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FINANCIAL SERVICES | Staff Reporter, Singapore
Published: 09 Nov 11
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Busted!: IRAS sends Mr Tan Kim Teck to jail after defrauding GST Comptroller

Tan failed to evade punishment even after burning his business records to destroy evidence of fraud.

The Inland Revenue Authority of Singapore said:

Mr Tan Kim Teck thought he could shake IRAS off his trails by burning his business records to destroy evidence of fraud, but IRAS brought him to task for creating false GST claims to defraud the Comptroller of GST. Tan was sentenced to eight months and two weeks’ jail, as well as fined $413,880 in court.

No time-limit on fraud charges

Tan was charged in court with intent to evade tax via TKT Trading to defraud the Comptroller of GST of $219,596.42 in taxes over an eight-year period from 2000 to 2007. He had made fictitious entries in 29 GST returns and failed to keep proper records as required under the law.

IRAS can take to task tax evaders for periods beyond the seven-year statutory time-bar where fraud has been committed.

Tan began his business as the sole-proprietor of TKT in 1996. The principal business of TKT is wholesale of parts and accessories for vehicles. He registered for GST in 1998 and was responsible for submitting the GST declarations for TKT since registration.

Fictitious GST entries and destruction of evidence

GST-registered persons can offset the GST they pay on their purchases against the GST they charge on sales, and pay the net difference to IRAS. If a business incurs more GST on purchases than it collects from sales, it can claim a refund of the shortfall from IRAS. Refunds can arise in exports, because exports are zero-rated (i.e. the business need not collect GST on exports) but the GST is incurred on purchases.

Businesses can only claim input tax if they have indeed exported the goods, incurred the GST on purchases and also satisfied the essential conditions for making claims. Businesses may refer to www.iras.gov.sg for details.

IRAS’s investigations revealed that Tan had declared fictitious input tax claims in his GST returns from September 2000 to September 2007, by adding transhipments goods of TKT (these goods were transferred from importing vessels to the exporting vessels and therefore, did not enter Singapore) into the GST returns under the value of taxable purchases when in fact, no GST was incurred. Investigations further revealed that Tan had burned the physical copies of the records so as to impede IRAS’s investigations when he realised that IRAS requested records to assess the amount of tax undercharged.

Subsequently, Tan admitted that he had obtained fraudulent refunds from the Comptroller of GST due to greed.

Tan, the sole-proprietor of TKT, pleaded guilty to the 11 charges of creating false entries in his GST returns to evade tax, and 3 charges for destruction of supporting documents. 18 charges of creating false entries were taken into consideration for sentencing. He faced a penalty of $413,880, which is 3 times the amount of tax undercharged.



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Tags: Tan Kim Teck sentenced to jail, IRAS case against Tan Kim Teck, Tan Kim Teck defrauds GST Comptroller

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