Businesses must know how to file Goods and Services Tax returns or risk costly mistakes


  • Business
  • Friday, 26 Sep 2014

PUTRAJAYA: Businesses who procrastinate in registering with the Customs Department to comply with the Goods and Services Tax (GST) regulations will only lose out as they are bound to make mistakes when the new consumption tax system comes into force. Noting that businesses were the frontliners of the system, department director-general Datuk Seri Khazali Ahmad said mistakes could cost them dearly when the GST goes live on April 1, 2015.

With this in mind, he said that Customs would unroll its first phase of the GST hand-holding programmes from October to December for businesses that register by Sept 30.

(Hand-holding programmes are programmes to support or guide during a learning process or a period of change.)

The free programmes are designed to help businesses smoothen their transition to the GST from the existing sales and service tax (SST).

“Ultimately, the businesses are the ones who must know how to file their returns. They must be very clear about how the GST works and how it affects them,” he told StarBiz.

Khazali said the department was promoting voluntary compliance on the part of businesses, as it was a preventive early measure against avoidable mistakes.

He said his officers would assist or “hand-hold” businesses through the GST adoption process so they would not face audit woes in future.

“We don’t want to do fire-fighting. Instead, we want to focus on preventing fires,” he said.

However, he said the department would not hesitate to carry out enforced compliance by automatically registering businesses that missed the Dec 31 deadline.

He said these businesses would face punitive action, including penalties, and also lose out because they would be caught up in the last minute rush to adapt their businesses to the GST.

“To avoid this, we are going all out to help them through our hand-holding programmes.

“It will reduce the chances of mistakes and ensure the Government collects the right amount of revenue,” he said.

Khazali said as of Wednesday, 53,458 out of a targeted 300,000 businesses have signed up with the department, with the registration deadline for these companies being Dec 31.

In recent weeks, the number of companies registering has increased to almost 3,000 daily from about 100 last month.

“If this trend keeps up, we expect to achieve a sizeable number of companies registered by December,” he said.

He warned against the “wait until the last minute” mentality, stressing that it would be chaotic if a flood of businesses rushed to register in December.

He said this was because Customs had limited resources and might not be able to cope with the sheer amount of businesses to train.

Khazali said it was also crucial that companies understood how to do business during the transitional period between the SST and GST.

Giving an example, he said that a retailer with existing stock-in-hand already paid for under the SST would be eligible for a special refund once the GST came into effect.

“This is provided for under the GST Act 2014. Without attending our programmes, many businesses might not even know we have these provisions in the law for them,” he said.

The first phase of the GST hand-holding programme is from October to December, the second from January to March and the third from mid-March to December.

Khazali said the focus of the third phase of the programme would be different, as it would address any new issues that emerged post-GST implementation.

For the first phase, he said training would be given on four major sectors - retail, manufacturing, property and construction, and automotive.

Retail and its various sub-sectors comprise around half of the businesses registered for the GST.

Conducted in each state, he said each session would be limited to 100 companies, with around 200 programmes expected to be held in Kuala Lumpur and Selangor, as well as 100 programmes in Johor, Penang and Perak.

The retail, manufacturing and automotive sectors involve a two-day session while property and construction involves a three-day session.

“The programmes include in-depth training on GST requirements, online training for filing GST returns, discussion about price impact/changes and facilities available under GST,” he said.

Addressing fears of profiteering once the GST goes live, Khazali stressed again that consumers must play their role in knowing their rights.

He reminded them that the database of GST-registered businesses was available online to the public to check if a company was eligible to charge them the 6% tax.

He said consumers could check the company’s GST status by typing in the GST number printed on the receipt or by typing in the company’s registered name.

“Please exercise your rights as consumers. Be our eyes and ears as well,” he said.

As for the authorities, Khazali said that the sophisticated Customs database would alert officers if businesses did not keep to the same profit margins post-GST.

He said that should his officers find proof of profiteering in the audit process, they would liaise with the Domestic Trade, Cooperatives and Consumerism Ministry which oversees the Price Control and Anti Profiteering Act.

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