GIG v Comptroller: Commercial Substance and GST Input Tax

Key steps and distinctions

GIG claimed S$102,288.20 input tax on five processor purchases in July and August 2018. It asserted that goods were bought and resold, but the Board found insufficient proof that the transactions occurred in the course or furtherance of its business. Supplier and buyers were prearranged, its margin was set externally, paperwork and same-day payments were coordinated, and the supposed supplier and customers shared control. The appellant provided no convincing documentary evidence of its asserted negotiations or commercial contribution beyond financing GST. The unusual settlement of a sixth transaction further undermined its explanation. The Board did not need to determine the separate contention that actual processors never existed after resolving the business-purpose issue, although missing stock, serial-number and testing evidence raised doubts. A supplier’s GST registration was not a guarantee of input-tax entitlement. The appeal was dismissed, with S$64,000 inclusive costs. The Board expressly distinguished failure to prove entitlement from finding that GIG knowingly attempted to defraud IRAS; its willing or unwilling participation remained unclear. The practical issue is evidence of real commercial activity and the taxpayer’s own role, rather than an assumption that invoices and payment alone establish a taxable business purchase.