Double jeopardy of payments on GST and service charges – Sirwin Ooi
With the kicking in of the goods and services tax (GST) on April 1, 2015, most Malaysians are doing their shopping in order to stock up for at least a few months of supplies. Yet, we still cannot in any way evade from the impact of the GST implementation.
A hot topic is being circulated and discussed on social media online, where everyone is criticising the implementation of the services charges by the service providers, i.e., hotel or restaurant, on top of the implementation of GST. This act itself is just like putting more and more bricks on the shoulder of every consumer which I personally think is not liberal at all.
Our Deputy Finance Minister Ahmad Maslan on March 1 said: "The 10% service charge imposed by hotels and restaurants need not be paid after the goods and services tax (GST) is implemented".
I am asking myself while pondering on this statement, whether there is some truth to whether we can just ignore from paying the service charges without having an issue with the service providers.
Prior to April 1, 2014, service tax was collected by the service providers pursuant to the Services Tax Act 1975. The purpose of collecting such service tax is because the business owners are bound by the statutory duty to pay such amount of tax to the Customs of Malaysia. Vice versa, it is also an offence for a non-taxable person to collect such service tax under Section 31 of Service Tax Act 1975 which will render a conviction of a fine not exceeding RM5,000 or imprisonment of two years or both.
Now, the current disputing issue is between the usage of the word "service tax" and "service charge". Service tax is a statutory duty to be bound by taxable person prior to April 1, 2015. However, service charge is just another name for "tips" where there is no statutory duty or any obligation binding the business owner of a service provider. In fact or by law (as to my knowledge), there is no legal prohibitions refraining those service providers from collecting such service charges.
The government and the service providers should be aware that the tips or so called "service charge" should only be charged on voluntary basis when a consumer feels that good services had been rendered to them.
Unfortunately, service providers are violating the usage of the words "service charge" so that they can collect more and more revenue/profit/income for their own company. They do not care or bother that heavy burdens are being put on the shoulder of the consumer despite the issue faced by our country, i.e., the currency instability of our country and the impact of the GST implementation.
Personally, I am of the opinion that there is no way for us to evade from paying the service charge without having an issue with the service providers. Do bear in mind that the action of us walking in a restaurant or a hotel itself is crystal clear enough that we are giving our consent and compliance to be bound by the implementation of GST and to be charged.
Holistically, a way to solve this issue is with elected MPs ould listen and voice out our concern so that rules/ regulations or law can be promulgated in order to prohibit the imposition of both GST and "service charges" upon the consumers. – March 28, 2015.
* Sirwin Ooi reads The Malaysian Insider.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.
