Tan Zi Hong ("Tan"), 32, a director and one of the shareholders of Asia Pacific Restaurant Pte Ltd ("APRPL"), was convicted in Court on 24 July 2020, for unlawful collection of Goods and Services Tax (GST) amounting to $6,891 from their customers when the company was not GST-registered. Investigations revealed that between December 2012 and February 2014, the company had charged and collected GST on a total of 183 receipts issued to their customers.

In addition, Tan as a director of APRPL was convicted of one charge of having failed to notify the Comptroller of GST of the company’s liability to be registered for GST when its sales had crossed the $1 million threshold.

As a result, Tan faced a total of 184 charges for unlawful GST collection and one charge of failing to register for GST.

Court Sentences

For the 61 proceeded charges for unlawful collection of GST, Tan was sentenced to pay a total penalty of $10,197, which is three times the amount of GST unlawfully collected and a fine totalling $73,200. The remaining 122 similar charges were taken into consideration in sentencing.

For one charge on failing to register for GST, the Court fined Tan $4,000 and ordered him to pay a penalty of $9,940, a sum of 10% of the GST due.

Penalties for Non-Compliance

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. 

GST Registration
All businesses, including individuals deriving income from their trade, profession or vocation, should closely monitor their income on a calendar year basis to assess if they need to register for GST. If their 12-month taxable turnover has exceeded $1 million at the end of the calendar year, they will be required to apply for GST registration within 30 days. Any business that fails to register for GST is still required to pay GST on all their past transactions from the date the business became liable for GST registration. GST is payable even if the amount was not collected from customers. In addition, failure to register for GST is an offence and businesses may be required to pay 10% of GST due as a penalty and fined up to $10,000.

Unauthorised charging and collecting 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 three 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 checks on whether businesses charge and collect GST correctly.

Cash Rewards for Informants

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 will ensure that the identities of informants are kept strictly confidential.

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 or report malpractices can write to:

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

Email: [email protected]

Inland Revenue Authority of Singapore