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Tuesday, April 8, 2014

Penang tells Putrajaya to spell out GST exemption for water supply

APRIL 8, 2014
Penang Chief Minister Lim Guan Eng says Putrajaya must specify if
water supply will escape the Goods and Services Tax (GST) to
be implemented next year. — Picture by Choo Choy May
GEORGE TOWN, April 8 ― Putrajaya must specify if water supply will escape the Goods and Services Tax (GST) to be implemented next year, Penang Chief Minister Lim Guan Eng said today.

With the state weighing a possible increase to the water tariffs, Lim said it was necessary for the federal government to state if the utility will be spared a further increase by coming under the essential goods and services that will be exempted from the consumption tax.

“The federal government said GST will not be imposed on essential goods and water is an essential service so they should not impose GST on it but we are unsure about it as the Bill is not clear,” he said.

“There are still so much confusion on the GST and I guess, we can only know if it will be imposed on water supply services next year when it is implemented,” he said.

The controversial new consumption tax system was passed by Parliament yesterday but there are still many grey areas in regards to the kinds of services and goods that are exempted from it, including water supply services.

The 187-page Bill stated that the tax “shall be charged and levied on (a) any supply of goods and services made in Malaysia, including anything treated as a supply under this Act and (b) any importation of goods into Malaysia”.

The Barisan Nasional government had assured the public that some essential consumer goods and services will be exempted but this was not clearly stated in the Bill.

The finance minister will have to determine the exempted goods and services before informing the Dewan Rakyat.

The GST is a consumption tax, meaning all Malaysians will be taxed according to their level of spending, regardless of income. This differs from income tax that is only applicable after a certain salary level is exceeded.

It will be levied at a rate of 6 per cent a year from now, at which it will be maintained until further notice.

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