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Used Car Dealers Allowed To Impose GST On Profit Margins Only

Chris Aaron March 18, 2015 18:04

Good news for buyers of used cars, because the government has now allowed for used car dealers to apply for the ‘margin scheme’ under the coming Goods and Service Tax (GST), which allows them to impose the GST only on the profit margin of a used vehicle.

Also known as a “relief for second-hand goods,” The Sun Daily recently quoted Deputy Minister of Finance, Datuk Chua Tee Yong, to say that the decision to allow used-car dealers to apply for the ‘margin scheme’ came after meetings between “Customs and industry associations.”

To give you a bit of an insight into the situation, here’s the Malaysian Automotive Institute’s (MAI) guide to how the coming GST will affect the pricing of locally-assembled and imported vehicles:

Local Cars: Open market value + Excise duty + GST (6%)

Imported Cars: Transaction value + Import duty + Excise duty + GST (6%)

Given the ‘margin scheme’ that’s now applicable to used cars in the industry, everything but a dealer’s profit margin will be exempt from GST in the purchase of a used car. 

About Chris Aaron

Chris finds equal pleasures in reviewing fast cars as much as the everyday workhorses. He maintains a passion for European makes, Formula 1, playing the electric guitar and spending endless hours on the PlayStation; first-person shooters and the Gran Turismo franchise remain favourites. He also finds it strange to have written this in the third person.


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