GST will BURDEN Consumers?
#GST13
Are you one of them, who still think that GST will actually burden you once it is implemented? Is it really burden or not?
In this blog, I will try to provide you some information and you may have a second view about it.
Personally I think GST will ease consumers instead if you were to look at it in bigger perspective. For example, all our basic needs like rice, meats etc are either treated as Exempt Supply or Zero Rated supply. I will do a further research on this and will include an extensive list of all the exempt, 0% rated, Standard Rated supply items for your reference in my coming blog.
I got a more details answer from RMC website to answer to the above question. Please visit to their website for more Q&A.
The public should not have any fear over GST. Firstly it is a form of consumption tax which has been implemented by more than 160 countries in the world whether they are of a developed, developing or less developed status. Secondly, where Malaysia is concerned, GST replaces the existing consumption tax which comprises of sales tax and service which are found to be less effective, efficient, transparent and business friendly. Being a consumption tax, it is only incurred by the man on the street only when the goods or services are consumed. If no consumption takes place, he does not have to pay GST.
The public may not be aware that currently sales tax at the rate of 10% or 5% is already embedded in the prices which they pay for most goods, for example electrical goods, clothes, shoes and household appliances as the sales tax is imposed at the manufacturers level or at the point of import. By the time the goods reach the consumers the sales tax paid at the manufacturers level would be cascaded into the sales price at each level of the distribution/supply chain. GST, unlike sales tax or service tax, is a multi-tier consumption tax which will be applied at every stage of the distribution/ supply chain. At every stage of the distribution/supply chain businesses are able to claim back as credit the GST paid on the goods and services which they have acquired for the purpose of their business thus eliminating the cascading effect suffered under the current consumption taxes. As such, for goods which are now subject to sales tax there should be a reduction in prices due to the elimination of the cascading effect. Consumers should also be better off as some basic essential goods eg rice, vegetables, cooking oil and fish are not subject to GST at all. However, there may be an increase in price of certain goods and services which are currently not subject to any sales tax or service tax. The increase should not be more than the GST rate proposed due to the fact that businesses can claim back the GST paid on their acquisitions.
Hope it will help in your implementation and a have a smooth transition on 1 April 2015.
CUKAI BARANG DAN PERKHIDMATAN (lebih dikenali sebagai GST)
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