Many retailers, agents and services operators are still trying to grasp and familiarise themselves with the zero-rating of the Goods and Services Tax (GST).
Some are reluctant to adjust their pricing model accordingly, as the tax break will only be for three months before the return of the Sales and Services Tax (SST). While many retail businesses are enjoying the tax break, some claim that they do not have a clear directive on their next course of action.
When contacted by Bernama, several insurance agents said they were still unclear on whether they should stick to the current contribution rate or reduce the amount in line with the zero-rated GST.
“We are still waiting for a clear directive,” said an insurance agent when asked on why the amount charged for June was the same as the previous months.
Earlier on, General Insurance Association of Malaysia, Life Insurance Association of Malaysia and Malaysian Takaful Association announced that life and general insurance companies and takaful operators would be charging zero per cent GST effective June 1.
“Members of the public are advised to contact their insurers or takaful operators for clarification on the GST for any insurance or takaful products purchased or services rendered,” they said.
Meanwhile, a survey by Bernama showed that food prices remained the same, with many restaurants and hotels offering Ramadan buffets displaying the same prices prior to the zero-rated GST.
Restaurant operators contend that raw material prices were still high, and hotels said the prices they displayed was not inclusive of the GST in the first place.
The scenario was different among retailers of non-food items, however, as many retailers, from jewellery to furniture stores, took advantage of the zero-rated GST to conduct sales promotions, offering up to 80 per cent discounts and publicising it on social media platforms.
A sales promoter at the Quan Furniture and Electronics store in Subang Jaya said that many Malaysians have taken the opportunity to shop due to the cheaper prices.
“For example, the price for a full set queen-size bed has dropped from RM1,999 to RM1,099, while the price for electrical appliances have also dropped by RM10 to RM100, depending on the item,” he said.
A customer, Siti Nor Aini Hamidon, 32, said that her family had allocated RM5,000 for their Raya expenses this year.
“Things are relatively cheaper this year. Combined with promotions online and offline, people are surely getting their money’s worth,” she said. – Bernama