Thursday 28 Mar 2024
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KUALA LUMPUR: The Association of Banks in Malaysia (ABM) has published a document on its website which lists the Goods and Services Tax (GST) treatment by its commercial bank members on over 300 general bank products and services, to provide clarity and assist the banking public in understanding banking charges post-GST. 

ABM executive director Chuah Mei Lin said all goods and services supplied in Malaysia would be taxable unless specifically exempted by the authorities. 

"Given the wide array of commercial banking products and services, we are of the view that the banking public would be better served with as detailed a list as is possible. That way, they will be aware of what types of bank products and services are subject to GST and those which are not," she said in a media statement this evening. 

ABM noted, however, that the list it provides is not exhaustive. Hence, it advised bank customers to their respective banks for the revised fee payable after the inclusion of GST, where applicable, for each product and service.

"ABM member banks will be publishing the detailed price listing at their banking premises or, as the case may be, in their respective websites," it added. 

Below is a broad breakdown, according to ABM, of how some banking products and services will be treated once the consumption tax is implemented:

a) Savings and other similar accounts

  • Interest paid by commercial banks to banking customers as a result of deposit taking through various types of accounts (savings, current, fixed deposit or such similar accounts) will not be subject to GST; but
  • Fees and charges imposed by commercial banks for services enjoyed in relation to these accounts, such as fees and charges for electronic funds transfer, encashment, interbank Automated Teller Machine (ATM) withdrawals (i.e. in cases where the ATM is not the ATM of the bank in which the customer's account resides), other ATM fees if any and phone banking, will attract GST;

b) Loans and advances

  • Interest charged for the provision of loans, advances or credit by a commercial bank to its customers will not be subject to GST; but
  • Fees or charges imposed in the provision of loans, advances or credit such as, where applicable, documentation fee, loan application fee, redemption statement request fee and/or processing fees will attract GST;

c) Transmitting money or remittances

  • The transmission of money or remittances will not be subject to GST; but
  • The commission levied for the issuance of a cashier's order or a demand draft and tele-transmission charges will attract GST;

d) Issuing Cheques

  • The issuance of a cheque by a drawer for payment is not subject to GST; but
  • The cheque processing fee will be subject to GST. Similarly, the cost of the cheque book (excluding stamp duty) and the service fee for encashment of the cheque over the counter will attract GST;

e) Credit and other payment cards

  • Finance charges in respect of the use of a credit card, debit or charge card are not subject to GST; but
  • The annual subscription fee, if any, charged for a credit card will attract GST in place of the RM50 service tax presently payable. GST is also payable with respect to card fees for debit and charge cards unless such fees are waived.

"Additionally, fees and charges which are imposed to compensate for loss, damages or in cases where the customer fails to meet certain requirements or conditions are not subject to GST," ABM added.

For further enquiries, contact ABM via ABMConnect at 1300-88-9980 (Monday-Friday) or post your query via eABMConnect on www.abm.org.my. 

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