KUALA LUMPUR, Dec 5 — The Customs Department has clarified that the Goods and Services Tax (GST) refund shortfall of RM80 million as highlighted by the Auditor-General's Report Series II is connected to the missing funds in the Trust Account as mentioned by Finance Minister Lim Guan Eng, and not a procedural fault.
It said that under Section 54(2) of the GST Act 2014, all revenues must be placed in the trust account where either all or a portion of the money can be then moved to the Consolidated Account with the Finance Ministry's approval.
“However all GST revenue was placed in the Consolidated Account without the ministry's approval. Only a certain percentage was insufficient and thus moved into the GST Trust Account,” the department said in a statement.
By May 31, the Trust Account still required a transfer of RM19.2 billion in revenue to continue paying the GST refunds which have been or would be approved.
“It was reported that the Consolidated Account only had RM450 million on Apr 30, an amount insufficient to be transferred to the Trust Account for the GST refunds. As a result the government must depend on the special Petronas dividend to make the GST refunds of RM19.47 billion,” it said.
On Monday, following the release of the report it was reported that the total amount of arrears for GST refunds stood at RM19.55 billion instead of RM19.47 billion.
In August, Lim pledged Putrajaya's commitment to returning GST refunds by next year, which is said to have been improperly or even illegally withheld by the former BN administration.
Similarly, national oil and gas conglomerate Petronas Bhd will pay a one-off RM30 billion special dividend next year to help settle the RM37 billion outstanding tax refunds which included income tax and GST refunds.