Today, with the implementation of Goods and Services Tax, marks a new era in Malaysian tax landscape. Consumers have to pay an additional 6% tax on goods and services consumed in Malaysia, except for certain goods and services which are considered a necessity in our daily lives such as rice, vegetables, fruits, medical, public transport, residential house etc.
Will there an increase in price of goods?
It depends on which category of goods. Sales tax, rate ranges from 5% to 10%, on certain goods or raw material used for manufacturing purchased locally or imported was scrapped from 12 midnight on 31 March 2015. Traders or manufacturers are allowed to claim a special refund of sales tax on unconsumed goods that they purchased before 1 April 2015. Sales and services tax will be replaced by GST from today at the rate of 6%. At the time of writing, car manufacturers and dealers announced their price reduction.
There will be no cascading effect in GST, in other words, there will be no increase in manufacturing cost or cost of sales of traders. GST registered person are allowed to claim input tax credit the manufacturer or trader paid or to be paid. Therefore, this eliminates the "additional GST cost" on all intermediary manufacturer or traders except the cost of implementation, information technology administration, compliance and GST risk management.
However, there maybe a handful of traders who are adamant and insist to increase prices to cover their cost of doing business. The Ministry of Finance has committed to fully enforce the provisions of the Price Control and Anti-Profiteering Act 2011. The Act empowers the Ministry of Domestic Trade, Cooperatives and Consumerism to monitor, control and take action on any price increase due to excessive profiteering. Price Control and Anti-Profiteering (Mechanism to Determine Unreasonably High Profit) (Net Profit Margin) Regulations 2014 was gazetted late last year.
Your comments are appreciated.
Will there an increase in price of goods?
It depends on which category of goods. Sales tax, rate ranges from 5% to 10%, on certain goods or raw material used for manufacturing purchased locally or imported was scrapped from 12 midnight on 31 March 2015. Traders or manufacturers are allowed to claim a special refund of sales tax on unconsumed goods that they purchased before 1 April 2015. Sales and services tax will be replaced by GST from today at the rate of 6%. At the time of writing, car manufacturers and dealers announced their price reduction.
There will be no cascading effect in GST, in other words, there will be no increase in manufacturing cost or cost of sales of traders. GST registered person are allowed to claim input tax credit the manufacturer or trader paid or to be paid. Therefore, this eliminates the "additional GST cost" on all intermediary manufacturer or traders except the cost of implementation, information technology administration, compliance and GST risk management.
However, there maybe a handful of traders who are adamant and insist to increase prices to cover their cost of doing business. The Ministry of Finance has committed to fully enforce the provisions of the Price Control and Anti-Profiteering Act 2011. The Act empowers the Ministry of Domestic Trade, Cooperatives and Consumerism to monitor, control and take action on any price increase due to excessive profiteering. Price Control and Anti-Profiteering (Mechanism to Determine Unreasonably High Profit) (Net Profit Margin) Regulations 2014 was gazetted late last year.
Your comments are appreciated.
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