Used motorcycle or car dealers are urged to apply for the new Goods and Services Tax (GST) margin scheme before April 1.
In order to be eligible to apply, they must be GST registrants.
According to Kuching Bicycle and Motor Traders Association executive advisor Temenggong Lu Kim Yong, the margin scheme allows them to charge tax on profit margins from the sale of a used motorcycle or car, not on the overall selling price.
“Under the GST margin scheme, GST is not imposed on the overall selling price of used or second-hand vehicles but on the profit margin.
“For example, a dealer buys a used car from an individual for RM3,000. After repairs, the dealer sells at RM3,500. GST will be charged on the RM500 difference, not the full selling price. That means the dealer has to pay the government six per cent of RM500, which is RM30. The buyer of the car will pay RM3,500 which is already inclusive of GST,” he explained at a press conference yesterday.
Lu pointed out that by imposing GST on the margin, the scheme prevents used vehicles from being taxed twice.
“This will also lighten the financial burden of end buyers as well as reduce the anxiety of used vehicle dealers, particularly our association members.
“This scheme is a result of a meeting between industry associations and Deputy Finance Minister Datuk Chua Tee Yong and the Customs Department recently.
“This is good news for dealers, as they do not have to apply for the secondhand dealers license, which is more difficult to get,” he said.
GST will not be imposed on the sale of a used vehicle from one individual to another or from individual to dealer.
In order to be eligible to apply for the GST margin scheme, dealers must be approved GST registrants before April 1. For more information or to apply, visit the Customs website at www.customs.gov.my.
User can register Margin Scheme online at HERE
Note:
1. You must have registered GST account under Tap.
2. Once you login Tap, find special scheme, and follow instruction for margin scheme.
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