It beats me how P Gunasegaram wrote his comments 'Is Guan Eng lying about RM18 million ‘robbery’?' without carefully reading the Goods and Services Tax Act 2014 (the GST Act).
Gunasegaram called the GST “an incremental tax”. I do not pretend to know the mumbo jumbo of the GST. But what I do know is that the GST was implemented and enforced pursuant to the law. And the law was - the law having been repealed by Parliament - the GST Act.
Gunasegaram then explained that “as a matter of procedure, the GST collected first went into the government’s consolidated revenue account and the amounts were transferred from there to the GST trust fund account monthly.”
I say Gunasegaram should have read the GST Act, and read it together with the Financial Procedure Act 1957 (FPA).
The government’s consolidated revenue account which Gunasegaram referred to is in fact one of three accounts in the Federal Consolidated Fund (Consolidated Fund) established under the FPA. The Consolidated Revenue Account is the account in which shall be kept all moneys other than moneys received by way of loan by the government (which are to be kept under the Consolidated Loan Account) and moneys received subject to a trust (which are to be kept under the Consolidated Trust Account).
Now, what Gunasegaram should know is that section of 54(1) of the GST Act provided for the establishment of a fund known as the Fund for Goods and Services Tax Refund (“the Fund”) which should be specified in and incorporated into the Second Schedule to the FPA. By this, it means that the Fund was a trust fund under the FPA.
This shows that within the scheme of the GST Act, GST collections were to be treated first as trust moneys. It was into the Fund that GST collections under the GST Act should be paid. And it was from the Fund should any refund under the GST Act be made.
However, the finance minister might authorise the payment into the Consolidated Revenue Account of all or part of the moneys of the Fund.
Simply put, if GST collections were paid into the Consolidated Revenue Account, it would only have been possible if they were authorised by the finance minister under section 54(5) of the GST Act.
Thus, it is incorrect for Gunasegaram to say that as a matter of procedure, the GST collected first went into the government’s consolidated revenue account.
By law, the GST collections should first go into the Fund unless the finance minister authorised the payment into the Consolidated Revenue Account.
It is now for Najib Razak as the finance minister when the GST was in force to explain why the GST collections were authorised to be paid into the Consolidated Revenue Account in the Federal Consolidated Fund.