Gov't scraps new GST plan, less than a day after outcry

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The Royal Malaysian Customs Department has scrapped plans to subject 60 new food items to the 6 percent goods and services tax from July 1 onwards.

According to the department's statement today, the items were removed from the Goods and Services Tax (Zero-Rated Supply) Order 2014, which was gazetted on June 6.

Customs director-general T Subromaniam said feedback was sought from the finance ministry following media reports on the gazetting of the Order and a decision was made scrap the implementation of the Order.

He said the Order would have removed catfish, swordfish, corn, frozen vegetables, figs, margarine and imported fruits such as avocado, apricot, grapes, cherry, peach, and plums, among others, from being "zero-rated" items and hence not subject to GST.

Several newspapers today reported about the Order, setting social media on a frenzy with condemnations against the tax and the federal government. 

PKR vice-president Rafizi Ramli warned that had the 60 food items be subject to GST, the lower-income group would be the most affected and would result in great public anger towards Putrajaya.

Attempts to expand the items covered by GST comes at a time when Putrajaya is finding it hard to justify a new tax on hotels, which would see consumers paying up to RM20 more a night for a room.

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