Yesterday, it was reported certain telcos have apparently defied the order from the Royal Malaysian Customs to not increase the prices of prepaid top ups after the implementation of GST. This has led to a meeting between local telco industry and Customs today to clarify the matter.
As it turns out, the amount that these telcos has charged yesterday was indeed correct according to the statement released by Communications and Multimedia Consumer Forum of Malaysia (CFM) which detailed the results of the meeting between both parties.
In other words, the prices of prepaid top up are higher than before due to the additional 6% GST. As an example, consumers now have to pay RM 10.60 for a RM 10 prepaid top up coupon. However, the telco industry will be offering free voice minutes and SMS for all customers that reload RM 5 and above for the next three months as a transitional measure.
While the actual value of the free minutes and SMS was not clearly detailed in the statement but it did provide some examples: 5 minutes and 5 SMS for every RM 10 top up as well as 10 minutes and 10 SMS for every RM 20 top up. This will take place from tomorrow, 3 April 2015 onwards.
For everyone’s benefit, here is the full media statement from CFM regarding the issue:
FOR IMMEDIATE RELEASE
THURSDAY 2 APRIL 2015
IMPLEMENTATION OF GST ON GOODS & SERVICES IN THE TELECOMMUNICATIONS SECTOR
Clarification On 6% GST For Prepaid Top Ups
KUALA LUMPUR – A meeting was held between the telco industry and the Customs Department today to clarify on GST implementation for prepaid services. During the meeting, the following was agreed:
1. Reload for prepaid is subjected to GST upon activation.
2. The value of the reload is identical to pre-GST, the only difference is that GST is added to the reload amount.
3. The industry is in compliance with the GST Act 2014, and therefore has added GST to the current value of reload (so for example, RM10 reload value will now cost RM10.60), which is agreeable to Customs since the underlying value of the reload is unchanged.
4. The industry agrees with Customs that many customers feel the burden of GST for some items, including prepaid. Therefore, as a transitional measure, the industry will give to all customers who reload RM5 and above a value which is higher than the GST addition, in forms of free minutes and SMS. For example, customers will get 5 voice minutes and 5 SMS for every top up of RM10. While for reloads of RM20, the customer will receive 10 voice minutes and 10 SMS. This will apply for three months, starting tomorrow, 3 April 2015.
5. The Customs and the industry will continue to work together on the implementation of GST.
Mobile communications services (excluding International Roaming) is a standard rated item under the GST Act 2014, and since mobile communications services are neither GST exempt nor zero rated items, the industry is required by law to charge 6% GST. International Roaming charges are zero rated.
The GST paid by customers will be collected by telcos and remitted to Customs, in accordance with the GST Law and guidelines for all goods and services consumed.
[Image credit: Amanz.MY]