Ministry’s GST price guide does not reflect reality, say shoppers

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KUALA LUMPUR (Apr 9): Consumers are complaining that Putrajaya’s price guide of 500 common items and what their prices should be after the rollout of the goods and services tax (GST) are not the reality on the ground.

They said many items, especially processed food and toiletries, some of which according to the guide should now cost cheaper, were instead priced higher than what the guide states.

According to an earlier Customs Department GST list, processed foods and toiletries would be charged 6% consumption tax when the customer pays at the check-out counter.

But in the price guide issued by the Domestic Trade, Cooperatives and Consumer Affairs Ministry, some of those items, such as yogurt, milk, diapers and detergent, should come down starting this month.

The Malaysian Insider visited four popular hypermarkets in the Klang Valley on April 4 to check the prices of 10 selected items, which according to the guide, should be cheaper after the implementation of the GST.

Our checks found that in all the hypermarkets, at least five out of 10 items were still priced higher than what the guide (pic, right) states. At one store, prices of eight items were higher than what is listed in the guide.

However, Domestic Trade, Cooperatives and Consumer Affairs Minister Datuk Hasan Malek said the guide was to help consumers determine whether businesses were taking advantage of the GST by increasing prices, and not meant to set prices for businesses.

“Prices in the guide were formulated based on studies by Customs and the Finance Ministry. It’s to help shoppers tell whether the price of something is reasonable or not.”

“But consumers can complain to us if they feel that a store’s price is too high and we will investigate,” Hasan told The Malaysian Insider, adding that the guide has published several numbers and email addresses for consumers to forward their complaints to.

GST items are supposed to be 'cheaper'

Among the list of 500 items in the guide, 331 items are supposed to be cheaper by between 0.2% and 3.7%, the majority of them fresh food.

In comparison, 138 items would be pricier by between 1.3% and 5.8%, while 29 items will remain unchanged.

The Malaysian Insider chose nine types of common items bought by the working class that are supposed to be charged GST.

These are yogurt, fresh milk, sardines, sweetened creamer, soy sauce, bath soap, diapers, detergent and dish-washing liquid.

Putrajaya’s price guide states these nine items should go down in price.

The survey compared a 10kg bag of rice, a GST-exempt item, which the guide also claimed should go down in price.

Prices on supermarket shelves were checked against prices in the guide.

The guide lists several brands and packages of these items. But the survey chose one brand and package that is sold across four hypermarkets.

For instance, the price of a bag of 80 “Pet Pet” M-size diapers was compared across all hypermarkets in Puchong, Shah Alam, Gombak and Ampang.

When a store did not carry that particular brand, another brand of the same item was chosen.

The items were: Nestle Yogurt Fat Free 135g, which the guide priced at RM1.88; Marigold Fresh Milk 1 litre, RM6.73; Top detergent 1 kg, RM5.62; Breeze colour care liquid detergent 2.8kg, RM15.73; Jalen sweet soy sauce 650ml, RM6.02; Teapot sweetened creamer 500g, RM2.96; King Cup sardines 425g, RM6.66; May bath soap, RM2.86; Pet Pet diapers M80, RM37.56; Axiom dishwashing paste 350g, RM3.85, and Jati rice SST 5% 10 kg, RM25.95.

The guide says the prices in it were compiled by the ministry as of November 2014.

The impact of the GST, the guide said, was calculated based on studies by the Customs Department.

“The prices which are quoted could change according to a variety of factors such as demand and supply, seasonal changes, natural disasters and foreign exchange rates,” says the guide.

Small decrease, high increase

On the whole, our survey found that prices varied widely between the guide and what was on store shelves, as well as from store to store.

In Ampang, eight item types were priced higher than the guide, while two were priced lower. The same hypermarket chain in Puchong had six items which were higher and four lower.

In a different supermarket chain in Shah Alam and Gombak, five items were priced higher and five were priced lower.

The survey found that a diapers brand was the item with the highest price difference between the guide and store shelves.

The guide says a packet of Pet Pet M80 diapers should be priced at RM37.56 on store shelves.

In Ampang and Puchong, it was sold at RM10.99 more at RM48.55. The guide states that the price of this item should come down by 2%.

The store in Shah Alam priced it below the guide’s price at RM33.50.

Next in terms of price difference was detergent. A 2.8kg bottle of Breeze colour care was RM7.06 higher in Ampang and RM2.26 higher in Gombak, than the guide’s price of RM15.73.

The third biggest price difference was in Marigold milk. Two supermarkets in Ampang and Puchong sold it for RM7.45, 72 sen higher than the guide’s price of RM6.73. Two other stores priced it lower than the guide's price of RM6.59.

According to the guide, the prices for detergent and milk are supposed to come down by 1.4% and 1.1% respectively.

The most common item that was sold at a lower price than the guide was soy sauce. The guide’s price for a 650 ml bottle of Jalen Brand soy sauce is RM6.02 but it was sold at between RM4.49 in Shah Alam and RM5.25 in Ampang.

Three stores also sold May bath soap at a lower price, between RM2.55 and RM2.82. The guide states a pack of three should cost RM2.90.

The ministry did not respond to queries on the difference between prices of these items in its guide and on the supermarket shelves.

Food stall operator Mohd Azmy, 49, was cynical when asked about the price differences between the guide and the stores, especially for items that the guide claims should go down in price with the GST.

“The prices that are coming down, they go down by a small percentage, between 1 and 3%,” said Azmy.

“But prices that go up, they go up by a higher percentage such as 5%,” said the food vendor.

Buyers confused

Another shopper, operations manager Aiman Abdullah, 37, also does not put too much weight on the guide.

“Prices can go even lower than what the guide says but they can also be more expensive depending on which store. You have to always be on the lookout for deals, you can’t just depend on it.”

He said some people were still confused about claims that the GST will lead to lower prices because it replaces the sales and services tax (SST) of 10%.

“So people think that because the old tax was 10%, things should be cheaper by 4% because the GST is 6%,” Aiman added.

With the previous SST regime, only certain items and services are taxed. After GST, all items and services are taxed unless specified otherwise.

So in reality, the belief that prices will come down by 4% is an illusion because before GST, a majority of all consumer goods and services were not charged the SST.

“So it’s really up to consumer to look for the best deals,” said Aiman. – The Malaysian Insider