Past projects have also been given tax relief: Customs DG

PUTRAJAYA: Tax relief has been awarded to many projects in the past, including the SMART tunnel, the Bukit Jalil Sports Stadium, Kuala Lumpur International Airport (KLIA), Mass-Rapid Transit (MRT) and the Express Rail Link (ERL), according to Customs director-general Datuk Seri T. Subromaniam.
Responding to the recent Goods and Services Tax (GST) tax relief granted to the East Coast Rail Link (ECRL) project, he said earlier projects of the time received relief from the Sales and Service Tax (SST) and import duties.
"It was the Finance Ministry's call (to grant tax relief) as these projects were classified as Approved Service Projects whereby the sectors that could get reliefs were from the transportation, utilities and telecommunications sectors," he told reporters at the Customs Department headquarters, here today.
Subromaniam stressed that various criteria needed to be met for the reliefs, as the Customs Department implemented the tax.
"Under the GST, exemption to businesses within the supply chain will not cause the government to lose anything as it did not involve the end user.
"This is unlike SST in general when reliefs were given, the government loses out on revenue from taxes it is expected to collect.
"Why is this an issue when no one questioned past projects with similar exemptions?" he asked.
In the case of ECRL, Subromaniam said the government was the end user as it owned the project through the Malaysia Rail Link Sdn Bhd and that the relief was granted under Section 56(3)(a) of the Goods and Services Tax Act 2014.
Claiming that other parties are twisting facts to mislead others, Subromaniam clarified that the 6% tax relief was not derived from the RM55 billion in ECRL's cost but on other related acquisitions which cost far less.
His response came after Amanah vice-president Husam Musa produced documents alleging that the China-owned Communications Construction Company (CCC) was given GST relief for the ECRL project.