A construction company and its director have been fined $57,500 after pleading guilty to charging Value Added Tax (VAT) on a series of government contracts despite not being registered with the Board of Inland Revenue (BIR).
Sukhai Industries Limited and its director Sanjeev Sukhai, both of Freeport, were slapped with the fine after they pleaded guilty to five tax offences during a virtual hearing before Magistrate Adia Mohammed, last Friday.
According to the evidence presented in the case by special prosecutor Evans Welch, the charges arose out of five contracts to repair schools for the National Maintenance Training and Security Company (MTS).
The company won the tenders for the contracts in 2018 and completed the work between January and September, last year.
While the company charged 12.5 per cent VAT on services it provided, which was almost equal to the eventual fine it received, it was later discovered that it was not VAT registered and did not pay the claimed VAT to the BIR.
Presenting a mitigation plea on the company and Sukhai’s behalf, their attorney Anita Ramnanan claimed that the issue was due to an error as her client informed BIR’s criminal tax investigator Rawle Sookhoo when he was first confronted. She also noted that her clients repaid the additional fees to the State company, while the case was still pending.
Welch challenged the claim as he pointed out that in October 2018, the BIR wrote to the company and pointed out that it did not qualify to be VAT registered.
As he called for a severe penalty, Welch noted that in its invoices to MTS, the company used the reference number, cited by the BIR in its correspondence, as its VAT registration number.
In passing the sentence on the company and Sukhai, Mohammed noted that its actions could not be put down to an error as claimed.
She also stated that the offence was a serious one of fraud and dishonesty and should be dealt with as such.