$5,695,823.65 being the tax undercharged.
Then multiply that amount by 3 to arrive at $17,087,470.95 penalty payable.
In return for that “contribution”, the person responsible gets 54 months of free food and free lodging in prison.
Who gets such “honours”?
The man is none other, Mr Mahesh Sukhram Daswani.
He was in the business of trading mobile phones. He subsequently found it more lucrative to “manage” (ie. forge) his business records very aggressively.
First;y, he under reported his sales ie. collected output GST from his customers and decided to keep a lot for himself.
Secondly, he kept himself busy with creating detailed but “fictitious” purchases. He probably used photoshop (just kidding) to digitally alter zero-rated suppliers’ invoices to standard-rated. He then directed his staff to include those invoices in the quarterly claims.
Thirdly, he had to go create export documents to show that the mobile phones had been exported. Export sales, remember is zero-rated. I guess he was trying to show how he was able to dispose off millions of dollars of phone purchased.
The trickeries of Mahesh are not new but definitely not sustainable.
1. IRAS would definitely be paying attention to who have been issued millions of dollars of refund cheques. A request for audit of the respective taxpayers’ books would be good practice.
2. In the press release, it was specifically highlighted that IRAS has used a lot of technologies to nab Mr Mahesh. Phrases such as “advanced computer forensics techniques”, “computerised analysis programmes” and “specialised computer forensic tools” were deliberately informed to public. Perhaps IRAS colleagues have exchanged notes with their colleagues in Commercial Affairs Department.
The moral of the story (as always) – Please don’t try to muck around with your GST returns.