Ok point taken, what I meant is not expense or cost to business. I mean every person along the supply chain will be impacted personally by increase in cost of living. And they in turn will charge more to be able to live normally. Isn't that a reasonable assumption?

It's difficult to explain GST concept with pure words and best use diagram to explain. Suggest you google GST and get better understanding. I used to think like you before I understand the concept... This is a clear example where the govt needs to spend considerable time to educate and explain GST to the public. GST will doom to fail if communication is inadequate

HaHa ,aku janji BR1M increase to rm 1000.00 next year - that is where the money come ! All the family members contribute 1K , but only some family get 1K - good idea . Lol

What I mention is not about the mechanism of GST.
Can we agree everyone on average has to pay more for goods and services?
If Yes, than there will be this vicious cycle and will cost everything to go up.
There is also the Festive Season Barang Naik syndrome - invented by myself
People will use any excuse to raise prices.

GST = gay sex and transexuals. Sounds like another version of sex and the city.

This post has been edited by AMINT: May 21 2013, 11:34 PM

I think GST - Goncang Sampai Tiada - more match .

This post has been edited by skcJVN: May 22 2013, 12:15 AM

Hi Jedi, i wish to understand more on GST, i tried to google but i cant get any suitable website can explain to me how it works...can u post a link here, help us to understand the mechanism of gst ? thanks in advance

I am PR supporter and LGE is my idol. but when he said on average every citizen need to pay 1k addtional on tax....im doubt his statement...what if the additional tax income is generate from rich ppl ?

I would agree on GST if i can see rich ppl contribute more tax...and personal tax rate need to be adjust...

Rich ppl buy more thing pay more GST , but they can afford . Poor ppl buy less thing pay less GST , but they hard to afford ! GST is to make sure EVERY trading \business activity no miss from taxing

Some realty already charged 6% GST. I've been charged in year 2010 when i rent out my condo. 5% GST back then.

mind explaining a little more from your own understanding?
using layman terminalogy, i would expect compounded addition.
i mean, supplier a to supplier b. if supplier's a product somehow suffered an increase, he will impose the addition to supplier b. a will collect additional GST to be paid to gomen. hence supplier b would pay supplier a their new rates + GST.
if supplier B starts selling to supplier C. they would surely repeat the same thing, no?

What I mean is the full list of stuff we consume, which is subject to GST, and which is not. Currently there are no detailed list....

Eg.

Food stuff.....zero-rated --> rice, meat, vege. standard-rated --> canned food, milo, 100plus

Can't find the list....

Let's use numbers, maybe easier to understand

Supplier A sells stuff to Supplier B --> price RM100 + GST RM4 = RM104. Supplier A remits RM4 GST to Customs

Supplier B re-sells the same stuff to Supplier C --> RM110 + GST RM4.40 = RM114.40. Supplier B claim RM4 from Customs. So, nett pay to Customs is RM0.40

Supplier C re-sells the same stuff to Consumer --> RM120 + GST RM4.80 = RM124.80. Supplier C claim RM4.40 from Customs. So, nett pay to Customs is RM0.40

Total GST collected by Customs is RM4.00 + RM0.40 + RM0.40. Which is the eventual selling price RM120 x 4% = RM4.80.

Therefore, it is not "layer on layer". The final consumer actually pay the GST. Business have no reasons to hike price. But in actual fact, some business will take opportunity to profit I think

Yes, and there is bound to be other effects.
Supplier A will also pay higher price for necessities that he and his family uses personally.
After all Supplier A is also a consumer, right?
So to make ends meet, he will raise the price by a few RM as well.
The same with supplier B and C and so on.
This is the indirect consequence of GST.
And like you said, businesses will take the opportunity to raise prices for no good reason.

No reason?

Without GST, previously with no GST, start with Rm100, then sell at Rm120,
now with 4% GST, final price become RM124.80, there is 4.80 hike in price already, why it is no reason?

