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GST illustration

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GST illustration

Postby avelc » Tue Oct 29, 2013 7:56 pm

Illustration that shows GST will increase property prices (from another forum).

Question: Does anyone knows if GST only applies to end consumers? or the entire supply chain?
eg: manufacturer gst 6% -> distributor 6% -> wholeseller -> retailer 6% -> end user.

Answer:
entire chain.

simplified:
each entity (gst registered) in the chain - pays net gst
i.e. each of these entity pays gst when buying and also collects gst when selling. so net goes to lhdn
e.g. purchase value $100, gst $6. sell value $200, gst $12. net gst to lhdn is $6. -> next entity in the chain until it reaches consumer.

meaning:
importer. prod $100. pays $6 gst. sells at $200 to wholesaler. importer collects $12 gst from wholesaler. net gst is $6. wholesaler sells to retailer at $300, collects $18 gst from retailer, so wholesaler net gst is $6. retailer sells to consumer at $400, collects gst at $24, and claims back $18, so retailer pays net gst at $6. consumer pays $24 gst but can't claim back from lhdn.

with the exception of consumer (or end user in your example) who pays full 6% gst but can't claim back gst from lhdn.
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Re: GST illustration

Postby FHBH » Tue Oct 29, 2013 10:14 pm

That is y property price n other things will be more costly. I reckon at least 10% more expensive in 2015 compare to now. Property probably can go up by 15% just on this GST alone, not even talking abt other factors like slowing supply by developers. Locals got distracted by government's property measure to "punish" foreigners. Wait till they digest e news n get panicky by end of e year. Everyone will chiong for property, especially whatever terrace below $750k RM.
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