GST: Car Insurance Up By 6%

Beginning from April 1, 2015, car insurance is set to go up by 6% as insurance providers fall under the taxable goods and services category under the Goods and Services Tax (GST).

Customs’ Deputy Director Tan Sim Kiat urged Malaysians not to fall for “marketing schemes” which have been sensationalising the GST as April 1 draws near.

He cited an example saying “if an individual had been paying RM500 in insurance premium, his or her new insurance premium post-GST will be RM530 (RM500 add 6% GST of RM30)”. He urged Malaysians to calculate the costs first before getting excited and rushing out to buy things.

However, GST Director Datuk Subromaniam Tholasy has clarified that road taxes amount that motorists pay on an annual basis remains.

The 6% GST applies only for motorists that were to renew their road taxes at the post office. Initially, motorists paid RM2.00 as commission. Now, with 6% GST charged on it, the new commission will amount to RM2.12.

Datuk Subromaniam also reminded that neighbourhood security services is subjected to 6% GST although condominium maintenance fees are exempted from GST. Security companies providing services to residential areas fall under GST. As such, their fees would go up by 6% as well.

If the guards are hired by the residents’ association, residents could avoid the 6% hike if the association does not have a turnover of more than RM500,000 a year – which is the threshold amount for GST registration.

If the association makes RM500,000 or more a year, then the association will have to register for GST and charge its residents accordingly for neighbourhood security services.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek announced that five special GST courts had been set up to handle cases against traders under the Price Control and Anti Profiteering Act.

He said consumers must monitor the prices of goods and services they consume or use, to avoid being cheated. If there are traders who charge GST on goods which are tax exempted, the public should come forward and report this to the relevant authorities.

[Source]

[sc:testallianz]