What is carousel fraud?

IN its simplest form, GST carousel fraud is referred to as missing trader fraud. A contrived supply chain engineered for carousel fraud would typically start with an importation of goods and the sale of the same goods to a domestic buyer with GST collected.

The seller then disappears without handing over the GST to the tax authorities. The goods then change hands via a series of businesses (which act as a buffer) with the last party exporting the goods (which are zero-rated).

The syndicate continually re-exports and re-imports the same goods in a "carousel" system, with the last party in the chain making a GST claim for the goods purchased to be exported.