Early booking doesn’t mean no SST


  • Nation
  • Thursday, 19 Jul 2018

Tempting offer: A used car showroom promoting zero GST and SST sale for a limited time only in Petaling Jaya, Selangor.

PETALING JAYA: Car buyers wanting to capitalise on the tax holiday, ahead of the introduction of the Sales and Service Tax, may have to pay the tax if their cars are delivered after Sept 1.

Car manufacturers are not able to meet the demand in time following a spike in bookings. The long waiting list for new cars will see the delivery of some cars taking place only after the SST has been introduced.

Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said customers who would benefit were those who could get their new cars registered within the tax holiday period.

“But if the vehicle is delivered and registered after Sept 1, then buyers will have to pay a higher amount for the car because of SST.

“In terms of producing vehicles, there is always a four-month lead time. You need the local vendors to develop it.

“We only knew about GST being zero-rated in May, and there’s no way you can increase or request for production to come in or get your vendors to do more.

“We can only sell what is in stock or is already in the pipeline. We cannot get more than that, because of this lead-time period,” she said at a media briefing yesterday.

Demand for cars soared following the zero-rating of the Goods and Services tax (GST) by the new Pakatan Harapan government. It began on June 1.

The tax holiday saw many automobile companies announce zero-rated GST prices that brought down the price of cars.

A bottleneck has also surged in loan applications with several banks unable to process the loans on time.

Representatives from Honda and Toyota, who were at the briefing, said the waiting list for vehicles ranged from two to three months.

“If you order your car now, you won’t get it next month. Beyond September, it will come with SST pricing,” said MAA manufacturing vice-president Roslan Abdullah, who is also Honda Malaysia president and chief operating officer.

UMW Toyota Motor president Ravindran K. concurred that the waiting list of its Toyota models, on average, ranged between two and three months.

Total vehicle sales increased 28% to 64,502 units last month compared with 50,273 a year earlier, bolstered also by Hari Raya-related campaigns and promotions.

The surge in sales would, however, not last. MAA expects the huge demand for new vehicles to come to a halt once the SST kicks in.

As such, the MAA has revised downwards its 2018 total vehicle sales to 585,000 units from 590,000 previously.

Aishah said car prices could rise post-SST, adding that it was still early to determine what the quantum would be.

“It will depend on model-to-model,” she said. “Also, we are still waiting for the technical details; that is whether it will be the same as what was imposed previously.”


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