6% GST IMPOSED ON ATM WITHDRAWAL EFFECTIVE 1.4.2015
Be prepared to pay Goods and Services Tax (GST) on banking service fees from April 1 next year, the Finance Ministry advised via a posting on its Facebook site today.
While no GST applies when you make withdrawals from your own bank ATMs, the 6% tax will apply on the RM1 MEPS fee when you withdraw from another bank ATM.
The Finance Ministry reiterated that GST only applies to the RM1 MEPS fee, raising it to RM1.06. But the amount withdrawn, for example RM100, remains.
Money transfers will also see GST applied on the service fees. This means the commission a bank levies for its service in issuing either a cashier’s order and demand draft will be increased by 6% – but not the amount being transferred (just like ATM withdrawals).
For telegraphic transfers, there is a commission charged by the bank – this service fee too attracts GST. The same principle applies for recurring or periodic remittances – GST applies only on the commission.
Moneychanging does not attract GST. But if a service fee is charged, a 6% extra is applied due to GST.
Taking loans from banks will also see the various fees subject to GST, but not the actual loan amount.
Similarly with cheques and credit cards – the actual payments are GST-free but service fees aren’t.
This means the annual subscription fee for credit or debit cards are subjected to GST, but interest isn’t.
Fuller details on the GST applied on banking charges have been outlined at gst.customs.gov.my.