THM International Import & Export : “High Court Dismisses Appeal Firm $1.3M Refund Claim Iras”

Accident – Death – Obituary News : : 1. Iras refund claim appeal
2. High Court dismissal firm appeal

The Inland Revenue of Authority rejected a wholesale company’s claim for over $1.3 million in input tax refunds in 2020. The company, THM International Import & Export, purchased $19.7 million worth of goods from a local supplier and exported them to Malaysia. Despite presenting evidence, the claims were rejected due to lack of proof of delivery and authenticity of the transactions. The company appealed to the High Court but was unsuccessful. Iras argued that the burden of proof lay with the company to show deliveries were made. The court dismissed the appeal, highlighting doubts about the transactions’ veracity. The case is documented as THM International Import & Export Pte Ltd v Comptroller of Goods and Services Tax (2024) SGHC 97.

A wholesale company based in Singapore, THM International Import & Export, recently found itself in a legal battle with the Inland Revenue Authority (Iras) over a claim for more than $1.3 million in input tax refunds. The company’s appeal to the High Court was unsuccessful, marking the first time such a case has been brought before the court.

**Background of the Case**

THM International Import & Export reportedly purchased $19.7 million worth of micro SD cards and flash drives from a local supplier and then exported the goods to two customers in Malaysia. The company claimed input tax refunds for these supplies, which were said to have taken place between April 1, 2016, and August 31, 2016.

**Rejection of Claims**

In August 2020, Iras rejected the claims, citing a lack of conclusive evidence of the delivery of the goods and questioning the authenticity of the business transactions. The company then appealed to the GST Board of Review, which upheld Iras’ decision. Subsequently, THM took the case to the Supreme Court, where the appeal was dismissed.

**Court Ruling**

In his written ruling dated April 5, Judge Aedit Abdullah dismissed the appeal on the grounds that the company had failed to provide evidence to challenge the board’s factual findings. The court’s role in such cases is limited to questions of law or mixed law and fact.

**Arguments Presented**

During the appeal hearing, THM presented documents showing the receipt of goods from its supplier and their subsequent sale to customers. However, Iras argued that the burden of proof lay with the company to demonstrate the delivery of goods to its customers.

**Evidence Presented**

Iras conducted an audit of THM’s operations and found discrepancies in the alleged transactions. The authority pointed out that the goods in question were not manufactured by the claimed supplier and could not be traced in the market. Additionally, the commercial agreements were deemed questionable and lacking credibility.

**Board’s Decision**

The GST Board of Review agreed with Iras, citing doubts about the authenticity of the transactions. The increase in transaction volume and tax claims, coupled with the inability to trace the goods to the manufacturer, raised red flags for the board. The commercial agreements were described as “bizarre and incredulous.”

**Conclusion**

In a landmark ruling, the High Court upheld Iras’ decision to reject THM International Import & Export’s input tax refund claims. The case highlights the importance of providing clear and verifiable evidence in support of tax claims. It also serves as a reminder to businesses to maintain transparency and integrity in their transactions to avoid legal disputes.