What is the real deal & impact of GST?
GST key point & its impact affecting everyday Malaysians.
GST Key Facts
- Starting Apr 1, 2015
- GST is also known as VAT (Value Added Tax) in many countries
- Malaysia last Asian country to implement VAT
- GST calculated on final retail price different from Sales & Service Tax (SST) which takes into account the initial price of goods
- All business sales turnover > RM 500,000 must register
- Expected to raise RM23.2b revenue for Malaysian govt (VS SST RM13.8b; GST exempted RM3.8b)
- Customs more diversified collection base
- Consumer face inflationary costs
- Economic slowdown 6-12mths expected
- Businesses must submit 1mth after taxable period. Refund within 14d (online) or 18d (manual submission)
- Standard rated: Taxable goods & services subjected to standard rate.
- Zero rated: Taxable goods & services subject to zero rate. Not liable to GST at output stage. Business can claim back input tax.
- Exempt rated: Non taxable goods & services not subject to GST when supplied to consumer. However, GST paid by business cannot be claimed back.
GST Payable (previously no SST)
- RON97 (excluded: RON95, diesel, LPG)
- Utilities: Electricity (above 300units only)
- Bank legal fees (including MEPS RM1 withdrawal)
- Medical coverage, Critical illness insurance rider & insurance charges
- Standalone medical insurance & Personal Accident (P.A.) insurance coverage
- RM50 credit card government tax removed (yay!). Annual fees (if any) subject to GST.
- Books (except dictionaries, encyclopedias, newspapers, texts, reference & religious books)
- e-Books from local e-book suppliers (e.g. MPHonline)
- Tuition Center Students’ Fees
- Beauty Services (except at duty-free airport)
- Commercial property purchase
- Property maintenance fees
- Gold purchase
GST Payable for GST Registrant Only (Previously no SST)
- Rental income
- Sale of commercial property
- Sale of gold
- List of drugs/medication charged GST: gst.customs.gov.my
Note: Thanks to Meich for sharing the drugs list!