From GST to SST: How should you react as a car shopper?


It may be early days yet for the new Pakatan Harapan government, but the coalition’s campaign promise of abolishing the Goods & Services Tax (GST) means that this will happen in less than 100 days. In the case of automobiles, GST is expected to be replaced by the Sales & Service Tax (SST).

While there are always variables such as prevailing currency exchange rates, cost of materials and market competitiveness to be factored in with any price updates, the impact on recommended retail prices of new vehicles isn’t expected to be significant given that the switch from SST (10% previously) to GST (6% currently) back in 2015 only impacted recommended retail prices within a narrow band of 1% to 2%, and in some cases, there were no changes at all. Again, this is assuming most things remaining equal and that sales tax for vehicles will indeed be pegged at 10%.

Subaru’s pledge

Most of the car companies which we have reached out to have declined comment on the matter in the absence of a directive from the government. However, TC Subaru, the authorised distributor of Subaru passenger cars in Malaysia has announced a ‘Price Protection Scheme’ for its customers who have placed a vehicle booking against any price movement up till the 100th day of the new government.

Book a Subaru and be protected by price movements expected to happen within the next 100 days.

In the event of an upward price adjustment caused by the expected reinstatement of SST, TC Subaru will honour the original lower price at the time of booking (but before registration). Should prices be reduced at any given time before registration, the booking price will be adjusted to reflect the reduction, e.g. if the booking price is RM100,000 and the actual price at registration turns out to be RM99,000, the lower price (of RM99,000) will apply.

In the case of a downward price movement after vehicle registration, the customer will receive service vouchers equal in value to the price change, subject to a limit of RM3,000. For example, if a vehicle’s price is reduced by RM1,000 after the change in applicable taxes, the customer shall receive a service voucher worth RM1,000 in value.

Go ahead, keep on shopping

Suffice it to say, TC Subaru’s initiative shows that the company is willing to cushion the impending readjustment in prices to calm any doubts a customer may have in purchasing a new vehicle during this interim period, and we may yet see other car companies adopting a similar stance. More importantly, the move by TC Subaru is also an indication that the swap from GST to SST isn’t likely to impact new car prices significantly. You can carry on car shopping now.


Denis Wong

Denis Wong

In the age of misinformation and spin, Denis prefers candour and a counterpoint, because the truth matters.
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