Malaysians confused over whether GST replaces service charge

Kuala Lumpur

MALAYSIA's hospitality industry has been thrown into disarray over whether consumers should continue to pay a long-standing 10 per cent service charge, with the 6 per cent Goods and Services Tax (GST) having kicked in on April 1.

Adding to the confusion is the decision by the Ministry of Domestic Trade and Consumer Affairs last week to let hotels and restaurants impose the service charge only if a collective agreement has been signed between employer and employee.

Business groups such as the Malaysian Employers Federation have described the move as "incongr…