Compiled Questions on GST by Gamers

Written by Kyo on

Does old stock get affected by GST?
Games that were bought before the GST implementation, and sold after the implementation, by logic, would have to be charged GST. The only savior is that the sellers who didn't register for the GSTcollection won't have to charge you that. Those who did register, will have to charge the cost price plus profit, and then the 6%.

Old games that were bought after GST would already be charged from my understanding. However, this is still a messy thing because if I am a registered GST seller and I bought it from my supplier, how possible is it for me to claim the input tax?

Anyways to avoid paying for GST for games?
If you're a seller and you want to avoid all of that altogether, consider moving to Langkawi or Labuan and have your games posted there by game exporters around the world. For sure you won't get charged by the relevant authorities.

Kyo, would you start selling at Labuan / Langkawi?
Like hell I am. I love KL. :P

Older games that were released before GST, do they get taxed if I buy after GST?
If the seller is a registered GST collector, then yes, it is taxed. If not, then no. The price should remain the same.

On a seller level, those older stocks will get GST in them if bought after implementation. It's ok enough to say that all the distributors and wholesalers are all registered GST collectors.

What about digital goods?
Logically, all goods that are sold in this country (except those are exempted/not in the list of no need to charge GST) will be charged with the 6% GST. This will affect digital codes like Nintendo Cash Codes, PSN Cash Codes and Membership, and so on.

What about buying from PSN or STEAM?
If you buy directly from PSN or Steam, then this is another story altogether. I believe that PSN will start charging taxes to Malaysians if you're buying from the PSN Malaysia store using your local credit card. But, you may be able to avoid this if you're buying using the SG or HK store. Yes, I am aware that the importing of goods would still get you charged with GST. However, since there has been no test conducted so far, we can't say for sure how it will appear.

Steam on the other hand is even more odd. Supposingly, I have never seen any registered Steam company in Malaysia, even if they are already successful in charging us in RM. So for this, I can't vouch to seeing if they will charge or not.

Bonus: Kyo, why don't you register for GST?
A few people have actually approached me after the article asking me why don't I register? Part of the reason is because I'm keeping a promise for this year in not to collect any from anyone at all. Besides, there are some benefits to it at the moment.

The issue stems from how the calculation was spread out between Scenario A and Scenario B in the previous post. At the end of the day, the customer ends up getting the worst end of things. But should I register for GST, the calculation for Scenario A would be modified to as per below:

RM120 (Cost of game) + RM12.80 (Profit that Kyo asks for): RM 132.80 X 6% = RM140.76 (Final price charged to consumer for this Modified Scenario A situation)

I'm sure you would notice that the situation is not that different and the extra incurring tax is the 76 cents extra that consumers now have to pay. This is what you see. But, here's another perspective:

Original Scenario A Final Price: RM 140. Kyo earns RM 12.80 for profit while Kyo pays the RM 7.20 for tax.

Modified Scenario A Final Price: RM140.76. Kyo earns RM 12.80 PLUS Kyo transfers the tax to consumer at RM 7.96. While consumer pays that RM 7.96, Kyo is then able to claim the previous tax from the original Scenario A at RM 7.20. (The 76 cents Kyo has to pay for tax as that is the 6% of the profit that Kyo is charging to people)

The calculation also applies to Scenario B where the final tax is transferred to the consumer, while the 6% charged is on the profit I made.

To simplify things,
If I don't register for GST, I pay for the tax on your behalf (and it stops there, extra cost for me).
If I register for GST, you are paying the taxes AND you have to pay the tax on behalf of my profit. So, extra cost for you.

So, I think it's best to show you the two scenarios in my perspective. While the ultimate end scenario is true (all prices go up), the background behind it is worth to note. I will make one promise though for 2016 (which I have to consider based on feedback from everyone on registering for GST). If I have to charge GST beginning 2016, I will want to ensure that i adopt a priced-in method for everyone. Meaning that the GST will be priced into the profit. (so, likely, I only get 94% of the profit that I fix on you. Honestly, that's fine with me.)

Don't worry, I am keeping my promise for 2015. I already said it last year and I will keep that still this year. And don't worry about me, I'll be fine. :)

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