GST: Some items to be cheaper

KUALA LUMPUR: The prices of television sets, refrigerators, air conditioners, electric irons, hair dryers, diapers and soft drinks are expected to come down with the introduction of the Goods and Services Tax (GST).

These items have a 10% sales and services tax embedded in their prices, but with the GST replacing the SST in April, the lower 6% GST rate will make them cheaper.

However, the prices of computers, laptops, iPads, mobile phones, men’s watches and cosmetics, including lipstick and nail polish, are expected to go up. These were tax free in the past.

“These items will be subjected to the standard 6% GST rate,” said Customs Department director of GST Datuk Subromaniam Tholasy.

He said there would be no GST for essential food items such chicken, beef, mutton, fish, duck, fish, eggs, ikan bilis, rice, bread, fresh vegetables and fruits, coconut oil, peanut cooking oil, palm oil and infant formula as well as for petrol RON95, diesel, toll and public transport.

But non-essentials such as tomato sauce, chilli sauce, oyster sauce, cup noodles, luncheon meat, tempe, cheese, margarine, quail egg, corn oil, olive oil, biscuit, donut and croissant chocolate will be subjected to the standard 6% GST.

“From a tax administrator’s point of view, it is easier if everything got taxed because it would make things simpler to implement,” Subromaniam said.

“But the Government doesn’t wish to tax so much and it wants to make sure that the low income group will not be unnecessarily burdened.

“So, we have to strike a balance between revenue and providing a social safety net.”

Subromaniam said businesses that did not know which goods were subjected to the GST and which were not should not add on the 6% because a lot of goods already have a 10% SST embedded in the pricing.

“If they don’t understand, they can ask the Customs people or check our book.”

Subromaniam said the department had been carrying out two-day hand-holding programmes over the past six months to get businesses ready for the GST and have trained over 40,000 people so far.

On whether it would be “messy” when the GST comes into effect, Subromaniam said: “There will be issues. The Customs Department has been dealing with these since 1972 with the SST and we have the experience and expertise to handle them.”