Robotic ice-cream machine company fined S$8,000 for GST evasion; director gets six weeks’ jail
Reuters file photo
SINGAPORE – In the first case of GST evasion which went to trial in over a decade, a robotic ice-cream machine company was on Thursday (July 6) fined S$8,000 by the district court. Its director also received a six-week jail term for his role in helping the firm evade Goods and Services Tax (GST) amounting to over S$35,000 back in 2013.
On top of the fine and jail sentence, Robofusion Asia and its 44-year-old director, Robert Taramelli, an American, have to pay a penalty of S$107,003.55 each, which is three times the amount of GST that was evaded.
Court documents showed that the firm had intended to evade tax by overstating an input tax amounting to a total of S$35,667.85 in its GST return for the accounting period which ended in September 2013.
An input tax is added to the price when a buyer, in this case Robofusion Asia, purchases good or services.
Traders can offset the input tax they pay on their purchases against the GST they charge, or output tax, on sales, and paying the net difference to the taxman.
GST returns are usually required to be filed during a prescribed accounting period, which might be on a monthly or quarterly cycle.
During its regular audits of GST-registered businesses, the Inland Revenue Authority of Singapore (Iras) detected anomalies in the declarations made by Taramelli on Robofusion’s GST return.
Investigations revealed that Taramelli had helped his firm evade GST by creating a false invoice, supposedly from the firm’s supplier, Denso International Asia, dated Sept 10, 2013.
Taramelli had claimed that the false invoice was supposedly for the purchase of 10 units of a machine from Denso, which cost a total of S$509,540.72.
The fake invoice, which showed a GST amount of S$35,667.85, was included into Robofusion’s taxable purchases listing.
Taramelli then included the GST figure from the false invoice in the amount of input tax claimed in the company’s GST return for the accounting period which ended in September 2013.
However, Iras’ investigations showed that the firm had filed an earlier tax invoice — with the same invoice number as the false document — for the same Denso purchase during the accounting period which ended in June 2013. In the actual invoice, the cost of buying the machines amounted to only S$14,080, while the input tax was only S$985.60, significantly lower than what Robofusion had filed in the fake document.
Speaking in court on Thursday, Iras senior tax prosecutor Tham Siok Peng, who sought an eight-week jail term, said GST evasion offences are “grave offences”, and that Taramelli’s actions were deliberate. She added that a fine would be “manifestly inadequate”.
In sentencing Taramelli, District Judge Crystal Ong also granted him a stay of execution, as both he and the firm are appealing against the sentences. Taramelli does not have to serve the jail term immediately, and is currently out on S$30,000 bail pending the appeal.
