Only RM1.4b GST refunds approved, but yet to be paid

Remaining RM18b requires further investigations and due diligence by Customs


The Royal Malaysian Customs Department has only approved RM1.41 billion in Goods and Services Tax (GST) input tax refunds, according to 2017 Auditor-General’s Report Series 2.

The report prepared by the National Audit Department (NAD) said only RM1.41 billion in refundable claims have been approved, but yet to be paid to the claimants as of May 31, 2018.

“The remaining RM18.14 billion represents claims requiring further investigations and due diligence by the Customs,” stated the audit report which was released yesterday.

In June, Finance Minister Lim Guan Eng claimed a staggering RM19.4 billion GST input tax had gone missing from the government’s balance sheet. Lim’s announcement  was widely criticised by former government officials and ministers who denied the allegations. They claimed the money was still within the Treasury.

Meanwhile, NAD urged the Customs to resolve the input tax refund backlogs for the payments to be authorised.

“The Customs should report verified pending input tax refund to the Finance Ministry for repayment purpose,” said NAD.

The NAD wants the Customs to resolve the pending payments owed to the companies to get the exact amount and status of repayments.

The Customs said the NAD should also take legal actions allowed by the law for late registration and delay in sending statements involving companies.

The NAD also found that the Custom has allowed input tax refunds of RM930 million for claimants exempted by the Finance Ministry.

The two companies, which were awarded exemptions from paying GST, were paid RM295.9 million and RM629.5 million via 35 input tax refund claims.

Input tax is a tax paid by the manufacturer when buying raw materials or service. Total GST incurred on input can be deducted from the amount of the GST charged by claimants.

The missing RM19.4 billion in GST input tax was meant for refunds from April 2015 to May 31, 2018. 

In the revelation, Lim said the existing repayment fund was only RM1.48 billion, which resulted in the federal government facing an RM18 billion shortfall to pay for the GST refund.

Lim’s claim of the missing fund invited many reactions from members of the Opposition, who asked Lim to back his claims with proof.

Rembau MP Khairy Jamaluddin has lodged a police report over Lim’s claim, while former Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah files a report with the Malaysian Anti-Corruption Commission.

The audit report did not state the status of the alleged “loss” money.

Between 2015 and 2017, the report said RM163.942 billion was collected from GST.