Yesterday, many Malaysians were thrown into confusion when several media outlets mistakenly reported that the PH (Pakatan Harapan) Federal Government will not impose Sales and Services Tax (SST) on locally assembled (CKD) cars.
Director of Royal Malaysian Customs Department, Dato’ Sri Subromaniam Tholasy, immediately denied those reports, clarifying that motor vehicles, CKD or otherwise, will be subjected to SST come 1 September 2018. In the Proposed Goods Exempted from Sales Tax document that was made available on the Malaysian Customs official website, item 87.03 refers to the CKD kit (components that make up the final vehicle) which are unfinished goods and therefore will not be subjected to SST, he added in a press statement.
The 10 per cent (proposed) SST will only be imposed on the finished goods, in this case, the completed vehicle. Looking back, when the 6 per cent Goods and Services Tax (GST) was implemented to replace SST in 2015, we saw a price drop across the board, albeit marginal for some. Hence it is safe to assume that car price will see an upward revision when SST kicks in. By how much remains an open question.
In view of the zero-rated GST car price that was announced in early June, many jumped on the chance to reward themselves with a new ride which resulted in a spike in orders and a long waiting list that stretches beyond the tax-holiday period.
Bermaz Motor, the official distributor of Mazda vehicles in Malaysia has stepped up to say that the company will honour the zero-rated GST prices for all its customers who have secured a booking before 1 September 2018.
The booking process as we understood from an authorised Mazda dealer, involves putting down a refundable deposit of RM1,000, submitting the loan application and wait in line for allocations. If you manage to lock down the zero-rated GST price tag, you are looking at a nett savings of between RM4k (Mazda 2 mid-spec) to RM16.7k for the CX-9 AWD.