Customs: Yes, passenger car buyers will have to pay SST

  • Nation
  • Friday, 20 Jul 2018

PETALING JAYA: Passenger cars will be subject to the Sales and Service Tax, the Customs Depart­ment clarified.

This follows news reports yesterday claiming that cars would be exempted from the tax.

In a statement, Customs director-general Datuk Seri Subroma-niam Tholasy said some quarters had misinterpreted information in the department’s proposed list of items for exemption from the SST, which it had released earlier yesterday.

The 292-page list, which was uploaded onto the department’s website, among others, mentioned components of Completely Knocked Down (CKD) cars.

“The Royal Malaysian Customs Department would like to clarify that passenger cars are indeed proposed for a sales tax.

“What is exempted from a sales tax in the list only refers to CKD components.

“When the vehicle is fully assembled from the imported CKD components, the assembled vehicle is subject to a sales tax,” Subromaniam said.

Separately, Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said the list of proposed goods exempted from the sales tax included the CKD packs for the local assembly of motor vehicles in the country.

“This means that the CKD packs will be automatically exempted from tax.

“Under the previous tax system, some paperwork had to be done to obtain tax exemption for the CKD packs.

“So, now, the difference is there is no need for the paperwork any more.

“But the sales tax will still have to be paid for the finished cars from the factory,” Aishah said.

The MAA has revised downward its 2018 total industry volume (TIV) forecast by 5,000 units to 585,000 units as the reintroduction of the SST on Sept 1 is expected to place a damper on vehicle sales.

Aishah said car prices were expected to increase post-SST and impact the demand for vehicles.

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