KUALA LUMPUR: Federal Government agencies have six months to sort out imposing Goods and Services Tax on prepaid cards for mobile phones.
The communications commission MCMC and the Royal Malaysian Customs will ensure that GST is imposed on the use of prepaid mobile services within that time.
MCMC chairman Halim Shafie said the two agencies would also ensure that all telecommunications companies comply with the government directive to enforce GST, as decided by the Cabinet recently.
A public outcry has ensued over the past month as retailers refused to sell prepaid reload cards amidst confusion on whether GST would be incorporated into the retail price or imposed on the full value of the reload.
Prepaid mobile users who had paid RM10 for a reload card had balked at paying RM10.60 for new reload cards after May 1 when 6% GST was imposed. They had previously received RM10 of mobile services on a RM10 card, as telephone companies had subsidised the sales and service tax imposed then.
Communications minister Ahmad Shabery Cheek announced that prepaid mobile users would receive RM10 in credit on a RM10 reload card, with GST charges imposed only on usage.
He said this would be more appropriate as the government would not impose tax before the service was used.
Halim there would be audits conducted to ensure the accuracy of the GST deduction based on the value of mobile credit used.
The communications commission would also consider Ahmad Shabery’s call to telephone companies to create affordable packages for specific target groups such as students.
The director-general of Customs, Khazali Ahmad, said monitoring of the GST conversion process would be intensified to ensure smooth implementation based on usage of prepaid top-ups.
In the meantime GST would continue to be imposed on the full retail value of prepaid reload cards until the ‘RM10 for RM10′ system was implemented.
