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Customs explains reason for not refunding Selangor local councils

SEPANG: The Customs Department today denied failure to pay back RM36 million in Good and Services (GST) refunds to 12 local councils in Selangor.
Its director-general Datuk T. Subromaniam said there were some 'issues' with the documentations that resulted in the department not refunding the councils.
"Yes it is true that the tax refunds were not paid.
"But the reason is because our investigations showed the statements submitted were 'suspicions'. These locals councils have been found to be making claims without basis," he said.
"There were some refunds claimed for items which were not claimable.
"For example, purchase of vehicles for local councils fall under 'block tax input' while donations and contributions to non-governmental organisations (NGO) of more than RM500 were not being accounted as output," he added.
Subromaniam added that the department has gotten in touch with some of the councils to rectify the matter, but has yet to receive any response.
"The department has the right to hold the refunds if the claims made turned out to be 'suspicious'.
"None of them responded, that was why we did not pay the tax refund," he said.
Subromaniam said Selangor was not the only state faced with the situation, other councils in other states too were faced similar predicament.
He urged the local councils concerned to contact the department as soon as possible to sort out the matter.
He said that under Section 88 of the Goods and Services Tax Act 2014, which covered penalties for incorrect returns, the person could be fined a maximum RM50,000, jailed a maximum three years, or both.
Balakong assemblyman Eddie Ng Tien Chee was reported to have claimed that the Customs Department had owed over RM36 million in GST tax refunds to 12 local councils in Selangor.
The local councils were Shah Alam, Klang, Kajang, Ampang Jaya, Selayang, Petaling Jaya, Subang, Sepang, Hulu Selangor, Kuala Langat, Sabak Bernam and Kuala Selangor.

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