2,900 medicines categorised zero-rated GST in Malaysia

File photo of medicine.
PHOTO: 2,900 medicines categorised zero-rated GST in Malaysia

KUALA LUMPUR - The Health Ministry has clarified that the 2,900 brands of essential medicine that will be exempted from the Goods and Services Tax are categorised as zero-rated GST.

These supplies comprised 320 chemical compounds that are subject to a zero rate.

"Health services per se are 'GST exempt' and the chemical compounds are zero-rated.

"Retailers or hospitals are eligible to claim back the GST (as output tax) but will not charge it to the consumer," Minister Datuk Seri Dr S. Subramaniam told a press conference after launching the organ donation street campaign, "One Pledge with A Million Hopes" here yesterday.

On the other hand, he added, another category of "GST exempted" products is where consumers are exempted but not the retailers or hospitals.

He added that this could lead to an increase in overall price to cover the GST paid, clarifying the announcement made by Datuk Seri Najib Tun Razak when he presented Budget 2015 on Friday.

The Prime Minister stated 2,900 essential medicines would be exempted from the GST but did not specify the category.

Association of Private Hospitals of Malaysia president Datuk Dr Jacob Thomas had also said the APHM wanted to know if the 2,900 brands of drugs would be zero-rated GST.

Dr Subramaniam said herbs were not in the essential zero-rated GST drug list and discussions were still being held with the Finance Ministry on whether medical devices would also be zero-rated.

"We are asking for most of them to be zero-rated. They are studying it and, in the near future, would decide which would be zero-rated," said Dr Subramaniam, commenting on an appeal by Association of Malaysian Medical Industries chairman Hitendra Joshi on Thursday for medical devices to be put in the same GST zero-rated category as pharmaceutical drugs because they save, improve and prolong lives.

Asked if he was satisfied with the health allocation, Dr Subramaniam said it would enable the ministry to operate "the normal things".

He said emphasis had been given to cancer treatment and haemodialysis, adding that his ministry hoped for a transformation in the health services under the 11th Malaysia Plan.

He said about half of the ministry's budget would go to paying the salaries of 260,000 employees.

On the organ donation campaign, Dr Subramaniam said 500 volunteers were involved in getting people to sign up as donors nationwide.