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MCMC said Prepaid Reload subjected to GST, will assess implementation

The Malaysian Communications and Multimedia Commission (MCMC) released a media statement today to clarify on the issue of prepaid reload pricing and the 6% Goods and Services Tax (GST).

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“I have been briefed by the celcos on this matter. From the beginning, communications services have not been included in the list of items which are exempted or zero-rated from GST, which means that consumers will have to pay GST for these services. This includes prepaid reloads,” said Dato’ Sri Dr Halim Shafie, Chairman of the Malaysian Communications and Multimedia Commission.

MCMC said among the Telecommunication providers involved in the discussion include mobile operators Celcom Axiata, DiGi, Maxis and U Mobile.

Dr Halim reaffirmed that prepaid reloads are subject to GST and that this is in compliance with the GST Act 2014.

According to Dr Halim, the value of the reload is identical to the value prior to GST implementation; the only difference is GST is added to the reload amount.

Starting today, customers who reload RM5.00 and above will be given an additional value which is higher than the 6% GST in the form of free minutes and text messages, MCMC said. This will apply for three months beginning 3 April 2015.

In a meeting yesterday, the four mobile operators and Royal Customs and Excise Department have agreed to this treatment of GST on prepaid reloads.

MCMC added that a survey will also be conducted by the Telcos to assess if customers prefer lower reload values on which GST will be charged. For example, a RM10.00 reload could cost RM10.60 (RM10 reload plus 6% GST added) or instead of paying for the reload with GST, customers would pay RM10.00 and GST will be deducted after reload (RM9.43 reload plus 6% GST added).

On a another note, MCMC said that the industry is working to develop more affordable broadband packages for the people. This is expected to be announced in mid-April. It was reported that charges for broadband services are expected to drop by more than 6%. Currently, all broadband plans pricing were up 6% since April 1 with the implementation of GST.

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy