PUTRAJAYA, April 3 — The Malaysian Communications and Multimedia Commission (MCMC) and communications providers Celcom, DiGi, Maxis and U Mobile today clarified issues surrounding GST for prepaid services.
“I have been briefed by the telcos on this matter. From the beginning, communications services have not been included in the list of items that are exempted or zero-rated from GST, which means that consumers will have to pay GST for these services. This includes prepaid reloads,” said Dato’ Sri Dr Halim Shafie, Chairman of the Malaysian Communications and Multimedia Commission.
Dr Halim reaffirmed that prepaid reloads are subject to GST and that this is in compliance with the GST Act 2014.
According to Dr Halim, the value of the reload is identical to the value prior to GST implementation; the only difference is GST is added to the reload amount.
According to the four providers, the Royal Customs and Excise Department is agreeable to this treatment of GST on prepaid reloads as discussed in a meeting held yesterday between the Customs Department and representatives of the four communications providers.
However, to ease the burden of consumers, as a transitional measure, their customers who reload RM5.00 and above will be given an additional value which is higher than the 6 per cent GST in the form of free minutes and text messages. This will apply for three months beginning April 3, 2015.
A survey will also be conducted by the communications providers to assess if customers prefer lower reload values on which GST will be charged. For example, a RM10.00 reload could be RM10.60 (RM10 reload plus 6 per cent GST added) or RM10.00 (RM9.43 reload plus 6 per cent GST added).
Meanwhile, the industry is working with the Ministry of Communications and Multimedia and the MCMC to develop more affordable broadband packages for the rakyat. This is expected to be announced in mid-April.