Tribunal rules 28 Boulevard soho units GST exempt

Housing developer Best Boulevard Sdn Bhd which is constructing small offices-home office (soho) units in Kuala Lumpur has been exempted from imposing the 6% goods and services tax (GST) on its buyers.

A consent award was entered before GST appeal tribunal in Putrajaya today after the Customs Department agreed that the 1,279 units at the 28 Boulevard project were built for residential purposes.

But purchasers will have to pay the consumption tax if the units, also known as virtual office, were also used for business and commercial purposes.

Today's decision means that the buyers need not pay the GST ranging between RM18,000 and RM25,000.

The units are sold from RM298,000 and onwards.

Best Boulevard launched the soho units in Pandan Perdana in March, a month before GST came into force.  

Lawyer Datuk Pretam Singh, who appeared for the developer, said the company took up the matter before the tribunal because the units, although built on commercial land was solely for residential use.

“This is a historical case because this was the first matter involving soho units to be filed and decided,” he said.

Pritam said the decision was only confined to this project and could not be used as precedent for other cases.

Best Boulevard director Derick Lim said the ruling was hugely beneficial to purchasers as they need not pay GST.

“For future rental and sub-sale, the transactions of the soho units will also not be subject to GST,” he added.

Before GST, the developer wrote to the department to seek clarification but in May it was told to impose the tax.

Pritam said the developer decided to take the matter before the tribunal in June as it would have serious impact on purchasers.

The lawyer said after going through the documents, the department director-general had exempted the developer from collecting GST.

Lee Chee Thim, Abdul Ghafar Abdul Latif and Effendi Nazilah were members of the tribunal which conducted the proceedings behind closed door.

Mohd Azawan Hamdan and Kamaliah Kassim appeared for the department. – November 17, 2015.