Avoid using 'GST' term to avoid confusion - MoF

Deputy Finance Minister Datuk Ahmad Maslan said some businesses had been found to use the term, GST, or government service tax, which referred to the six per cent service tax.

He said the businesses must state in their receipts the amount of service tax that was charged, as there wasn't a fixed term that must be used by the businesses.

"Due to this, some businesses use terms such as service tax, government tax and government service tax which has been simplified to GST," he told a press conference here today.

He said even if the businesses had registered with the Royal Malaysian Customs Department, they were prohibited from charging the Goods and Services Tax (GST) before April 1, 2015.

"Even though the tax rate is the same for the GST and service tax, it is wrong to use the GST term before its implementation date," he said.

He said it was an offence if the businesses charged the GST before April 1, 2015, and if found guilty could face a fine of up to RM30,000 or maximum jail term of two years, or both.

Meanwhile, Ahmad said the confusion also surfaced regarding the service charge that is normally imposed at the rate of 10 per cent by businesses, which is considered by the public as tax imposed by the government.

"The service charge is charged by operators of hotels and restaurants on the services provided to customers," he said.

Hence, Ahmad said the MoF had made a proposal to the Ministry of Domestic Trade, Cooperatives and Consumerism so that the industry could use a suitable term for example, restaurant charge or hotel charge.