Five Indians were jailed and fined in Singapore for making fake Goods and Services Tax (GST) refund claims amounting to over SGD167,253. They committed these fraudulent acts between January, 2015 and May, 2016.
Kothandaraman Gnanam, 29, Karunanidhi Rajesh, 32, Ramaiyan Karthikeyan, 44, Waithiyalingam Karunanidhi, 61, were jailed for three years and three months while their accomplice, Karunanithi Saravanan, 37, was jailed for three years and two months.
They were also fined between SGD14,000 to SGD70,000. Each man also had to fork out SGD 51,952 Singaporean dollars as a penalty. However, only SGD5,434 worth of tax refunds made to the five men have been recovered.
There is a rule in Singapore that tourists visiting the country can claim GST refunds on goods they have bought when they leave the country. For this, they receive a receipt for goods purchased and an Electronic Tourist Refund Scheme (eTRS) ticket when they buy items from a GST-registered retailer. The tourist can reclaim the refund by showing the product, invoice and eTRS ticket at port of departure such as Changi Airport. The fraudsters reclaimed money misusing this rule.
In the court, it was proved that the men loitered in and around jewellery shops in 'Little India' area of Singapore to obtain invoices and jewellery tags from customers, who were Singapore permanent residents and work pass holders, not entitled to GST refunds. They would buy the invoices from the customers but no mention was made on the amount they paid for each invoice.
These five Indian men then used their passports and white embarkation cards to obtain eTRS tickets from the respective shops using the receipts they had obtained.
They then matched the invoices, jewellery tags and eTRS tickets with the jewellery they already had at hand. The men would then claim eTRS GST cash refunds at the airport.
Investigators from the Inland Revenue Authority of Singapore (Iras) arrested all the guilty persons on February 1, 2017.