GST is also known as Goods and Services Tax. It is also the latest way of implementing, assessing and collecting tax for goods in Singapore. In addition to this, GST is also somehow related to Value Added Tax that is being utilized by other countries in the world. This poses a challenge for practitioners who need to easily track the cases and at the same time quickly grasp the full implications of every decision. GST-registered companies act as an agent that is collecting GST on behalf of Government and do the GST submission to Government authority (IRAS) in the certain time frame. However, there are companies that using this opportunities to have unlawful act.

The Case

UnlawfulThe court ordered Double H and their 61 year old manager known as Fong Looi Hoei to pay a court fine and penalty of S$295,258.65. This is due to the unlawful collection of S$30,000 of the GST customers during the time that the company was not yet a certified and qualified GST company. According to some researches, unlawful collection of the GST can be defined as a serious offence especially to businesses that are not GST registered. They don’t have any right to charge and collect GST from their respected customers. Offenders will face a penalty that is equivalent to 3 times the amount of the tax collected without a fine and authorization. Aside from this, offenders need to pay a total of S$10,000 for each offence. On the other hand, IRAS is the one that is responsible to conduct audit program. By doing this, you can easily and quickly identify the non-compliance of GST laws that includes checking on business charge and claim as well as collect GST accurately. Moreover, this case was uncovered in audit program. Our firm can give advice in GST regulations and a lot more.

How the offence was committed?

The business is being run by Fong together with her husband. Fong is the one who is in-charge of the bookkeeping, administrative and accounting matters of the company. They decided to set up a new company called Double H on the 16th day of June 2005. In addition to this, the investigations of IRAS revealed that Fong issued 156 invoices with GST between the months of December 2004 up to July 2006. Fong unlawfully collected S$38,371.80 in the GST of her customers during the time that Double H and DHSM were not officially registered for GST. On August 1, 2006, Double H was officially registered for GST. During this time, Fong faced 198 charges on her unlawful collection of GST and at the same time Fong pleaded guilty for 66 charges. Furthermore, Fong needs to pay a penalty of S$91,598.70. The court decided to fined Fong and Double H a total of S$1,200 which amounted to a total of S$141,600. Double H needs to pay a penalty amounting to S$62,059.95 on his 52 charges with a remaining of 104 charges for sentencing.

We are a professional firm that provides outsource accounting service in Singapore and consultancy to your business in rule and regulation in Singapore to avoid any unlawful or error occur. We do assist Companies to do their company’ accounts, tax, GST, secretarial, payroll and a lot more. Please find out more in our services.