The decision to grant Chinese contractors of the East Coast Railway Link (ECRL) GST relief was made in the interests of Malaysians, Customs Department director-general T Subromaniam said.

He dismissed the contradicting claims as fake news, and questioned if certain quarters were deliberately attempting to confuse the people on this issue.

“I want to stress that people should not spread fake news about this tax relief given to the ECRL (construction) company.

“We have to remember the rakyat are the ones who will benefit from this, not a company from China. That's why we need to understand the mechanism of GST.

“However, when I look at social media, I am unsure if people understand the issue of tax or if they are trying to confuse the rakyat on purpose," Subromaniam said. 

“(Because if we don’t exempt GST) then the cost of the project will increase, the government will need to borrow more money and this will add to the country's debts.

“Is this what these irresponsible people want?” he asked during a press conference in Putrajaya this afternoon.

Previously, bumiputera contractors had cried foul over the GST relief, accusing the caretaker government of favouritism towards foreign firms.

Meanwhile, Subromaniam further clarified that ECRL was owned by a Malaysian company, which benefited most from the relief.

“We must remember that the project belongs to Malaysia. The real owner of the project is Malaysia Rail Link Sdn Bhd, a company owned by a government investment firm.

“A Malaysian company benefits, not a Chinese company,” he added.

The matter was first revealed to the public by Amanah vice-president Husam Musa on Tuesday, when he uploaded documents pertaining to it online, including a certificate for GST relief, on which it was stated it was within the finance minister's powers to do so.

The government is financing the approximately RM60 billion ECRL through a soft loan from the Export-Import Bank of China and debt raised in the bond market.

About 600km in length, the ECRL will link up Port Klang with key cities on the east coast of Peninsular Malaysia, including Kuantan, Kota Bharu and Kuala Terengganu.