Watch out’, plainclothes customs officers tell GST evaders

PETALING JAYA: Irked by goods and services tax (GST) collections that “do not make sense”, the Royal Malaysian Customs Department is sending out enforcement officers posing as customers to nab traders who evade paying the true amount of the tax.
The department’s director-general, T Subromaniam, was quoted in Sin Chew Daily as saying the strategy would also be used to ensure the GST collected from traders tallied with their profits.
He cited the example of a restaurant which declared GST collections of RM5,000 to RM6,000 for three months, that translated into an average of only RM2,000 per month.
“If the restaurant opened for business 30 days in a month, the average daily GST collection was only about RM67, but our enforcement officers found the shop full of customers when they investigated.
“The GST it paid did not make sense,” he said.
He said plainclothes enforcement officers had only to sit for two hours in the restaurant to see how many customers it had and estimate how much profit it made.

Subromaniam also said checks by customs officers found there were traders who did not issue receipts.
“The traders have misunderstood, thinking they only need to collect GST if they issue receipts to customers and don’t have to collect if there is no receipt.
“The GST Act is clear on this – any payments collected from customers must include the GST.”
Subromaniam also said the GST Act gave very wide powers to the royal customs department to issue notices to traders solely based on observation and not a record or evidence.
On receiving the notice, he said, the traders concerned would have to pay the GST they collected and the same action would be taken against importers who made dubious statements.
He reminded traders who received the notices to correct the total GST they collected automatically to avoid legal action.

FMT Reporters | May 29, 2017