Identify transactions subject to GST before June 1, retailers told

PETALING JAYA: Retailers need to identify which transactions are subject to the Goods and Services Tax, in lieu of the tax being set at zero per cent beginning June 1.

Malaysian Retail Chains Association president Datuk Garry Chua said this was part of the GST updates sent to its members after the announcement was made by the Government that goods and services subjected to GST would be zerorated from next month.

“Retailers must identify which transactions are subject to 6% GST, especially in situations where the goods are delivered or the payments are received before the effective date of June 1, but the invoices are only issued after that date.

“This is to avoid tax evasion during the transactions,” he said.

GST zerorated supply means the goods and services are not taxed, hence the taxable company does not need to collect any GST on sales.

Chua also urged consumers to look at their purchase receipts from the date of effect to identify any discrepancies.

“The retailers, meanwhile, must ensure that all prices subject to GST before this are now reduced to reflect no increase in price due to the change in GST rate.

“They must also update their point of sales and accounting systems to ensure that all transactions and returns are reported and submitted correctly,” he added.

Chua noted that since the GST Act had not been abolished yet, businesses must still take into account Section 66s and 67 of the Act.

Section 66 provides that GST will be charged on either the payment received before the effective date or the value of goods/services supplied before the effective date, whichever is higher.

“As such, all payments made and billed for in advance, even for goods and services delivered after June 1, is considered GST applicable,” he said.

Chua also noted that for transactions entered into but not yet executed by May 31, Section 67 of the GST Act allows the supplier to deduct the GST that was originally meant to be paid for.