GST Taxable Items



There has been a lot of questions lately with regards to which items that are taxable to GST. To understand the answer to this question, we will have to take a look on how GST works. Basically under the proposed GST Bill, all company with yearly revenue of RM 500,000 or more is required to register for GST. This will enable them to charge a GST tax which will in turn to be passed to consumer.

This would mean that any large supplier for raw materials above RM 500,000 is required to be GST registered. The list may include manufacturer of slippers that require rubber, raw materials to build homes, plastics to manufacture a computer and the list goes on. A company that is not GST registered will have no option but to absorb GST as a consumer. This may mean that a lot of smaller companies will also voluntary register for GST. This list may includes smaller retailers or service providers such as plumber for your toilet, contractor for your renovation, lawyers, and many more.

So far no GST taxable items has been provided. This is because all of the goods and services in the country is possibly subjected to GST tax. So, how do we find out which items will be subjected to GST ? As a common sense, any items that are not GST zero rated can and will be subjected to GST.

Eating at Warung does not incur GST ? Think again.

Yes, there won’t be any direct GST tax when you eat out these places. However, think of it this way. Basically GST implementation may incur extra operation cost with to a “Warung” operator although basic foods items are not subjected to GST. Items such as fuel, gas, water( over 200 units) , electricity( over 200 units) which is easily achievable by restaurants , kitchen supplies are subjected to GST. Even an Ice manufacturer will be subjected to higher operation cost when making and delivering Ice to a Warung operator due to increase of fuel cost. The list goes on with endless possibilities. A “Warung” operator may not volunteer to register for GST however there are no guarantee that the operator will pass the additional costs to consumers.

Fixing my toilet with a plumber will not incur GST ?

Think again, there are perhaps no direct GST tax charged when you hire a plumber to fix your broken toilet. Manufacturers of plumbing materials, PVC pipe, glue, tape, hammer, wrenches, etc which have turnover sales over RM 500,000 is required to be registered for GST. This means that these suppliers is required to charge a 6% GST which will in turn be passed  to your favourite plumber at the end of supply chain value. So ,what do you think your plumber will do since he had a 6% increase in his raw materials cost?