Of GST and Service Charge

Is there anyone of you who are accounting experts, or someone who is well versed with how Malaysian GST works? Malaysian GST only I mean, I don’t care about other countries’ GST here…

I need someone to enlighten me here, because I’m freakin’ confused. Here, take a look at this receipt that I got from a certain meal over the weekend. I actually just noticed this situation about 10 minutes ago…

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Can anyone tell me what does SR mean? Because the way I see it, this piece of receipt doesn’t seem right to me. In fact, it looks like a blatant cheating of money. But… surely not? I think I am just seeing things wrongly, or missing some facts…

The receipt tells me that I am being charged for Service Charge at 10%. That’s the norm for restaurants in Malaysia, nothing strange about that.

The receipt also tells me that the item prices are inclusive of GST at 6%. I know some restaurants factor in GST into their retail prices instead of itemizing it, nothing strange about that as well.

The thing is, if I comprehend this piece of receipt correctly, since the item price is inclusive of the 6% GST, this means the actual price for my food is RM 17.92, with the balance of RM 1.08 being GST. So… shouldn’t my Service Charge be based on RM 17.92 instead of RM 19?

Why the hell am I paying Service Charge for a government tax? What service was rendered to me? Service of collecting my money to put into someone else‘s pockets? I didn’t ask for that! That’s not service rendered to me, that’s service rendered to that someone else! Go and collect Service Charge from that someone else instead!

As it is, I think I am being overcharged by RM 0.11 (11 cents) in this transaction. Hardly a big amount here, no big deal. But it got me thinking, most restaurants that do decent business will rake in tens of thousands (if not hundreds of thousands) of ringgit in terms of revenue daily. And I think there should be a good number of restaurants in Malaysia that print receipts that look like this one.

If I am to put a a random figure of, say, if a restaurant does RM 50 000 of sales a day, RM 2830.19 of it is GST. If the restaurant charges 10% Service Charge for that, that’s RM 283 per day. Over RM 8000 per month.

Does this 8k go to someone else‘s coffers as well? Or does this 8k go to the restaurant’s coffers?

Darn… If no one can correct me, if what I conclude is correct, then… Ma Puki!!! Tiu nia sing!!! KNNBCJB!!!!

22 Comments

  1. That is really pening! Most times I don’t see bills, now after your case, confirmed I wont see the below part that mentions GST… I might end up more stressed up than you! Really depressing to know that we just have to fork out extra for no reason!

    • Haih… don’t see cannot leh. Sometimes they make mistakes… like charge you for items that you never buy… then even worse. 🙁

  2. It’s crazy isn’t it that service charge is subject to GST. We are being screwed 2X. This GST thing has caused a lot of misery to those working in the accounts department.

  3. Yes, I was aware that service charge is also subjected to GST before all this shit began! Some of the receipts are quite confusing especially those where the prices are already inclusive of GST. They should just show the prices of the food as it is and show the 10% service charge and 6% GST amounts separately…very clear cut that way and those are the receipts I like.

    But there are those receipts where the total you pay are already inclusive of service charge and GST…and these are the confusing ones. They do show you the service charge and GST amounts but however you try to decipher and calculate, you can’t arrive at those figures (some of them anyway). Example, I got a food bill once of RM94 which says it’s inclusive of service charge of RM6.52 and GST of RM5.32…go figure! I just learned to accept the amount on the receipt as the amount I have to pay! 🙁

    • The GST is correct, but I don’t know how that service charge figure is derived. If follow my calculations, then it would be 7.35% service charge. Who charges it like that? @.@

      I agree with you. They should just itemize everything to avoid confusion. Should standardize receipt reporting!

  4. there’s a whole lot of confusions and uncertainties and myths about this GST thing as it is not well planned but implemented in a hurry.. I’m also seeking answers for your doubts there, all I can tell you is that SR stands for standard-rated which is 6%, ZR stands for zero-rated, and there’s another category which is exempted..

    • Oh, so SR is Standard Rate. So if an item has SR attached to it, means it is taxable… As to our doubts, Mun has explained in her comments..

  5. No, they didn’t overcharge u…so hold back ur cursings…Mun’s calculation is correct. In fact restaurant services are subjected to GST. The ‘service’ charges = 10% of food price (17.92) + 6%GST = 0.10752
    The way they put it in the receipt really misled people into thinking that they charged the services based on (food+GST)…Anyway, it is going to be almost a year GST being implemented…we all feel the ‘pain’ when dining out.

  6. Oh no, your filthy mouth overtook mine and Thambee’s cursing in unison! Muahahahaha

    It took me a long while to digest the whole tax charges until Mun laid it out clearly. She must be a genius in figures and accounting. Now we have understood, we just need to be vary as many places charge with all inclusive and don’t breakdown the figures like that. Chill man chill.

    • I practice less restraint when I’m pissed off, that’s all…

      Yeah, I agree, she must be a genius in accounting. I was counting on this type of comments when I write this blog post. 😀

  7. They did not overcharge you. They have to pay 6% GST on top of the 10% service charge that they charge you so it works out to be the same. Yes, we have to pay the 6% GST for the 10% service charge that we were charged. That 6% GST (0.11) is to be paid to the govt so they don’t get to keep it.

    Your food without GST is as you have calculated: 17.92
    so 10% service charge for your food is: 10/100 x 17.92 = 1.792
    6% GST for your food is: 6/100 x 17.92 = 1.0752
    6% GST for the 10% service charge is: 6/100 x 1.792 = 0.10752

    All adds up to : 17.92+1.792+1.0752+0.10752 = 20.89 = 20.90

    Ok?

    • It took some mental gymnastic to see through the formulas, but I think I got it. It all sums up nicely in 1 sentence. The 10% Service Charge is also subject to a 6% GST.

      WTF is that?! I thought the ministers said Service Charge is a form of tipping, and it is used to supplement the restaurant staff’s income. Why are they charging GST on people’s income??? Damn I fucking hate that someone else now!!!

      • Yes, you got it right in your summary. But I have seen some receipts that did not charge 6% GST on their service charges so I don’t know how they are going to report their sum to the govt.

    • Well, RM 19 is inclusive of the 6% GST, so 19 = 106% of actual price. So we take 19 divide by 106 and then multiply by 100, and we get 17.92…

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