Alan successfully sold his house at Putrajaya through the service of Star Realty, a real estate agency. Upon confirmation of the sale and purchase and signing of agreement, Star Realty issued an invoice to Alan for agent commission together with the charge of 6% GST.
Alan questioned Star Realty on charging the 6% GST since the goods and services tax will only be implemented with effective from 1st April 2015.?
The GST imposed by Star Realty refers to the government service tax levied pursuant to the Service Tax Act 1975 instead of the goods and services tax. This service tax sometimes be confusingly referred in abbreviation of GST, which is more commonly referred to the goods and services tax worldwide. Service tax is the present consumption tax at the tax rate of 6% and it applies to certain items in the service industry including professional services provided by real estate agents.
In conjunction with implementation of goods and service tax, the service tax shall then be abolished with effective on 1st April 2015.
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