GG Construction Pte Ltd (“GG Construction”) and its 42-year-old manager, Lee Tai Leong (“Lee”), have to pay a penalty totalling $227,850 and a court fine of $2,400 for unlawfully collecting a GST amount of $37,975 when the company was not registered to collect GST.

Unlawful collection of GST
It is a serious offence for businesses that are not GST-registered to charge and collect GST from their customers. Offenders face a penalty of 3 times the amount of tax unlawfully collected, and a fine of up to $10,000 for each offence.

IRAS conducts audits to identify non-compliance with GST laws, including checking whether businesses charge and collect GST correctly. This case was uncovered in one such audit.

Facts of the offence
GG Construction and its manager, Lee, were both not GST-registered during the offence period in 2012. Lee was in charge of preparing and issuing quotations and invoices to customers for the renovation works carried out by GG Construction. Lee committed the offence of unlawful collection of GST when he issued an invoice dated 6 Mar 2012, with a GST amount of $37,975 shown on the invoice, to a company for the sale of a property at 71 Toh Guan Road East owned by GG Construction. 

Court Sentences
GG Construction and Lee faced a similar charge each for the unlawful collection of GST. Both the company and Lee have to pay a penalty of $113,925 each. This is three times the amount of GST unlawfully collected.

The court also fined both GG Construction and Lee a total of $2,400.

How to check if a business is GST-registered?
Members of the public can check if a business is registered for GST on IRAS’ website (www.iras.gov.sg) using the business name or business registration number.

Report GST malpractices to IRAS
Anyone who wishes to report cases of malpractices by businesses 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.

Inland Revenue Authority of Singapore