SINGAPORE - A sole proprietor of a wholesale business has become the first person to be convicted for failing to issue tax invoices upon making taxable supplies to a goods and services tax-registered customer.

Investigations revealed that Tan Teck Seng, 61, did not issue such invoices to Lian Aik Enterprises for seven sale transactions amounting to $785,814 between 2010 and 2013.

Tan, whose company Tong Ann dealt with scrap, junk and waste, also made false entries in his quarterly GST returns between 2010 and 2012.

He omitted output tax on the taxable supplies that he made to 16 business entities by way of cash sales, which resulted in $195,558 of GST undercharged.

On Thursday (Feb 10), he was sentenced to 32 weeks' jail and fined $616,673.

For the four charges of making false GST entries with wilful intent to evade tax in his GST returns, Tan received the jail term and was ordered to pay $586,673, which is three times the amount of tax undercharged.

For the seven charges of failing to issue tax invoices as a GST-registered trader, he was fined $30,000.

He pleaded guilty to the 11 charges in November last year.

Tan's actions were uncovered when the Inland Revenue Authority of Singapore detected anomalies during its data checks to ensure tax compliance among individuals, businesses and the self-employed.

Offenders who wilfully evade tax by submitting false GST returns are liable to pay a penalty of three times the amount of tax undercharged and can be fined up to $10,000, or jailed up to seven years, or both.

Those who fail to provide tax invoices to GST-registered customers when making taxable supplies may be fined up to $5,000 and, in default of payment, may be jailed up to six months.