High operating cost possible for non-registered GST persons, says PIAM

All general insurance policies will be subject to the soon-to-be implemented Goods and Services Tax (GST) and there may be an increase in the cost of insurance for a non-registered GST person, says Persatuan Insurans Am Malaysia (PIAM).

"However, if you are a GST registered person, you will be able to claim Input Tax Credit on the GST paid by you on your policy from the Royal Malaysian Customs Department (RMCD)," it said in a statement today.

It also said if a policy was incepted on or after April 1, 2015, even if the renewal was done earlier, the policyholder would have the full GST of 12 months on the annual premium.

"Your insurance company may collect this amount from you on or after April 1, 2015," said PIAM.

It said for the imposition of GST on a general insurance policy, the insurance company would issue a tax invoice for the amount of premium to be charged and the appropriate GST on this premium, and then the GST registration number of the insurance company would appear on the tax invoice, it said.

"It is the responsibility of the insurance company to collect the applicable GST and remit this to the RMCD within the stipulated time frame set by the government.

"Therefore, consumers are required to pay the GST promptly," said PIAM.

PIAM is the national trade association of all licensed direct and reinsurance companies for general insurance in Malaysia which currently has 29 member companies.

For more information on PIAM, can be obtained from www.piam.org.my.