This article first appeared in The Edge Financial Daily on February 28, 2019 - March 6, 2019

KUALA LUMPUR: 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 met with Royal Malaysian Customs Department director-general Datuk Seri Subromaniam Tholasy recently, and understands that 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 whose claim is above RM100,000, they are given two options. [The] first is to get 70% of the amount paid and the remaining 30% after the verification; and [the] second option is to get 100% payout immediately but provide [a] 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 refunds in stages this year.”

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

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

Soh said the Business Condition Survey carried out by FMM jointly with Malaysian Institute of Economic Research found that only 15% of the respondents were not affected by the new sales and service tax (SST) regime after the GST was abolished.

Some 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.