Govt proposes to rename service charge, says Ahmad Maslan

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KUALA LUMPUR (Mar 24): The government has proposed to rename the service charge imposed by restaurants and hotels to restaurant charge or hotel charge so as not to cause confusion among the people, Bernama reported today.

It quoted deputy finance minister Datuk Ahmad Maslan as saying that this was to avoid the public from thinking that the 5%, 6% or 10% charge imposed was being channeled to the government.

"The service charge tax has nothing to do with the Goods and Services Tax (GST) which will be implemented at 6% from April 1.

"Service charge tax refers to the tips given to restaurant and hotel workers. Nevertheless, the government does not want the public to be confused on this charge," he told reporters after attending a dialogue session on GST.

He said the proposal had been conveyed to the Ministry of Domestic Trade, Co-operatives and Consumerism, and the ministry would issue a guideline.

He also said the service charge was not imposed by all restaurants as restaurant operators wanted to offer competitive prices, besides attracting more customers.

He further said that traders should not make GST a reason to increase prices.

The government, he added, would provide a special refund to companies that had registered for the GST but still carried stocks in hand which was previously subjected to the sales and service tax of more than 6%.

Bernama reported that companies that intended to make claims for the special refund must calculate their stocks in hand as at April 1, 2015, and ensured that the amount is equivalent to the sales tax that was paid on the inventory.

It said if the special refund payment is less than RM10,000, the claimant must produce the audit certification signed by the company's auditor and approved under Section 8 Companies Act, 1965.