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Tuesday, March 25, 2014

`More need to be done before GST kicks in'

Publication: NST
Date of publication: Mar 25, 2014
Section heading: Business Times
Page number: 012

KUALA LUMPUR: With only 12 months to go before the goods and services tax (GST) kicks in, it looks like a lot more needs to be done by the government and the Customs Department to effectively communicate the finer points of the new tax system to the people.

That was the sentiment of a large number of participants at the GST Seminar 2014, organised by the Malaysian Financial Planning Council and Financial Planning Association of Malaysia, in collaboration with the Customs, here, yesterday.

A large number of the 200 participants, mostly financial planners, felt that the information trickling out was insufficient for their planning purposes or for them to advise their clients.

Detailed information on the GST can only be found on the Customs website.

Currently, the Customs updates GST information on its website as and when it receives updates from the government.

At the GST seminar, familiar highlights and facts of the impending GST implementation hit the limelights again.

The deadline for businesses to register themselves with the Customs for the GST is January 1 next year, three months it is to be implemented on April 1.

(Voluntary registration is up to six months before April 1.)

A source said there may be a daily fine of RM50 imposed on threshold-qualifying businesses that fail to register themselves with the Customs once the GST comes into effect.

The per annum income threshold under this scheme is RM500,000 and the GST rate is six per cent.

Under the GST, all supplies fall within four categories: standard rated, zero rated, exempt or out-of-scope.

Customs senior assistant director 1 Rohana Ahmad explained several details at the GST seminar - such as the threshold amount of businesses could change with the disposal of business assets (except capital assets, e.g. sale of building will not count).

She also highlighted that the GST is more transparent and members of the public will know exactly what can be taxed and what cannot as everything is listed in detail on the department's website.

She also said input tax and output tax do not have to match.

"The moment you register, you can claim input tax," she said.

All businesses must be registered with the Customs in order to claim tax, including business that are below the RM500,000 threshold, but wish to make business claims of input tax because of the fact that they are part of a supply chain.

At the moment, no finalised list of standard rated, zero rated, or exempt items/services exist, which explained why several participants at the GST seminar complained about the confusion among businesses and the public with regard to the GST.

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