The Customs Department’s top man on the Goods and Services Tax (GST) has said that price increases on goods following the introduction of the new tax is due to traders not cashing in on the government’s GST rebate programme.
Customs’ GST Division director T Subromaniam said that under the Special Sales Tax Refund scheme, traders could get a rebate on the Sales Tax (now abolished) they paid on stock they procured before April 1.
The refund was allocated to avoid double taxation on stock already inventoried, and to make way for the GST charge of 6%.
However, many traders seem to not want to apply for a rebate, probably leading to the rise in prices.
“Many traders did not want to claim the sales tax refund and that is probably the cause of the current price increase as the they did not remove the sales tax on their existing stock, but instead added on the GST.
“It could also be that they had misinterpreted the law. If they refuse to make the claim, I would say that it is a very unwise move,” Subromaniam said at a press conference today, as quoted by The Rakyat Post.
He said the main conditions to be eligible to make the claims were, the trader must be GST-registered, had stock in hand on April 1, 2015 and invoices on purchase were paid within 60 days from the date of GST implementation.
He said only for claims below RM10,000 an audit certificate from any qualified accountant was required, while claims above RM10,000 would require an audit certificate by an auditor approved under the Companies Act 1965.
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