A Personal Finance Blog for Malaysian: GST on Bank Charges, how to round?

Saturday, April 4, 2015

GST on Bank Charges, how to round?

Bank charges RM0.10 for online inter-bank transfer.

After 1.4.2015, Bank charges is RM0.10 + 6% = RM0.11 (we can't have RM0.106 in the computer system, so rounded up to nearest sen)

Does it mean it is to be rounded down to RM0.10 again? (remember the Rounding Mechanism introduced by BNM in year 2008 when it was too costly to have new 1 sen in circulation?)

Bank Negara's guide on the rounding mechanism extract for easy reference.

Basically, it applies to all "over-the-counter" transactions thus for billing not "over-the-counter", therefore, no rounding is required.

Over-the-counter means retails or cash transaction, for me.

The table below illustrates how the Rounding Mechanism works:
Bill ends in sen
Round off to the nearest 5 sen
Total Amount of A Bill
Total amount before rounding (RM)
Total amount after rounding (RM)
1,2
Down
82.01
82.02
82.00
3,4
Up
82.03
82.04
82.05
6,7
Down
82.06
82.07
82.05
8,9
Up
82.08
82.09
82.10

General guidelines of rounding
1.      The total amount of a bill (including goods and services subject to tax) that ends in 1, 2, 6 and 7 sen to be rounded downwards and 3, 4, 8 and 9 sen to be rounded upwards to the nearest multiple of 5 sen.
2.      Applicable to all over-the-counter payments, be it cash or non-cash. 
3.      The Rounding Mechanism table must be clearly displayed at the point of sale to ensure customers are appropriately informed.
4.      Receipts / bills / invoices should feature the total amount before and after the rounding adjustment.
5.      The 1 sen coin shall continue to be legal tender. 
Information/enquiries
More information can be obtained at Kementerian Perdagangan Dalam Negeri dan Hal Ehwal Pengguna's (KPDNHEP) website www.kpdnhep.gov.my or Bank Negara Malaysia's website (www.bnm.gov.my) and via their respective hotlines at 1-800-886-800 and 1-300-88-5465.

Enquiries can also be emailed to 1sen@bnm.gov.my.

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