Prepaid reloads back to pre-GST rates from May 1

PUTRAJAYA: Telecommunication companies will revert to the old pricing for prepaid reloads from May 1.

Customs director-general Datuk Seri Khazali Ahmad said the telcos had been informed to revert to the rates before the implementation of the Goods and Services Tax (GST) on April 1.

This means that a RM10 top-up would cost RM10 instead of GST-inclusive RM10.60.

"We understand the problems affecting youngsters, who are the main prepaid users.

"Effective May 1, all telcos must revert to prices before April 1 where the price is inclusive of tax," he told a press conference.

Initially, the government announced that prices of reload cards would be maintained after the GST, as the tax replaces the Sales and Services Tax (SST) which is also rated at 6%.

Previously, the SST is absorbed into the price of reload cards.

After the GST kicked off on April 1, telcos went on to charge the 6% GST on top of the reload card price instead of absorbing it.

After a meeting between government officials and telco groups, it was decided that telcos would be allowed to impose the GST on top of the reload card price on a temporary basis until a new solution is found, but customers will also get additional talk time.