Customs DG: Other projects also enjoyed GST relief

PUTRAJAYA: Tax relief had been awarded to many projects in the past, including the SMART tunnel, Bukit Jalil Stadium, KL International Airport, Mass Rapid Transit and the Express Rail Link, said Customs Director-General Datuk Seri T. Subromaniam.

Commenting on the recent Goods and Services Tax (GST) relief granted to the East Coast Rail Link (ECRL) project, he said earlier projects had been given relief from the Sales and Service Tax (SST) and import duties.

“It was the Finance Ministry’s call (to grant tax relief) as these projects were classified as ‘Approved Service Projects’ where the sectors that could get relief were from the transportation, utilities and telecommunications sectors,” he said at the Customs headquarters yesterday.

Subromaniam added that several criteria needed to be met for the relief to be granted.

“Under GST, exemption for businesses within the supply chain will not cause the government to lose anything as it did not involve the enduser.

“This is unlike SST, when relief was given ... the government loses out on revenue from taxes.

“Why is this an issue when no one questioned past projects with similar exemptions?”

In the case of ECRL, Subromaniam said the government was the end-user as it owned the project through Malaysia Rail Link Sdn Bhd, and that the relief was granted under Section 56(3)(a) of the Goods and Services Tax Act 2014.

Subromaniam clarified that the 6% tax relief was not derived from the RM55 billion in ECRL’s cost but on other related acquisitions which cost far less.

His response came after Amanah vicepresident Husam Musa produced documents alleging that China-owned Communications Construction Company was given GST relief for the ECRL project.