KUALA LUMPUR, Jan 13 – The RM50 charged yearly for credit card, plus the RM25 for supplementary cards, will be scrapped from April 1 when the Goods and Services Tax (GST) takes effect. Alliance Bank Malaysia Bhd said on its website that with this fee (introduced in 2010) being abolished, 6% GST will instead apply on credit card annual fees – which can range RM70 annually to over RM1,000, depending on the type of card.

“GST will not be charged on annual fees that have already been subject to the RM50 credit card service tax paid prior to April 1, 2015. GST will only be applied upon the due date of the next annual fee.” The bank also said there is no GST charged if the annual fee is waived – as in the instance of free-for-life credit cards or those which stipulate minimum spend or transactions on a monthly or yearly basis. To reflect the changes, the GST charged by the bank will be reflected as a separate line item in the credit card statement.

“However, purchases will be reflected as a total amount inclusive of GST.” Alliance Bank assured that if there’s a dispute over a transaction, which is later is considered valid upon investigation by the bank, the full dispute amount will be refunded – including the GST charged by the merchant. The bank also confirmed that loyalty points or cash rebates will be given on the 6% GST paid when using the credit card for retail purchases.

Businesses News

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