Indian goes in for four years

A Bay of Plenty labour contractor has landed in jail for four years on proven charges of tax evasion.

Harbhajan Singh Kahlon admitted to 46 charges of evading PAYE remittance, after the Tauranga District court found him guilty on 23 charges of GST related fraud.

Inland Revenue Department officials, who brought charges against Kahlon, said that he had evaded more than $700,000 in tax.

He was engaged in supplying labour for vine management and kiwifruit picking in the Tauranga and Te Puke areas and for squash picking in Palmerston North.

The Court heard that he had registered his company to file GST returns and had claimed high expenditure, mainly for subcontractors in his tax returns.

IRD officials, who audited his business from April 2002 to March 2006, found that a number of subcontractors mentioned in Kahlon’s tax returns either had left the country or did not even exist.

“During the audit, he supplied subcontractor invoices for $2,814,096. We estimated that he had evaded GST of $312,677 by claiming these invoices in two monthly GST returns for his company. We spoke to a number of orchard owners who were not aware of any subcontractors involved in his business,” IRD Assurance Manager (Investigations) Jonathan Matthews said.

According to the Department’s estimates, the defendant had paid 90% of the amount ($2,814,096) to his workers as salary, involving about $400,000 in PAYE loss.

“This also deprived his workers of their entitlements to child support, student loan payments, social benefits and Working for Families tax credits,” Mr Matthews said.

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