KUCHING: The Goods and Services Tax (GST) on ATM transaction will only apply to the RM1 MEPS charges when a person withdraws from another bank.
According to a customs call centre officer yesterday, the withdrawn amount would not be subject to the six per cent GST rate. An individual could withdraw any amount – for example RM100 – and the imposed GST would be based on the RM1 MEPS per transaction fee, meaning that the rate would only be 6 sen.
“Any services charged by the bank are subject to GST. In regards to ATM withdrawals, GST only applies when a customer withdraws money from a different bank. The amount of withdrawal however is not subject to the tax,” the officer said when contacted through the GST hotline yesterday.
Currently, a customer is only charged RM1 for interbank transaction through the MEPS network. Beginning April 1, a customer withdrawing money from ATM that is different from the individual’s bank card would be charged RM1.06 inclusive of GST.
She added that customers would also be charged with the GST on the RM50 annual credit card subscription fees, provision of bank statements, loan processing, standing instruction services and maintenance services in relation to buying and selling of shares.
The officer said that while GST applied to the fees imposed, the actual amount involved in transaction such as the amount withdrawn and the interest paid for loans would not be affected by the tax.
The implementation of the GST next month, in regards to the banking service fees, has caused some reaction among the public who are not well versed on its implementation. Of late, many have raised their concerns through the social media on the perception that the six per cent GST rate would be based on the withdrawal amount.
Meanwhile, the Finance Ministry, via its Facebook posting last December said: “Any fees imposed by banks, such as MEPS charges, will be subject to GST. For example, if a Maybank card holder withdraws from CIMB ATM, and the MEPS charge is RM1, the GST rate will be RM0.06. The actual amount withdrawn will not be subject to tax.”
The ministry reiterated that the same principle also applied to money transfers and telegraphic transfers based on the service fee and bank commission respectively.
Money changing does not attract GST but a six per cent tax would be imposed on the service charge. This is similar with cheques and credit cards, where the actual payments are GST-free but not the service fee. Annual subscription fee for credit card and debit cards are subject to the tax but not the interest.