GST only on fee-based financial services

FAQ on GST: Customs officer Norhayati Ab Rahim showing the guidebook.

PUTRAJAYA: Consumers need not fear they will be taxed heavily for financial transactions because GST will only be imposed on fee-based services, said Customs Department senior assistant director (finance and banking) Rozila Saad.

Financial services such as cash deposits or withdrawals, loans and bonds, late payment or finance charges, as well as interest earned from savings or fixed deposits were exempted from GST, she said.

However, processing fees which banks or registered financial institutions charged to perform these services would be taxed under GST.

Rozila dismissed claims circulating online that GST would be applied for money withdrawn from ATMs.

“If you withdraw RM3,000, GST will be imposed on the RM1 charged by banks for the MEPS service provided. We do not tax 6% GST from the amount you withdraw,” she told a media briefing yesterday.

As for overseas online purchases, Rozila said GST, instead of the exis­ting sales tax, would be imposed on the total value of the product after calculating its CIF (cost, insurance and freight) value and import duty.

She said consumers could see sa­vings in this area when GST kicked in as sales tax currently ranges from zero to 10% depending on the item.

For a list of GST treatment for more than 300 general bank pro­ducts and services, as well as a set of frequently asked questions, visit the Association of Banks in Malaysia’s website at www.abm.org.my.

More GST-related information, legislation, guidelines and services can also be found on the Customs Department’s GST website www.gst.customs.gov.my.