Guan Eng: SST exemption for molluscs, crustaceans

Finance Minister Lim Guan Eng has announced that all molluscs and crustaceans will now be exempted from the Sales and Services Tax (SST).

The amendment was made after he said he mistook them to be “luxury items” and thus applied a 10 percent SST on them.

“I thought these things were luxury items but I now realise that many of them are not […] many are used for dishes like nasi kandar and char kuey teow.

“I have to admit I love char kuey teow and I questioned why there was a 10 percent tax on a dish that the public enjoys.

“[...] therefore, to allow those from the middle and lower income group to be able to enjoy seafood without SST, I as the finance minister will instruct the Customs Department to exempt food in the (crustaceans and molluscs) list from a 10 percent SST,” he told a press conference at the Finance Ministry in Putrajaya.

He later added that the exemption was made for all items on the list to avoid confusion.

According to the SST list of taxable items, crustaceans include rock lobster, lobster, crab, Norway lobster, cold water shrimps and prawn, other shrimps and prawns and other crustaceans.

Molluscs include oysters, scallops, cuttlefish and squid, clams, cockles, ark shell, abalone and other molluscs.

Customs’ mistake on ikan masin

Accompanying Lim today was Customs Department deputy director- general Paddy Abdul Halim (below, right) who admitted that applying a 10 percent SST on ikan masin (salted fish) was a mistake by the department.

“The department overlooked ikan masin (salted fish) and did not exempt it from the 10 percent SST tax as instructed by the minister.

“The department apologises for this oversight and will instruct for to be exempted immediately. Traders are requested to not charge SST for salted fish,” he read from a statement.

Paddy also said the proposed guide for SST items, previously published on Aug 25, had now been gazetted and will continue to be updated until the end of the year.

Lim previously clarified that salted fish and other staples for middle and low-income households will not be taxed as such.

The minister said he anticipated the above exemptions to affect the targeted SST collection amount but contended the government would be able to make up for it.

The government aims to collect RM22 billion via the SST by September next year.

No offsetting GST with SST

The SST came into effect on Sept 1 after the Pakatan Harapan government repealed Goods and Services Tax (GST) as part of its election promise.

When asked if companies could offset their outstanding GST payments with the SST, Lim said this was not possible as they were discrete tax systems.

“These are two different (taxation) systems established under different laws and different acts of Parliament. So, unfortunately, we can’t do this offset,” he said.

Lim, however, hinted at the possibility of parties waiving outstanding GST-related penalties but maintained that this was the prerogative of the Customs Department.

-Mkini