GEORGE TOWN, Aug 24 — The Royal Malaysian Customs Department has overpaid the Goods and Services Tax (GST) refund to taxpayers by RM4.38 million, according to the 2019 Auditor-General’s Report (Series One) released today.
The report found that the refund was paid out to 75 out of 100,736 applications received despite the applications being made after the December 31, 2018 deadline.
The report said that all GST refund applications submitted after December 31 of 2018 were not valid.
It recommends that the department investigate the reasons behind the overpayment of the refunds.
“If the error in refunds was due to carelessness of the officer for failing to check the validity of the claims, then action must be taken against the officer,” it said.
The Customs Department explained that it had started reclaiming the overpayment from taxpayers and a total 48 notices to reclaim the refunds totalling RM3.98 million were issued as at May 28 this year.
The department is now in the process of issuing 27 other notices of claim.
“We have collected a total RM798,453.64 from the 42 notices issued as at August 3,” it said.
The department was also pinpointed for failing to collect import duty totaling RM50.46 million.
In the report, it was found that the department had given an invalid duty exemption for the import of alcohol by a company and failed to collect import duty amounting to RM50.46 million.
It noted that import duty exemption was approved for the company for the import of Undenatured Ethyl, 99.5 per cent Purity Level for the period between December 23 of 2014 up to December 22 of 2020.
However, it found 10 transactions of importation of alcohol by the company, between 2017 and up to July 2019, that were used as raw materials to manufacture rebaudioside A and NSF01 but the import duty for the raw materials totalling RM50.46 million was not collected.
It found that the officer in charge had failed to check the purity level declared in the customs form by the company with the purity level of the alcohol that was given duty exemption.
The report stated that as of January 31 this year, the Duty Exemption Committee has amended the description of raw materials without stating the purity level for the period of January 9 to December 22 this year so the amendment does not apply on imports in 2019 and the years before that.
In its recommendations, the Customs Department was asked to conduct scheduled full audits on companies that had obtained import duty exemptions to ensure there were no losses in revenue.
It also advised the department to immediately collect the import duty totalling RM50.46 million.
The Customs Department explained that it had issued a bill of claims totalling RM50.46 million from the company on August 4 this year.
