SINGAPORE: Vijay Kumar Muvva (“Vijay”), a 48-year-old former Group Executive Director of Ensoft Consulting Pte Ltd (“Ensoft”), has become the first individual to be convicted and jailed for unauthorized collection of GST under section 64A of the Goods and Services Tax Act (Cap 117A, 2005 Rev Ed) (“GST Act”). He was also convicted for failing to notify the Comptroller of Ensoft’s liability to register for GST.
Vijay’s Sentencing:
Failure to Notify the Comptroller of Ensoft’s Liability to Register for GST:
- A fine of $2,000 (or 5 days imprisonment in default)
- A penalty of $13,961 (or 10 days imprisonment in default)
Unauthorized Collection of GST:
- 7 weeks’ imprisonment
- A penalty of $83,300 (or 60 days imprisonment in default)
Case Highlights
Ensoft operates in employment, recruitment, and manpower outsourcing for the IT industry. By 31 December 2017, Ensoft’s taxable supplies exceeded $1 million, requiring GST registration notification to IRAS by 30 January 2018. Vijay, aware of GST requirements due to his directorship of another GST-registered company, did not comply. Despite Ensoft not being GST-registered, Vijay authorized his employees to collect GST from clients.
Penalties for Non-Compliance
Unauthorized Charging and Collection of GST:
Charging and collecting GST without being GST-registered is a serious offense. Offenders will pay a penalty of three times the amount collected or attempted to be collected and may face a fine of up to $10,000, imprisonment for up to 3 years, or both.
How to Check if a Business is GST-Registered:
The public can verify a business’s GST registration status on the IRAS website using the business name or registration number.
GST Registration:
Businesses must monitor their income yearly to determine if GST registration is necessary. If their 12-month taxable turnover exceeds $1 million, they must apply for GST registration by 30 January of the following year and will be registered by 1 March. If a business expects its taxable turnover to exceed $1 million within the next 12 months, it must register for GST within 30 days of this forecast, effective from the 31st day of the forecast date.
Failing to register for GST results in liability for GST on all past transactions from the date of required registration, even if not collected from customers. Additionally, failing to register is an offense, with penalties including 10% of the GST due and a fine of up to $10,000.
IRAS conducts audits to ensure compliance with GST laws, including proper charging and collection of GST by businesses.
Source: IRAS
