Starting from today (1/6/2018), the Goods and Service Tax (GST) percentage is dropped to 0% from the previous 6%. Yay!!
So, will there be any changes to the parking fee that we are so used to paying? The answer is YES & NO.
You might think that doesn’t sound right. Let us explain it to you (in our understanding) below.
Paying your parking fee with cash
Before GST was being implemented on 1/4/2015 in Malaysia, there was Service Tax which was set at 6%. Service Tax was applied to certain prescribed goods and services in Malaysia. Generally, the imposition of Service Tax is subject to a specific threshold based on an annual turnover ranging from RM150,000 to RM500,000. Most parking lots charged 6% Service Tax on their parking charges (see photos below).
Starting 1/4/2015, GST of 6% has replaced the 6% Service Tax on parking charges. Therefore, parking fees remain the same before and after GST was implemented.
Refer to the photos of parking receipt of Mid Valley Megamall below, you will notice that parking management merely replace the 6% Service Tax with 6% GST.
Starting 1/6/2018, GST was dropped to 0% (zero-rated). Based on the parking receipt in Mid Valley Megamall on 1/6/2018, it seems like the parking fee isn’t affected by the change. So our guess here would be, the parking management Mid Valley Megamall has been “absorbing” Service Tax and GST for its customers. This is just our assumption but from this scenario it seems like that is the case.
Mid Valley Megamall Parking Receipts
Paying your parking fee with Touch ‘n Go card
Things were a little different when you’re paying the parking fees with Touch ‘n Go card (when available).
Before GST (6%) was implemented, there is a surcharge of 10% (of the total parking fee) on top of your parking fees when you pay with Touch ‘n Go.
When GST (6%) was implemented, besides the additional 10% surcharge, there is an extra of 6% GST on top of the 10% surcharge.
Parking fee = RM 10.00
Touch ‘n Go surcharge (10%) = RM 1.00
GST (6%) on surcharge = RM 0.06
Total parking fee (paid with Touch ‘n Go) = RM 11.06
So by looking at the example above, dropping the GST from 6% to 0% will means that you’re paying less when you’re paying the parking fee with a Touch ‘n Go card.
What about Season Parking?
We have not got any concrete information regarding season parking but our best guess is that your season parking will be cheaper because you don’t need to pay 6% GST anymore. We will like to hear from you to confirm about this.
What about Sales and Service Tax (SST)?
The government has announced that SST will again be implemented starting in September 2018. Since we are still unsure if there will be any changes to the SST system with regards to the old system, we will wait for the new SST regulations to concrete and find out will there be any affect on parking fee. Stay tune.
Let us know about your thoughts in the comment section below.