Six men charged over alleged involvement in GST fraud case
Case linked to about $114 million in fictitious sales
Six men were hauled to court yesterday over their alleged involvement in a goods and services tax (GST) fraud case linked to about $114 million in fictitious sales.
Referring to it as a "GST missing trader fraud" case, the Singapore Police Force and the Inland Revenue Authority of Singapore (Iras) said in a joint statement that this was the first prosecution involving such a ruse.
They added that because of the fraud, Iras received claims in GST refunds totalling nearly $8 million.
The six, all Singaporeans, are Lee Chong Hoong, 41; Alvin Chua Han Soon, 42; Wong Meng Fai, 43; Tay Tiong Kiong, 43; Ang Chee Keong, 45; and Koh Soo Lin, 61.
They are accused of committing their offences in 2015 and 2016.
Tay faces a single forgery charge.
The other five men were each handed between two and four charges for offences including forgery as well as those under the Companies Act.
Lee, Chua, Wong and Ang are said to be the ones behind fraudulent operations linked to wholesale trading company Nagore Trading.
Police and Iras, however, said that it is allegedly a shell company with no real business operations.
At the time of the alleged offences, Koh was the director of two firms dealing with computer-related products - Ten Directions Enterprises and Forte Communications.
He is said to have facilitated the fraud by allowing the two companies to buy non-existent goods from Nagore Trading.
All three GST-registered companies are incorporated in Singapore. Tay is accused of helping Wong and Lee to commit forgery.
Explaining how the ruse worked, police and Iras said that in a GST missing trader fraud case, a group of businesses would typically form an arrangement where goods are sold through a supply chain.
At each stop along the chain, the seller charges GST on the goods sold.
The agencies added: "The original upstream seller then disappears without paying the collected GST to Iras, hence the term 'missing trader'.
"In the meantime, the goods sold down the chain are exported by the last seller in the chain."
Since exports are zero-rated, the last seller does not collect GST on the exports. Instead, it claims a refund from Iras on the GST paid on its purchases of goods.
If Iras were to refund this last seller, the state would suffer a loss as the "missing trader" did not pay the GST he had collected for his sale of goods at the chain's start.
The six men's cases have been adjourned to Sept 1.
For each count of forgery, an offender can be jailed for up to four years and fined.
For each charge under the Companies Act, an offender can be jailed for up to seven years and fined up to $15,000.