Sports and concerts event promoter, Midas Promotions Pte Ltd (“Midas”), has been ordered to pay to IRAS $786,000 in taxes and penalty and a court fine of $7,000 as it failed to register for GST.
A business with annual taxable supplies exceeding $1 million is required to register for GST. The onus is on the business to regularly assess whether they are required to be registered for GST. IRAS’ investigations revealed that Midas’ taxable supplies exceeded $1 million for the four quarters ending 30 Jun 2004, 30 Sept 2004, 31 Dec 2004 and 31 Mar 2005. It failed to inform the Comptroller of GST of its liability to register for GST.
The total GST not accounted by Midas amounted to $714,696.87 between 1 Jun 2005 and 30 Apr 2012. In addition to paying the GST, Midas has to pay a penalty equal to 10% of the amount of the tax due. This amounted to $71,469.69. Midas was also fined $7,000 by the Court.
Penalties for failure to register for GST
IRAS reminds businesses to follow GST registration rules by closely monitoring their taxable turnover at the end of each quarter and ensuring that they promptly register for GST when their turnover exceeds $1 million per year. Regular audit programmes are carried out by IRAS to
identify cases liable for compulsory GST registration.
Businesses failing to register for GST even though they are required to do so by law can be fined up to $10,000 and pay a penalty equal to 10% of the tax due from the date on which the business is required to register for GST. The business’ effective date of GST registration will be back-dated to the day that its liability to register arose. Consequently, the business will have to pay the outstanding GST on all its past transactions since the effective date of registration, even if this amount was not collected from its customers.
Source: IRAS, 28 March 2014