The case started when a routine audit was initiated by the Inland Revenue Authority of Singapore (IRAS) on a GST return reporting a refundable position filed by our client. During the time of the audit, there were several manpower changes internally and the staff who handled the GST return under review had all left the company.

When asked about the basis of zero-rating its supplies as well as obtaining revised documentation to support its input tax claims in view that the current documentation had certain missing information, our client met with many challenges, including the fact that the team who was in charge of e-filing the GST return was no longer in the company and that the supplier whom the company tried to obtain revised documentation was under liquidation.

Without sighting the requested revised documentation reflecting the required information, the IRAS was in the position to disallow all our client’s input tax claims that were related to the same supplier which amounts to almost S$250,000.

Furthermore, our client, not being specialised in analysing GST treatments of the different transactions, had performed quantification of its supplies and declared to the IRAS that some of its zero-rated supplies were incorrectly classified and output tax should have been accounted (i.e. should have been classified as standard-rated supplies). The output tax quantum that was quantified was almost S$520,000.

Before engaging us as GST advisor, our client was prepared to pay nearly S$770,000 in GST to the IRAS to expedite the case. This amount was way more than the refund that was pending with the IRAS at that time.

However, their existing service provider (which was engaged to prepare its accounts and GST return after the previous team had left) advised them that it could be worthwhile to engage a specialist in the field of GST to advice further before embarking on their next step.

Based on our analysis of the information gathered by our client, we managed to put up the basis of zero-rating for their transactions and convince the IRAS that most of their transactions can qualify for zero-rating under one of the section 21(3) provisions.

We also managed to convince the IRAS that our client’s input tax claims should be allowed based on alternative documents even though our client was not able to obtain revised tax invoices for transactions that goes way back into the past.

All in all, we successfully helped our client save approximately S$760,000 in GST which could have been paid to the IRAS if no professional help was sought. The refunds that were held by the IRAS during the audit period was also disbursed to our client after the completion of the audit.