Food operators capping daily sales at RM1,400 to avoid GST

PETALING JAYA: With the Customs Department getting tough with traders who understate their Goods and Services Tax (GST), some food business operators have resorted to capping their business at RM1,400 a day to avoid having to collect GST.
Selangor and Federal Territory Ku Su Shin Choong Hung Restaurant Association president Lum Tuck Loy said some restaurants would rather "restrict their business" than to go through the hassle of having to maintain a GST accounting system.
"They will call it a day once their taking reaches RM1,400 as making RM1,500 or more a day would mean exceeding a yearly taxable turnover of RM500,000, the threshold that triggers mandatory GST registration under the law," he was quoted as saying in a report in Sin Chew Daily today.
He said although some smaller eateries operating in very competitive environment may not have collected GST from their customers or issued GST invoices, most medium and big restaurants in urban areas are complying with the Goods and Services Act 2014.
He told the daily that in fact, undercover customs officials have long been frequenting restaurants to assess their turnover.
They have also installed the Electronic Information System (EIS) or dongle at some restaurants' cash registers to monitor transactions and ensure that invoices are issued.
"Many restaurants have been caught (cheating), now no one dares to dodge GST," he said, adding that most restaurants of medium size and above have yearly turnovers exceeding RM500,000 and the majority of them do not cheat.
On Sunday, the daily reported customs director-general Datuk Subromaniam Tholasy as saying that the department has many ways to determine whether a company's GST statement is accurate, such as monitoring customer flow in a restaurant.