GST on top of mobile prepaid reload value to stay for now, says MCMC

Prepaid mobile phone reloads will continue to be charged the 6% goods and services tax (GST) on the reload amount as the Customs Department has yet to make a final decision as to whether prices should be rounded up to include the consumption tax with a lower reload value.

While a survey is being conducted to confirm industry and consumer preferences, a RM10 reload will cost RM10.60 to include GST, said the Malaysian Communications and Multimedia Commission (MCMC).

Its chairman Datuk Seri Dr Halim Shafie today said that following confusion since GST implementation on April 1 as to whether the price of prepaid reloads would go back to pre-GST rates from May 1.

He added that it would be impossible for service providers to implement the required changes over the next couple of days and that since the survey results were not ready, it was premature to make a decision now.

Dr Halim said that the survey was being carried out by communications providers to assess if customers preferred lower reload values on which GST is charged.

Under this option, paying RM10 for a reload would only give RM9.43 worth of talk time or short-message service (SMS) value, with 57 sen as GST.

The survey results would be presented to the relevant authorities next week, Dr Halim said.

He added that the difficulty in reverting back to the pre-GST arrangements were tied to complexities in reconfiguring systems for service providers and third party agents including financial institutions, electronic payment providers, supermarkets, petrol stations and all other sales agents.

Dr Halim also said that the cost of doing this would be significant to service providers and third party agents and as such, the cost factor would be carefully considered before coming to a final decision.

“As all the relevant parties had previously agreed to wait until the survey is completed, MCMC urges that any further decision on this matter be made only after considering the survey results as well as technical and financial implications.”

In the meantime, prepaid reloads will continue to be sold with GST added to the reload amount, he said. – April 29, 2015.