Cover image via SAYS.com
No GST on mobile prepaid reloads, but be prepared to be taxed for every call and SMS
Image via The Malay Mail Online
5 May: Datuk Seri Ahmad Shabery Cheek will call CEOs from telcos himself to give people what they want
Image via Twitter: @shaberyc
On 1 May, PM Najib Razak called on Datuk Seri Ahmad Shabery Cheek to handle the matter personally on Twitter, stating that any future announcements in regards to the ongoing issue can only be made by the minister himself
The Prime Minister's tweet was made following conflicting announcements from the Customs Department and Malaysian Communications and Multimedia Commission (MCMC).
The Customs Department had declared that prepaid reload coupons will revert to pre-GST levels by 1 May while MCMC stated that they will still be sold with GST added on to the airtime credit price.
Image via Reuters
29 April: Starting from 1 May, prepaid reloads will go back to its pre-GST rates
Image via SoyaCincau
3 April: Mobile prepaid users have to pay GST for top-ups but they will get extra credit for free
Image via Astro Awani
Following the confusion and complaints over the implementation of GST on prepaid top-ups, the Customs Department confirmed that users will continue to pay more for reload top-ups, but will be offered extra prepaid value as well
However, this arrangement – currently in effect – is only a temporary solution for the next three months until a final and long-term decision can be made
Image via Amanz.my
2 April: The dreaded goods and services tax (GST) finally came into effect yesterday (1 April) and as expected, Day One was met with no small amount of confusion and frustration from some Malaysians
Image via Reaction GIFs
7-Eleven in particular received a flood of complaints on its Facebook page for imposing a 6% tax on newspapers, which were supposed to be zero-rated and exempt from GST
Image via 7-Eleven Malaysia's Facebook
Image via 7-Eleven Malaysia's Facebook
Image via 7-Eleven Malaysia's Facebook
Some of the posts were accompanied by photos of receipts as photographic evidence
Image via Tracia Shia on Facebook
Image via Brandon Chan on Facebook
Image via Jay Thoo on Facebook
For reference, items that are subject to GST are indicated as "SR" or "S" (standard-rated), while GST-free items are indicated as "ZR" or "Z" (zero-rated) on the receipt
Image via Friends of BN's Facebook
Amidst the uproar, the 24-hour convenience store later released an apology statement on its official Facebook page, stating that the pricing error was due to a technical glitch in their point-of-sale system (POS) and that affected items have been withdrawn from sale
Image via 7-Eleven Malaysia's Facebook
7-Eleven was not the only retail chain to have committed the error. GST was also charged on newspapers bought from KK Super Mart, another chain of convenience stores in Klang Valley.
Image via KK Super Mart's Facebook
Image via KK Super Mart's Facebook
Image via KK Super Mart's Facebook
KK Super Mart responded a lot faster than 7-Eleven did, asking its customers to claim refunds from the outlets they'd purchased incorrectly taxed items from in a Facebook statement posted by 12.00PM
Image via KK Super Mart's Facebook
On another hand, the attention on 7-Eleven and GST being imposed on newspapers has also brought another issue to light – whether or not GST is implemented for mobile prepaid reloads.
Consumers who have topped up their mobile credits in 7-Eleven pointed out discrepancies in GST implementation from different telcos. For example, Maxis and Celcom below:
Image via Safuraa Josni
Note that mobile prepaid reload for Maxis was subject to a 6% charge, whereas Celcom's was not.
So, what's the real deal here?
Image via Reaction GIFs
An official statement from Customs Chief Director Dato' Subromaniam A/L Tholasy reveals that telcos should NOT be charging an additional 6% on reload coupons, as GST will be replacing the old sales and service tax (SST)
The Communications and Multimedia Consumer Forum of Malaysia (CFM) also stated that postpaid and prepaid telco services will remain unchanged due to GST replacing the old sales and service tax (SST). Hence, there shouldn't be an increase in price for prepaid top-ups.
However, according to the FAQ on Maxis' official website, prepaid top-ups have never included the 6% SST, hence the price increase upon the implementation of GST.
Image via Maxis
A DiGi spokesperson also said that SST was not included in prepaid products prior to GST. A look into DiGi's FAQ in its official website shows that the recommended retail price for prepaid starter packs have also increased due to GST.
Image via DiGi
By right, based on statements from the Customs Department and CFM, DiGi should not be increasing the prices of prepaid reload coupons.
Yet, according to the Customs Department, telcos have been instructed to not increase their prices after GST. Those found to have gone against those instructions will be investigated.
Meanwhile, 7-Eleven has apparently stopped charging 6% GST on top-ups today (2 April)
Image via Sonnia Eleo
