KUALA LUMPUR: The implementation of the goods and services tax (GST) in April next year will only see a one-off effect on retailers and after that it will return to normal in about six months. Retail Group Malaysia managing director Tan Hai Hsin said the initial impact of the GST on retailers will be in the area of cost management as some suppliers may increase their current prices as a result of a knee-jerk reaction to the new tax. "Recent price hikes of essential items such as electricity and fuel have already diluted the profit margins for retailers. "As a result, the implementation of GST may just place further pressure on retailers in their cost structure, not just in terms of rising price of inventory but also in compliance cost," Tan told reporters after addressing the topic of GST compliance for retailers. Tan said although there were possibilities for the prices of certain goods and services to be increased by the retailers, consumers with a normal lifestyle, regardless of income group, will not suffer much. "This is because consumers are unlikely to pay more for basic goods and services because those items are zero rated and retailers have to absorb the cost. In other words, all the goods and services like rice, sugar, vegetables, meat, healthcare, education and public transport, will be exempted from GST. Thus, consumers are unlikely to pay more for essential goods and services." On what would be the effect of GST on medical rates, Tan said it is still too early to tell because healthcare is zero rated, so some clinics might choose to absorb the cost but they will not be able to sustain it in the long run. Also present at the briefing session was Datuk Nelson Kwok, president of the Malaysian Retailer-Chains Association.