RM100 per day for penalty

GST: Customs to go after stubborn traders

Published on: Tuesday, January 27, 2015

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Kota Kinabalu: The Customs Department will continue to trace stubborn business owners who have yet to register for the Goods and Services Tax (GST).
Sabah Customs Director Datuk Janathan Kandok said he believed there are still many companies that have yet to register even though the closing date was on Dec 31 last year.
However, he added, so far, the department had yet to take any action against any companies that committed the offence.
"But I would like to remind them to register. Do not procrastinate any longer. You will be compounded RM100 a day for that failure. Today is Jan 26, so the total amount of compound that you will have to fork out is RM2,600 already," he said, adding that in Sabah, about 16,000 companies have registered for GST.
Janathan was speaking after the 33rd World Customs Day 2015 celebration held in Wisma Pertanian, here, Monday.
He said the department had done its best in educating the public about GST but admitted that there are still many who are in the dark about the new tax system.
The problem, he said, is the public's preference to turn to social media when looking for information due to ease of accessibility.
"Instead of referring to us, they referred to the social media. Many people are getting information on the Internet but not all of these are correct.
"If the public insisted on scouring the Internet for knowledge, there is a big possibility that they would be misled. I would urge the public, if you want accurate information, refer to the Customs Department.
"I believe the public will be supporting GST if only they fully understood it," he said.
In the meantime, he said, he is satisfied by the level of commitment and dedication shown by Customs staff in the State.
"Looking at the performance reports, I am happy to note that our staff in all stations have been impressive in carrying out their duties and responsibilities.
"I also would like to call upon other enforcement agencies to continue assisting the Customs in curbing illegal activities such as drug trafficking into the State.
"I think it is important for us to cooperate with each other, especially in terms of information sharing," he said.

Thankless strata home GST status change

Thankless strata home GST status change

Published on: Monday, January 26, 2015

Kota Kinabalu: When the Goods and Services Tax's (GST) six per cent regime was first announced in 2013 that it will be implemented from April 1, there was no firm knowledge as to whether the management or maintenance service charges payable for strata home or residential property are subjected to GST payment or not.
Even the booklet meant for consumer understanding and reference would only be released later this month.
A lot of smart alecks were already increasing the management fees while arguing on both sides of the amateurish approach to the implementation of the GST regime when even a lot of Customs officers were clueless waiting for directives whether oral or in writing.
In the beginning, they were only professional in given general, hazy, evasive, stonewalling answers. Even industries from the A-Z like travel, hotel to the insurance sectors resigned to their cluelessness and double-speak when asking for specific and authoritative answers.
Last year, some residential management committees registered for GST to be on the safe side of the law before the deadline on the understanding that all joint management boards and management committees of residential strata properties were placed under the standard rated supply list if their annual billing of maintenance and sinking funds exceeded RM500,000.
Being on the standard rated supply list means they are supposed to register as GST-paying entities if conditions are met.
Now, belatedly, the Finance Ministry has notified that all categories of residential strata property will be placed under the exempt supply list of the goods and services tax (GST).
This means their joint management boards (JMBs) and management committees (MCs) need not register as GST-paying entities, even if their collections exceed RM500,000.
The reply from the ministry was revealed only after petitions for zero rated status were sent to Prime Minister Datuk Seri Najib Razak, who is also the Finance Minister.
The ministry replied that it could not consider the appeal to be categorised as zero rated because JMBs and MCs of residential strata properties were regarded as entities engaged in conducting a form of business under the GST Act.
This means the appeal to classify maintenance fees and sinking funds paid by low- and medium-cost apartment residents as zero rated was rejected by the cash-strapped government.
The ministry stated that all categories of residential strata property would be placed under the exempt supply list from the low-cost to the super expensive penthouses of condominiums.
Previously, only low and medium-cost apartments were placed under the exempt supply list.
Being on the exempt supply list means that while JMBs and MCs did not have to register as GST-paying entities, residents cannot claim back the six per cent they pay as GST for the services of their contractors, technicians and repairmen for the upkeep of their flats.
For the government, there was actually no difference between the GST-exempt supply and GST standard-rated supply because in the end, the government would still get to collect the 6 per cent GST.
The only difference was whether this was though output tax or input tax.
There are still a lot of smart alecks looking forward to meet with the ministry for a mind change before April 1 for all strata units – whether residential or commercial – to be classified under the zero-rated supply list including the plight of the low- and medium-cost strata unit dwellers who largely comprise of the working and lower-income class already struggling with the rising cost of living.
Under the exempt supply list, although they do not have to register as a GST-paying entity, residents would not get a refund for the 6 per cent input tax they would have to pay their contractors, technicians and repairmen for the upkeep of their projects.This in effect, would mean that JMBs and MCs would have to increase maintenance charges in these developments by 6 per cent in order to pay suppliers in the form of input tax.
Only goods under the zero-rated supply list can claim from the Customs Department the GST incurred through payments to service providers.
Rising cost of living is already putting pressure on low- and medium-income families, and for them, there is no betterment in terms of what the government has offered, except getting the BR1M payment.
Residents of low- and medium-cost apartments formed the bulk of those living in the 25,000 stratified housing estates in Malaysia as they could not afford to stay in landed homes like some hawkers are going to increase their prices even if some politicians call for price drop because of the decrease in fuel prices.
Meanwhile, the Federation of Sabah Industries (FSI) calls for a deferment in the hike in water as well as electricity tariffs in view of what was described as going to be a bad year.

seek litigation when confronted

‘Govt will force companies to register for GST’

January 24, 2015

Deputy minister says penalties of RM2,000 to RM15,000 will be imposed.

KUALA LUMPUR: About 50,000 companies who missed the December 31 deadline to register for the Goods and Services Tax will face penalties of RM2,000 to RM15,000, the government said today.
Deputy Finance Minister Ahmad Maslan said the government would force companies to register, with a minimum RM2,000 penalty for compounding their missing the compulsory registration deadline. “If you do not want to register, we will register for you and a maximum of RM15,000 will be compounded. The company name and other information are available at the Inland Revenue Board,” he said.
Speaking on BernamaTV on Friday night, Ahmad said the overall response to the GST had been “amazing” – the government initially expected only 150,000 companies to register but the number had gone to more than 305,000 companies.
GST will be implemented from April 1 at the rate of six per cent, replacing the current Sales and Services Tax.
Ahmad also said the government was ready to make further revisions to the 2015 Budget, including deferring the implementation of high-impact mega projects, if global oil prices continue to plunge.
However the government’s projections were that oil prices are not likely to dip below US$40 per barrel. “The government and most economists expect oil prices to hover around US$40-US$70 per barrel, and we choose US$55 per barrel as the average oil price for the year,” he said.
All current mega projects such as the Pan Borneo Highway, the two mass transit lines in the Klang Valley, and the Kuala Lumpur-Singapore High Speed Rail will continue.
The Pan Borneo Highway would catalyse development in Sabah and Sarawak and should not be delayed again because it could change the economic landscape along the highways.
“Similarly, the MRT and high-speed train projects will be catalysts for economic growth. Creating a high-speed rail will involve hundreds of economic activities involving various industries including manufacturing and services,” he explained.
– Bernama