Customs Dept overpays GST refunds amounting to RM4.38 million - AG Report

Hence, the National Audit Department has asked the Customs Department to conduct an investigation into companies that had made the claims and Customs officer responsible for the tax refunds.

“The Customs Department has also been asked to collect the wrong payment made amounting to RM4.38 million from the taxpayers concerned soonest," said the Auditor-General's Report 2019 Series 1 released today.

According to the report, under Section 8, GST (Repeal) Act 2018, the taxpayers involved were required to submit the final statement and account for all procurement that has been made.

The final statement and GST payments must be submitted no later than 120 days, i.e. on Dec 31, 2018 (from the date set on 1 Sept 2018). In addition, Section 8 (1) states that any tax claims must be made in the final statement set for Dec 31, 2018.

"An audit review found that 75 of the 100,736 GST refund claims amounting to RM4.38 million had been paid even though the applications were received after the stipulated period. As of the date of the audit, the Customs Department has not taken any action on the overpaid GST refund claims," according to the report.

The report said the audit team found that the mistake occurred because the officer in charge did not check the date of receipt of the GST-03 Statements, instead carried out the repayment process based on the assignment files submitted.

The payment error causes leakage of revenue to the government if not collected.

However, based on the feedback received by the National Audit Department on May 29, 2020, the Customs Department has taken action to reclaim the wrong refund payments involving 75 transactions amounting to RM4.38 million.

As a result, 48 transactions have been issued claim bills amounting to RM3.98 million until May 28, 2020, while 27 transactions are in the reclaiming process.

From the feedback received on Aug 4, 2020, the Customs Department reported that 42 transactions of reclaim bills amounting to RM798,453.64 had been collected until Aug 3, 2020.