Spot-check: Officers are going down to the ground to make sure that prices are in tandem with the GST Act and Anti Profiteering Act.
Consumers who feel they have been overcharged by traders can lodge complaints with the Anti-Profiteering Unit.
BY now, most people in the country would have started paying the Goods and Services Tax (GST) which took off on April 1.
While the new tax seems to have swung into action better than the authorities expected, with a few hiccups here and there which are still being sorted out, there have been heaps of complaints on social media about how traders are taking advantage of consumers by raising their prices even before factoring in the GST.
Consumers are thus feeling sore, complaining of being taxed twice because they end up paying more.
And they are asking whatever has happened to all the goods that are supposed to be lower in prices after GST?
Guna Selan Marian, head of the Anti-Profiteering Unit, Enforcement division at the Domestic Trade, Cooperatives and Consumerism Ministry, urges the public to give a bit of time for businesses to readjust.
He says so far, only three companies have submitted their claims to the Customs Department for the Special Sales Tax Refund.
“This means the reduction that is supposed to happen because of the tax refund is not happening (yet),” he explains.
The Special Sales Tax Refund is a one-off refund for stocks-in-hand goods purchased before April 1 which have the previous 10% Sales and Services Tax (SST) embedded in them.
(Because the SST has now been replaced by the GST which has a lower tax rate of 6%, the Customs Department will refund the difference in tax for stocks held on April 1. Companies and traders will then be able to pass on the savings to customers in the form of lower prices.)
Guna points out that companies have up to six months to make the Special Sales Tax Refund claim and most have yet to do so.
“This means these traders are just adding (the 6% GST) to the price (right now) and people looking at it do not see the price going down,” he says.
His colleague Low Swee Hon, the principal assistant director of the Anti-Profiteering Unit explains that businesses have to do their documentation and “stock take” as of March 31 to determine how much stock they have in hand and the sales tax that they have already paid on these goods.
“We won’t actually see the immediate effect of the price reduction by way of the Sales Tax Refund being claimed. They need a bit of time to put in their submission,” she says.
She adds that they are discussing with the Customs Department on ways to reduce the red tape so that traders can quickly put in their claims for the refund and customers can enjoy the lower prices faster.
“On our end, once the refund is made, we can follow up and check on the prices,” she says.
In any case, Low points out that the goods with the previous SST are going to “wear off” the racks in about two or three months time. Businesses are also preparing to claim back their input tax for their goods.
Both Low and Guna say that a number of big companies have already made announcements on price reductions.
But because it is only three weeks since the GST has been implemented, the first claim for the input tax will only be made next month.
“People are checking how to put in their claims. We are encouraging them to do it fast. But it needs a bit of time to settle down,” she says.
Guna says as of April 23, they have received a total of 5,116 complaints from consumers.
This number, he says, is far below what they were expecting.
He points out that when Australia kicked off their GST about 15 years ago, they had over 60,000 complaints which came in mostly during the initial period. As Malaysia is benchmarking itself against the Australian experience, it was prepared for a lot more complaints.
“The complaints are however fewer than expected. While the sentiment out there is prices have all gone up, it doesn’t reflect in the number of complaints that is coming to us.
“Consumers can’t just be making noise and don’t come to us. Give us the details of the complaints. Be specific in your complaints and we can go down and investigate in a systematic manner,” he urges.
The unit’s investigation, Guna says, is not based on complaints alone but also done proactively.
As of April 23, he says officers have carried out 152,129 inspections
“We go down and look at how traders are pricing the goods and if there is compliance. And we look at the complaints as well,” he says.
So far, they have issued 689 notices to traders to justify their price increases and 24 cases are being investigated for profiteering. He says even this takes a bit of time.
“We would need to analyse documents we have received from businesses (to explain their price hike) and whatever evidence and justification given by the traders. It will take a little while before we can take them to court.”
Guna also says that they have been having discussions with the investigation officers to speed up investigations so that the cases flouting the law would be brought to court as soon as possible.
For the convenience of consumers, Low says the ministry recently launched a new app for mobile phones called Mykira GST where people can check on-the-spot the price of goods and make inquiries or file complaints there and then.
Guna reckons it will take at least two months before “the positive side of the GST” on the price of products become apparent.
“It is not going to be immediate. We need to do some compliance auditing and of course, enforcement is important to make sure that they comply with the regulation.”
He says consumers should be aware that there has to be a bit more time for businesses to re-adjust their prices as they go along and claim their input tax credit.
“We expect more companies and traders to claim the Special Sales Tax Refund so that it will reflect in the reduction in the prices.”
He explains that their officers cannot be everywhere and the public is encouraged to submit their complaints with details to enable them to act.
On the part of the ministry, he says officers are going down to the ground, including to the rural areas to make sure that prices are in tandem with the GST Act and Anti Profiteering Act.
“We will carry out a compliance audit on companies to make sure they are reducing the price according to whatever claim they are making.
“The positive side is that a lot are coming forward to discuss prices.”
Guna says one good thing that has emerged from the GST implementation is that consumers have become more thorough in finding out what they are paying for and are scrutinising their bills or receipts. “We expect the ‘positive side of the GST’ to be more apparent in the next few months but (for now) consumers have to be a bit patient.”
