Yesterday was great day as GST is Zero Rated …
This was announced by the Kementerian Kewangan Malaysia as per instructed by Tun M to not collect the GST starting 1st June.
But do you think that there is really no more tax for Malaysia?
Well, As per informed by Tun M, government will be re-introducing the Sales Service Tax (SST) soon, as reported by Astro Awani.
Just in case you didn’t know, SST was there before GST and it was abolish after the GST introduced.
So the main question that everyone have on their mind … What’s SST and how does it work?
The Sales & Service Tax (SST) is the sales tax that is impose on one level by of production and normally it’s taxed at products is taken out from the factory or product owner (merchant level)
The below diagram shows what’s the difference between GST and SST (courtesy of Astro Awani)
Image via Astro Awani
The above illustrated diagram is from 2015 when GST thus you see more details on GST 
If it’s still confusing, the below might help to explain how the charges will be and you can try calculate this yourself.
Image via PaulTan.org
Here is an example of how GST and SST works:
- SST: Consumers ordered RM100 food at a restaurant, then they had to pay RM100 food fee, RM10 service charge and 6% SST for a total of RM116 at checkout.
- GST: Merchants must calculate the consumption tax by adding food charges plus service charges, that is, multiplying RM110 by 6%, consumption tax at RM6 60 cents, and the total is RM116.60.
So we get a cheaper by RM0.60. In short, after GST is reduce to 0 and replaced with SST, the cost of goods will be reduced
But anyhow, the new SST rules has not being defined and tabled out by the government and there might be some changes on it.
What do you think of SST re-introduction? Comment on your view below