Government Urged To Relook GST On Stratified Properties
Date：2014/12/14
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KUALA LUMPUR -- A consortium of property related professional bodies Thursday urged the government to relook the Goods and Services Tax (GST) on stratified development properties.
The bodies are the National House Buyers Association (HBA), The Royal Institution of Surveyors Malaysia (RISM), the Malaysian Institute of Professional Property Managers (MIPPM), and the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS).
At a press conference here Thursday, they said that GST, to be imposed from April 1 next year, is expected to affect about six million stakeholders in the 15,000 stratified development areas in peninsular Malaysia.
HBA Secretary General Chang Kim Loong said the professional bodies had sent a petition to Prime Minister Datuk Seri Najib Tun Razak who is also the Finance Minister, to change the classification from standard rated tax supply to zero rated for maintenance charges, sinking fund and all other related charges paid by parcel owners.
"We urge the government to grant the zero-rated status to all joint management bodies and management committees," he added.
Meanwhile, RISM Vice President Datuk Lau Wai Seang said joint management bodies and management committee were not in "business to do business", as most worked on voluntary basis to upkeep and safeguard the common properties with contribution from members.
She added that low cost and medium cost stratified developments are being exempted from the GST, but it did not benefit them at large.
"They cannot run from GST charges from their service providers in terms of input tax, which is not claimable from the Customs Department, whereas under the zero rated supply, the input tax charged by the service providers is claimable," she said.
Under the GST Act 2014 (Act 762) Section 3 (1) and (2), joint management body and management committee are deemed to be carrying on a business whether or not it is for pecuniary profit.
Chang said efforts had been made by the professional bodies to engage the government on the matter.