Putrajaya: Prepaid Top Up cards will not be imposed an upfront GST payment

5:44:00 AM Dickwyn Y 0 Comments

One of the biggest debates when GST was first implemented on April 1st was the inclusion of 6% upon purchase of a prepaid reload coupon. For the first week, the authorities switched between including 6% to not including 6% for a few days and ultimately they ended up with a solution which all the telecos agreed to.

That was, GST will indefinitely be included upon purchase of reload cards but teleco companies will reimburse customers with more value for their top-up like additional call minutes.

After about a month implementing this scheme, this morning, the Communication and Multimedia Minister Datuk Seri Ahmad Shabery Cheek announced that prices for prepaid reload coupons will not be charged the 6% GST. That means that when buying top-up cards, you will be paying RM 10 for a RM 10 reload.

"We don't only look at the people's need in terms of affordability but also the quality of service. What's the point if it's cheap but there are dropped calls, no 3G connectivity, you cannot use WhatsApp, that's why it's the telcos’ responsibility to improve their services," Communications and Multimedia Minister Datuk Seri Ahmad Shabery Cheek
Although the guideline does not allow teleco companies to charge users 6% upfront when buying reload values for their prepaid number, but the authorities will be imposing GST towards teleco companies for the services they provide. Sounds a little complicated right?

So, basically teleco companies will only charge you GST when you're using their services like making calls and sending text messages. While the reload coupons will remain RM 10, the price for a minute of voice call or text message will increase. Take for example, the current rate for 30 seconds of voice from UMobile costs 10 cents but when this new system is implemented, it'll likely increase to 12 cents.

All in all, it is all up to how the teleco company plans to offer these changes. They might very well just keep the prices of call minutes and text messages to be competitive. These changes will come in to effect within the next 6 months and by then, the prices for prepaid reload coupons will deflate back to the round number value.