A local company that imports and distributes dates is seeking an order from the High Court in Kuala Lumpur, against the Finance Ministry and the Royal Customs and Excise Department, that basic products and services are exempted from the goods and services tax (GST).

In what is seen as the first case against GST, Asia Kitchen Industries Sdn Bhd in its suit is also seeking an order that the list of fruits and vegetables in the GST schedule be amended, as dried dates should be exempted from GST.

The company is also seeking an order that dried dates are ‘makanan sunnah’ (food that is consumed by Prophet Muhammad) and is for Muslims in the month of Ramadan and should therefore be exempted from GST.

The suit was filed on June 17, through the firm of Messrs A B Sidek & Co, and the matter was due for its case management today.

However, the government representative did not record or enter an appearance today, resulting in High Court deputy registrar M Pavani fixing Aug 3 for case management.

The lawyer for Asia Kitchen Industries, Abu Backer Sidek, said they would seek a judgment in default if the Finance Ministry and Customs Department representatives do not enter an appearance on that day.

He told reporters that his law firm is gathering feedback from the people on what other items should be exempted from GST and make it a class action.

Abu Backer (photo) said he is not against the implementation of GST but wanted it to be implemented transparently.

“In the dried dates issue, the fruit is dried through the natural process and did not involve any conventional means.

“We note that the mandarin orange is tax exempted, but GST is imposed on dried dates. I am not saying GST should be imposed on mandarin oranges but I feel that the dates should be exempted as well.

“If you look at the schedule given, GST is also imposed on basic items like the mint leaf, pandan and also banana leaf. While the government said GST would not be imposed on medicine, I understand that critical medicines for diabetes and heart ailment are GST-charged,” Abu Backer said.

All these, he said, are a burden on consumers, and the government is not being transparent on the matter. For the first year alone, the government’s GST collection came to RM27 billion and Abu Backer asked where this money had been channelled to.

“For this reason, we are willing to add other prayers in this action to include the grouses faced by the people. We are prepared to amend the statement of claim and give sufficient notice,” he said.

Those who want to join in the action by Asia Kitchen Industries can email to his firm at admin@absidek-law.com to provide their information, he added.

Much implications upon traders, consumers

In the company's statement of claim, it says GST had brought much implications upon traders and consumers in the country.

Before the GST was implemented, the defendants published a list of items that would be exempted from the GST so that the new tax would not affect the people much.

The defendants, the company claimed, promised that the Consumer Price Index would in fact see a reduction by 0.1 per cent, including for goods and services, restaurants and hotels, communications, transport, decorative items, maintenance and equipment, housing, water, electricity and gas; clothes and shoes, along with alcohol and tobacco, and that basic items would not be charged GST.

However, it added that the government broke its promise when it charged GST on those items.

As a result, the Consumer Price Index, as shown by the Statistics Department, had risen by 3.5 percent in January this year, following the implementation of GST on April 1 last year.

The company added that items like housing, water, electricity, gas, transport and other goods and services, which were earlier promised would see a reduction in prices, had in fact seen an increase.

As the company is involved in the process of importing and distributing dried dates from Saudi Arabia, it is severely affected as it is also charged the six percent GST.

Asia Kitchen Industries further stated that there is no difference between dried and fresh dates as the process does not increase its value. Dried dates do not go through the conventional drying process but a natural process where it is harvested when ripe and dried before it is cultivated and processed for sales.

The company said it had written to the Customs Department to send a representative to visit a date farm and factory in Medina with it, and that it had also explained the matter to the department.

However, the Customs Department, in its reply dated April 13 this year, said the decision on GST is made by the Finance Ministry. The company appealed the decision and asked the government to change its policy, but this was verbally rejected by the department.

Following this, Asia Kitchen Industries said, it was forced to file this court action.