A construction company and its director were each ordered by the court to pay a penalty of $191,268 - two times the amount of GST evaded - and a fine of $2,000 for failing to account for GST on the sale of a property at Woodlands Industrial Park.

Junling Construction & Engineering Pte Ltd ("Junling Construction & Engineering") and its director, Cheah Wai Fun, 52, were charged for not reporting the amount of GST collected from the sale of a property in the company's GST return in 2011.

Offence to omit output tax on sale of non-residential property

IRAS' investigations revealed that Junling Construction & Engineering sold a non-residential property at Woodlands Industrial Park on 9 Feb 2011. The buyer paid Junling Construction & Engineering $1.38 million for the property and $96,600 for the 7% GST on the selling price.

Cheah Wai Fun, who was responsible for filing GST returns and issuing tax invoices for Junling Construction & Engineering, did not account for the $96,600 collected as an output tax in the company's GST return for the accounting period ended 31 Mar 2011. As the director of Junling Construction & Engineering, Cheah Wai Fun had failed to ensure the accuracy of Junling Construction & Engineering's GST return.

Together, Junling Construction & Engineering and Cheah Wai Fun have to pay a total penalty of $382,536 and total fine of $4,000 for the GST offence.

Charging and Accounting for GST

Businesses may buy and sell properties in the course of their business. Under the GST law, GST-registered businesses have to account for GST collected on the sale of non-residential properties as an output tax in their GST returns. They can also claim the GST paid on the purchase of non-residential properties as an input tax in their GST returns.

Penalties for Making Incorrect GST Return

It is a serious offence to omit or understate output tax on sales. Offenders face a penalty that is double the amount of tax undercharged, and a fine not exceeding $5,000 or imprisonment of up to 3 years or both.

Reporting of Malpractices

Businesses or individuals are encouraged to immediately disclose any past tax mistakes. IRAS will treat such disclosures as mitigating factors when considering action to be taken. Those who wish to disclose past mistakes, reveal evaded taxes, or report malpractices that might indicate tax evasion, can write to:

Inland Revenue Authority of Singapore
Investigation & Forensics Division
55 Newton Road, Revenue House
Singapore 307987

Email: [email protected]

Cash Rewards for Informant

A reward based on 15% of the tax recovered, capped at $100,000, would be given to informants if the information and/or documents provided lead to a recovery of tax that would have otherwise been lost. All payments are at the discretion of the Comptroller. IRAS would ensure that the identities of informants are kept strictly confidential.