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What has changed?
Following the recent GE14 in Malaysia, and in line with the new governments wish to abolish GST as soon as possible, the Ministry of Finance (MOF) has clarified that the GST rate will initially be revised to 0% from June 1st 2018, but what is the difference?
Simply put, the current GST implementation remains status quo and has not yet been abolished. The only change, for now, is that items that are standard-rated with the SR tax code and are currently set at the GST rate of 6% will be reduced to 0% effective 1st June 2018 nationwide. You can consider this a transition period before the full abolishment of GST which will be announced at a later date.
The implementation of GST back in April 2015 was a long and complex process, and it involved a lot of changes across various industry verticals. Thus, rolling back the GST implementation is not so straight-forward. This is the reason for the decision to initially set the GST rate for the SR tax code as 0%, and not to abolish the whole implementation in a haste, in order to give everyone sufficient time to re-configure their systems and processes for this change. During this transition period till GST is fully abolished, it will be common to still receive bills & receipts (labeled as Tax Invoices) from merchants, however, the amount of GST collected should always be RM0, and this will also be reflected in the GST summary of the tax invoice.
How will the Government collect revenue from future sales?
In place of GST, the Sales & Service Tax (SST) will be reintroduced. SST was widely practiced before GST was introduced, and the government is in the midst of preparing a proposal to be tabled in parliament before it can be passed to be re-implemented. It is widely believed that SST is targeted to be implemented in September 2018. We will be sure to share more info on this once we have it, along with the key differences between GST & SST!
KryptoPOS will implement the necessary system changes to comply with the upcoming SST as soon as official guidelines are released by the authorities.
What about the pricing?
It’s important to take into account the pricing adjustment implications for 0% SR tax codes. Since your customer will not be paying anymore GST, you will have to revert your display selling prices back to GST exclusive. For example, for an item that you are currently selling at RM5.30 (inclusive of GST), that price after 1st June 2018 should be adjusted to RM5.00 (minus the 6% GST). With regards to your POS, it is important to check with your POS vendor on the required process to comply with this new regulation.
All businesses that are using KryptoPOS and have GST enabled will have all their GST inclusive prices of their products that are SR rated automatically adjusted to match the GST rate which is 0%. This means that business owners using KryptoPOS will enjoy a seamless transition on 1st June 2018 and will not have to worry about making any adjustments on their POS system. All that is required is for them is to perform a sync at the end of their operations on 31st May 2018.
Some merchants may have previously absorbed GST on behalf of this customers. In this case, or if any KryptoPOS merchant has other special requests regarding this GST pricing change, you can email us at firstname.lastname@example.org or Whatsapp us at +60123770486 and we will gladly assist!