No GST on ATM cash withdrawal

KUALA LUMPUR: The Goods and Services Tax (GST) web will extend to online banking and over-the-counter transactions as well as MEPS transactions.

But GST will not be charged on the amount withdrawn from an ATM or for a bill paid through the post office, as had been claimed on the social media, reported The Malay Mail Online.

“The six per cent GST charge will not be for the transaction amount but for the bank charges,” clarified Customs Director-General Khazali Ahmad.

“If there is a bank charge or fee, then GST will be imposed on those charges.”

GST would be payable in respect of a basic charge or fixed fee in connection with commercial banking products and services, said Chua Mei Lin, the Executive Director of the Association of Banks Malaysia.

“Interest or spreads charged by commercial banks are not subjected to GST,” said Chua.

“Member banks will publish the list of fees and charges and GST details, and whether GST is payable or not for those charges.”

GST charges will affect at least 17.6 million online banking users, both corporate and individual users.

The uncertainty over banking and post office charges arose after a picture of an ATM receipt from a commercial bank went viral on social media. It was claimed that GST charges would be imposed automatically.

“The GST is only the service fee and not the bill amount,” said a statement by Bank Negara.

“For example, if the bill is RM100 and the service fee is RM1, the customer has to pay RM101.06 after GST.”

However, in most cases, the service fee is absorbed by the billing agencies.

“Hence, the billing agencies will also absorb the GST payment and the customer need not pay anything beyond the bill amount.”