Also there is considerable paper work need to be done and hire personnel to do tax computation, as a business may not deal with 1 item only. A product that may need 10 items to make up for it, so need to take in 10 GST paid previously, kind of tedious job.
So it means company may need to hire more personnel to do the job for GST, or increase the the workload of office admin, so potential increase of cost, another reason to hike price.

If gov managed to raise its revenue from GST, means that someone in between or consumer to pay for it already.
Money won't pop up on its own, if gov managed to raise 10 billion revenue from GST, then someone need to pay the 10 billion, you do not need sophisticated math to do the counting.
Either corporate profit become less (company absorb the GST, and price remain the same), or consumer need to pay more for it. (eg. 120, become 124.80)

Company profit less or some may even no profit or loss, another reason to hike price.

Consumer pay more for it, then has less money left for others, demand wages hike from employer (very typical and norm).
Wages hike, more cost to employer, another reason for company to hike price to compensate.

This post has been edited by cherroy: May 22 2013, 10:10 PM

That's y I said it's layer on layer. Due to GST, there will be a charge on every goods sold. For supplier B, lets say he sells at RM110 like u said. However, previously, he buys at RM100, now since RM104, he will need to charge more to cover his losses of RM4. Yes you will say he can claim back. However think it this way, claiming back will be a later issue. Do you think the Customs will remit the money IMMEDIATELY? Claiming back will take at least 2-3 months or maybe more.

See those people claiming for tax refunds from IRB. Some takes up to 2 years just to get RM100 from IRB. Now, we're talking about thousands in GST paid to the Customs. Do you think they can get back the money as soon as they need to pay? Remitting will be easy, but claiming it back is like climbing mount everest. So to cover for the temporary difference in loss due to GST, they will then charge it to Supplier C. So it's definitely not RM114.40 as you said. To cover for the temporary difference, they will definitely sell at RM118.40 to Supplier C since they paid extra GST RM4 to Supplier A to remit to the Custom.

Dude, it's a rolling ball effect. For those who said I dun understand this GST system, you're definitely too naive. You think you guys understand when all you guys are doing is simple maths calculation. The effect is more than just simple maths. Think it this way as kicking a ball. Everyone wants it, but only one player out of 22 can get it. Same like GST, everyone wants to claim, but how fast can u claim it back? Sooner or later, it will be applied layer on layer, like charges on increasing balance.

Then there is also the, like u guys said, input and output tax. Do u know input taxes cannot be claimed? Input taxes will be like, lets say we rent a unit of shophouse for our business activity. Rental, from the owner point of view, will charge service tax. Lets say purchase of business equipments like kitchen stuffs and so on, everything now is subject to 4%. And sadly, we cannot roll the ball to consumers for this 4% because it is not for resale purpose. So, we will impose this 4 on the goods we produce as cost and charge it to end users or the next layer's group.

Remember, GST is not only output tax, but input tax as well. When input gets affected, is will indirectly affect output. Thus, at every layer's input, when it cannot be translated to the layer, it will become an indirect cost added onto output. In the end, don't u guys think it's layer by layer thingy? Do you guys think buying and selling is that easy as Supplier A sells 100 to supplier B and charge 4%?? Hello, how about the boat and so on. Said on MoF website that only essential daily goods not subjected to the GST. But if input cannot be passed onto the next layer, it will become an indirect cost on the selling price of output.

Yes. it is all included... and get used to it in future..

Dude, business only pay the NETT figures lah. Ie. in the example above, supplier B and C only remit RM0.40 each to Customs. Why want the hassle of remitting full amount of money and then claim back difference later ? Isn't that stupid ?

Did you actually attended any GST seminar ? From your reply I know you haven't At least google a little bit of info and understand the mechanism first before making yourself a fool lah

I give out some information here, but what I got back is some moron calling me naive. I must have stepped on someone's tail previously.....

Kawan, may I humbly request you to read some info about GST first before we can talk any further ? If not, it is a waste of time you engage any form of discussion here

Let me give you some links :

http://gst.customs.gov.my/en/Pages/default.aspx

http://www.cch.com.my/my/ExecutiveEvents/E...pic&EETopicID=3

Hope you can quote your source when you blast away your points on GST in the future