A case of unauthorised issuing of tax invoice and collection of GST
Recently, a manager was found to have unlawfully collected and charged Goods and Services Tax (GST) with a total of 1,095 sales invoices that were issued to his customers.
As a result of this act, he was charged with fines, penalties and imprisonment.
The manager had unlawfully charged $19,772.80 as GST for the 1,095 sales invoices. As such, he had to pay an amount of $136,118.40 in total on penalties and fines. This is more than 6 times the amount of GST collected! On top of that, he has to serve a total of 320 days imprisonment for this unlawful act. The Inland Revenue Authority of Singapore (IRAS) also compounded some of his offences that was twice the amount of GST wrongfully charged by him on the sales invoices.
Did you know that IRAS conducts regular audits on businesses? Well. This is to identify businesses that are not in compliance with the GST laws. As for this case, it was uncovered in one of such audit programmes. This programme is one that checks whether businesses claim, charge and collect GST rightly.
In this case, the manager’s business is not a GST-registered person. IRAS’ investigations conducted audits and revealed that from 21 Nov 2002 to 11 Jun 2010, he had issued sales invoices which reflected the prevailing rate of GST to the businesses’ customers when he was not supposed to do so. Guess what he did with these funds? He deposited the money into the business’ bank account, and used the money to pay not only for his business and family expenses, but also his credit card bills.
Who can charge GST on sales and The Penalties of Non-Compliance?
Only GST-registered businesses are permissible to charge GST on their sales. As you had understood from this scenario that happened, it is an offence for any non GST-registered businesses to issue tax invoices that charges and collect GST on their sales. Offenders face a penalty of three times the amount of tax shown on the invoice and are liable to a fine of up to $10,000.
J Accounting Services in Singapore would like to remind everyone about the importance of properly collecting and reporting of GST to the IRAS. Unlawful collection and GST reporting could lead to hefty fines and penalties imposed. For those who may be keen in seeking professional assistance in your GST reporting, you will be glad that we offer this service as well.
