KUALA LUMPUR, May 10 — Penang Chief Minister Lim Guan Eng demanded an apology today from Barisan Nasional’s (BN) state chapter for claiming that his administration does not need to pay the Goods and Services Tax (GST) charged on government services.

In a statement, Lim noted that Penang BN chairman Teng Chang Yeow had accused him of making “false claims” that the state government has to pay up to RM47.9 million to implement the consumption tax, during the campaign for the just-concluded Permatang Pauh poll.

“Teng claimed that the state government need not pay such a high GST. Teng and BN is clearly lying when the Johor Sultan expressed his displeasure that the public or the state government has to pay GST for government services and works provided to the public,” Lim said.

He was referring to Johor ruler Sultan Ibrahim Sultan Iskandar’s remark this week that the state should not collect GST for “government services” as it should be considered the state’s responsibility to the public.

Lim added that his government has written to Prime Minister Datuk Seri Najib Razak seeking exemptions for his government from the GST as they are not a business organisation making profit.

Najib, he added, has yet to respond.

“It is ridiculous that state government building roads, drains, halls or works for public benefit has to pay 6 per cent of GST. Instead, Teng claimed that this is not the case and accused me of misrepresenting the situation,” he said.

With that, the Bagan MP demanded that Teng and Penang BN “publicly apologise for lying”.

Lim announced on May 1 that the state, together with state agencies and the local councils, have to pay a total RM46.25 million in GST and an additional RM1.65 million for implementing the consumption tax, bringing the total to RM47.9 million.

A day after, Teng accused Lim for “intentionally confusing” the people that the state government needed to pay GST on official spending.

He explained that emoluments, pensions and salaries listed among Penang’s expenditure of RM100.25 million were not taxable under the GST and that the state could also claim back GST on inputs for their development expenditures once they are completed.

“So they are actually not paying any GST but they are intentionally misleading the people into thinking that even the state government has to pay GST,” Teng said.