Hit the brake on mad rush: Cars to remain cheaper after SST rolls in

Consumers will continue enjoying lower car prices as passenger vehicles will be exempted under the sales and services tax (SST) system.

According to a list released by Customs Department director-general T Subromaniam, passenger motor vehicles are among the items that will be exempted from SST.

These include sedans, four wheel drives, station wagons and even racing cars.

Furthermore, the SST exemption list also includes various car parts, such as accessories, fuel pumps and fuel cut-off valves.

There has been a mad rush to purchase new cars following the zero-rating of the goods and services tax (GST) beginning June, paving the way to a tax holiday period until the SST comes into force.

Perodua, for example, had reduced the price of their vehicles by up to RM3,500 during the tax holiday period.

Under the GST regime, cars were taxed at a rate of six percent and prior to that, a rate of 10 percent was imposed under the old SST system.

The rush was based on the assumption that the government will restore the 10 percent SST imposed on cars prior to GST.

Motorcycles, bicycles, vehicles for the transportation of goods will likewise be exempted from SST.

Other notable items that are exempted from SST include aircraft such as helicopters and aeroplanes, and spacecraft including satellites and various ships. -Mkini