined $5,000 and ordered to pay a penalty of $112,796 for providing false information in the company's Productivity and Innovation Credit (PIC) cash payout application form in 2013.

Mah Sing was ordered to pay a penalty of $56,398 for the PIC cash payout that was wrongfully claimed.

Correction note: The story has been updated to reflect that it was Mah Sing and not Chin Jin Han that was ordered to pay the $56,398 penalty. We are sorry for the error.