KUALA LUMPUR, July 10 (Bernama) -- The Goods and Services Tax (GST) to be implemented on April 1 next year will make Malaysia's property industry more competitive and lower project costs. This might indirectly reduce property prices.
Royal Malaysian Customs Department Deputy Director GST Division Tan Sim Kiat said the GST, to replace the existing sales and service tax (SST), will enable contractors to claim their input tax.
"At present, contractors incur a lot of costs on professional services involving engineers, architects, lawyers, surveyors, and consultants at six per cent, as well as a 10 per cent sales tax on equipment, which they can't claim back.
"But under the GST regime, it's completely different. They(contractors) will be able to claim back all this (tax), which may actually then lead to lower construction costs," he said at the National GST Conference 2014 here today.
Tan was a speaker at the second session on "Impact of GST on Property-Related Industries," at the two-day conference organised by the Malaysian National News Agency (Bernama) and Tax Advisory and Management Services Sdn Bhd.
He said the input tax would be refunded within 14 working days for online submission and 28 working days for manual submission.
According to Tan, land for agricultural and general use, like for burial, playground or religious and residential purposes including serviced apartments, are categorised as exempt supply.
Land used for agriculture does not include that for hunting and fishing activities.
The developer or land owner can claim input tax on GST expenses incurred in providing infrastructure and public amenities, including roads, drainage and religious buildings.
The GST will be levied at six per cent.