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NOTICE OF GST & FREQUENTLY ASKED QUESTIONS

Please be informed that the Goods and Services Tax (“GST”) will be implemented by the Government of Malaysia with effect from 1 April 2015 at a rate of six (6) per centum. 

AIG Malaysia Insurance Berhad (“AIG Malaysia”) reserves the right to collect from you an amount equivalent to the GST payable on the applicable premium for the policy period, or in the event that the policy period commences before but expires after 1 April 2015, to collect from you an amount equivalent to the GST payable on the applicable premium calculated from 1 April 2015 on a pro-rated basis. 

Your obligation to pay GST shall form part of the Terms and Conditions in your insurance policy. 

This FAQ should only be used as a guide and does not constitute tax advice. You should seek independent professional tax advice on any taxation matters. However, we are committed to providing you with general information that will assist your understanding of GST and its impact on you as AIGMalaysia’s valued customer.

Generally, all of our general insurance policies (e.g. motor insurance, personal accident, medical, house cover, etc.) will be subject to GST. In the case of travel insurance, GST will apply for travel insurance policies which involve domestic trips (this includes travel between East Malaysia and West Malaysia). GST will not apply for travel insurance policies which involve international journeys as such policies qualify for zero rating. 

Once GST has been implemented on 1 April 2015, unless we indicate otherwise, premiums quoted to you will be inclusive of GST for all standard rated policies.

If you refuse to pay any GST due on the policy, we reserve the right to void any coverage offered within the policy’s cooling off or warranty period. 

No. Cash payment by AIG Malaysia in respect of an insurance claim does not represent a supply by AIG Malaysia and does not represent consideration for a supply made by you. As such, indemnity payments or settlements are not subject to GST.

However, if there are any indemnity payments or settlements in relation to reimbursement of expenses for a Tax Invoice and you are entitled to claim Input Tax Credit (ITC), you are required to inform AIG Malaysia so and AIG Malaysia will reduce the settlement amount by the ITC that you are able to recover. 

The Royal Malaysian Customs Department (“RMCD”) has only offered relief from GST for motor vehicle insurance policies or fire insurance policies that:- 

i)   were supplied before 1 April 2015; 
ii)  covers a period which commences before, but expires after, 1 April 2015; 
iii) premium was charged and paid in full or in part before 1 April 2015; and 
iv) are currently not subject to service tax. 

You will be charged GST on premium for all other standard rated policies unless the premium has already been charged with service tax. 

How far in advance you may renew your policies will depend on the terms of the relevant policy. GST is mandatory by law from 1 April 2015 and it is not possible to avoid GST through early renewal. 

No, the RMCD requires a tax invoice to be issued for each individual policy. 

If you are unsure as to your entitlement to claim Input Tax Credit from RMCD, we advise that you contact RMCD directly in respect of such queries. 

(a)    GST Website: www.gst.customs.gov.my
(b)    GST Tel: 03-88822111 
(c)    Customs Call Centre 
            Tel: 03-78067200 / 1-300-888-500 
            Fax: 03-78067599 
            E-mail: ccc@customs.gov.my

Once due, the compulsory 6% GST will be automatically deducted from your bank account in addition to the monthly premium. However, this may not be applicable for all banks. 

To avoid cancellation of your policy, you are encouraged to contact your bank to ensure that 6% GST is remitted to us. 

If you are not agreeable to the deduction of 6% GST and would like to understand more, please contact us immediately. 

Disclaimer

The information contained in FAQ is for general guidance only. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this FAQ. Accordingly, the information on this FAQ is provided with the understanding that the authors are not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Before making any decision or taking any action, you should consult a relevant professional. 

While we have made every attempt to ensure that the information contained in this FAQ has been obtained from reliable sources, we are not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this FAQ is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will AIG Malaysia, its related partnerships or corporations, or the partners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this FAQ or for any consequential, special or similar damages, even if advised of the possibility of such damages. 

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