KUALA LUMPUR (March 22): State investment fund 1Malaysia Development Bhd (1MDB)'s disposal of its power assets and land assets are not subjected to goods and services tax (GST), because the company was not registered, said Prime Minister Datuk Seri Najib Razak.

Najib said until today, 1MDB was not registered under GST, because 1MDB does not have income that qualifies as taxable supply.

"The Share Sale and Purchase Agreement signed with the China General Nuclear Power Corporation (CGN) for the disposal of 1MDB's 100%-owned power asset Edra Global Energy Bhd was not subjected to GST," Najib, who is also Finance Minister, said in a written reply to Kampar MP Ko Chung Sen yesterday.

Najib, who is also the chairman of the Advisory Board of 1MDB, said the disposal of the land in Tun Razak Exchange (TRX) to Lembaga Tabung Haji was a piece of land used for residential, and it is not subjected to GST.

Ko has asked the Finance Minister on whether 1MDB is registered for GST and what was the sales of 1MDB and the amount of GST collected, as well as the amount of GST collected from the sale of Edra Energy and one lot of land in TRX to Lembaga Tabung Haji.

Since April 1 last year, the government requires any person who makes a taxable supply for business purposes to register for GST, if the taxable turnover of that supply exceeds the threshold of RM500,000.

1MDB disposed Edra for RM9.83 billion in November last year, which sparked objections from critics who viewed the sale of strategic assets to foreign companies as a risk.

Meanwhile, 1MDB had in May last year, sold a plot of land having the size of 2.83 hectares to Lembaga Tabung Haji for RM188.5 million, causing an uproar which forced Lembaga Tabung Haji to seek to sell the land; although Lembaga Tabung Haji had later on decided not to.