KUALA LUMPUR (Feb 27): Some members of the Federation of Malaysian Manufacturers (FMM) have begun to get their Goods and Services Tax (GST) refund claims, especially for those whose claims are below RM50,000.

FMM President Datuk Soh Thian Lai said the federation has met with Royal Malaysian Customs director-general Datuk Seri Subromaniam Tholasy recently, and understand that member companies who claim between RM50,000 and RM100,000, will be paid 80% of the amount while 20% will be retained until thorough verification is done on the claim.

“For those who claim above RM100,000, they are given two options, first is to get 70% of the amount paid and the remaining 30% after the verification; second option is to get 100% payout immediately, but has to provide bank guarantee for 30% of the amount,” Soh explained.

“So we are working very closely with the Government to speed up the refund process, so that SMEs (small and medium enterprises) can get the total amount, and the country’s liquidity will improve. We had a dialogue with Finance Minister Lim Guan Eng, and he promised to release the refund in stages this year, and we trust the Government is able to deliver on what they promised,” he added.

Soh said according to FMM’s survey on GST refunds in January this year, 316 of its 3,200 members revealed that they are claiming a collective amount of RM601 million.

“We will do another survey in April this year, to gauge the progress of the refund,” he said.

Soh was speaking to reporters after launching a Business Condition Survey FMM done jointly with Malaysian Institute of Economic Research (MIER), which found that only 15% of the respondents were not affected by the new Sales and Service Tax (SST) regime after the Government abolished GST.

The semi-annual survey was carried out between Dec 13, 2018 and Jan 26 this year, with 517 respondents from 16 industry sub-sectors nationwide.

The survey found that 39% of respondents claimed that SST has lack of clarity on application of procedures of exemption, while 36% were affected by the uncertainty of treatment of drop shipment, taxable services and invoicing, while 28% struggled with issues related to the mySST system.

In terms of cost increments due to SST, the survey found that only 15% of respondents did not see changes in cost, while 42% of them saw less than 5% increment, 34% experienced 5% to 10% increase in cost, and 7% of them faced more than 10% additional cost.