QUOTE(EddyLB @ May 22 2013, 06:35 PM)
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

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.