There is a possibility of GST lowering the cost since the input that is paid can be reclaimed. Whereas before were added on the expenses thereby increasing the cost of operating a business enterprise with compliance with GST, these costs may be lowered thereby reducing the operation costs. In the event that the business running costs have steadily reduced, there are two options that you can pursue namely.
It is a requirement that in the event that you’re running and operating costs have been reduced in the business, you need to adjust the prices of your commodities. If you do not adjust them in accordance to the law, you risk being prosecuted in a court of law and charged under the Price Control and Anti-Profiteering Act 2011.
Secondly, in the event that the running costs of the business have drastically been reduced and you do not adjust the prices of your goods and services downwards, your direct competitor may have complied and reduce their prices thereby pushing you out of the business because clients and customers will prefer the better lower deal.
GST impacts on business and company
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For those who are supplying products to large business that are GST compliant and registered, it is a voluntary but prudent act for them to seek for GST registration. This is because the big businesses you are supplying your commodities to will definitely start seeking for goods from those registered suppliers and distributors. As a result, you may end up being pushed out of the market.
Your business will have more benefits if you decide voluntarily. This is regardless of whether your business has annual revenue of over RM500, 000 or even less. For instance, if you get annual revenue that is RM300, 000, it is most likely that you a GST percentage of 6 on most of the commodities. If GST registered, you can reclaim this money that translates to RM18000 per year.
There are some severe penalties that are charged on non compliance with GST.
• Late Payment: 5% to 25% of GST may be payable.
• Incorrect returns upon conviction will lead to a RM 50,000 fine or 3 years imprisonment together with a penalty that’s equal to the amount of tax that was undercharged. Offence can also be compounded by you paying 50%.
• General Penalty when convicted ranges between RM 30,000 fine or 2 years imprisonment and a Compound of 50%.
• Directors are jointly and severally responsible for business compliance with GST.
It is a shameful act not to register your business with GST since all your friends, relatives, foes and competitors will read a message that your business is too small that you can’t get revenue that gets to the RM500, 000 limit. Consumer are fond of buying their products from big businesses since they tend to be convinced that they will not be overcharged.