16 May 2015
FREQUENTLY ASKED QUESTION (FAQ) ON ANTI-PROFITEERING
A.
DEFINITION
1.
2.
What does “profiteering” means?
Making unreasonably high profit.
Does the act of increasing the price by the traders is
significantly profiteering?
Not necessarily, because the offence of profiteering takes place
when there is an increment on the the net profit margin of the
B.
goods and services offered in comparison to the base date.
ANTI-PROFITEERING MECHANISM
3.
What regulations specify
the mechanism to determine
whether a trader profiteers or otherwise?
Price Control and Anti-Profiteering (Mechanism To Determine
4.
Unreasonably High Profit)(Net Profit Margin) Regulations 2014.
What is the mechanism used in the Price Control and AntiProfiteering (Mechanism To Determine Unreasonably High
Profit)(Net Profit Margin) Regulations 2014 to determine the
Profiteering Offence?
The mechanism used is to ensure that all traders maintain the net
profit margin for a certain period as prescribed by the regulations.
1
16 May 2015
5.
How long does the traders needs to maintain the Net profit
margin?
18 months from 2 January 2015 until 30 June 2016.
6.
How does profiteering happens and is there any formula to
determine the net profit margin?
Profiteering occurs when the current net profit margin within 2nd
January 2015 until 30th June 2016 (X1) exceeds the base Net profit
margin (X0) on 1st January 2015 or any other dates according to
the circumstances as prescribed under the Price Control and
Anti-Profiteering (Mechanism to Determine Unreasonably High
7.
Profit)(Net Profit Margin) Regulations 2014.
Why 1st January 2015 is used as the Base price for
comparison?
This date is exactly 3 months before the implementation of GST on
1st April 2015. Profits on that particular date supposedly to be
8.
stable until 1st April 2015.
What are the elements used in Net Profit Margin Calculations?
Net profit margin on Goods and services are based on the sales
price, costs of goods or services, operational costs, input tax, output
tax, special refund of sales tax as explained and enforced in the
Price Control and Anti-Profiteering (Mechanism to Determine
Unreasonably High Profit)(Net Profit Margin) Regulations 2014.
2
16 May 2015
9.
Does an increase of one sen in Net profit margin is considered
as profiteering?
Yes. As prescribed under the Price Control and Anti-Profiteering
(Mechanism to Determine Unreasonably High Profit)(Net Profit
Margin) Regulations 2014, it is profiteering as long as the net profit
margin after 1st April 2015 exceeds the net profit margin on 1st
10.
January 2015.
What would be the base price used in the net profit margin
calculation if a trader conducts Sales?
The base price would be the previously offered price just before the
11.
Sales.
What would be the base price used if a trader offers to sell a
new product or goods,?
The base price would be the price the goods sold the very first time
in the market. In the event the traders sells the goods with
introductory price, than the base price would be the normal price
12.
of the goods after the introductory price.
What would be the base price if a new business operates after
1st April 2015?
In the event a new business starts operating only after 1st April
2015, the base price would be the first day when the business
starts operating.
3
16 May 2015
13.
Does profiteering occurs only at the retailer level?
No, it covers the whole supply chain which includes the importers,
manufacturers, wholesalers, distributers and retailers.
14.
Is MDTCC indirectly preventing the traders from raising the
price by controlling excessive profit?
Ultimately, MDTCC does not prevent the traders from raising the
price of goods with reasonable grounds. However, traders are
requested to offer more affordable and reasonable price to ease
consumers burden.
15.
If the cost of goods and services or operational costs increase,
are the traders allowed to increase the price of goods and
services offered?
Yes, they are allowed to do so but with condition that the price
increase is in accordance with the cost increase. However, the
current net proft margin should not exceed the base net profit
16.
margin.
Are the non registered GST traders being monitored on the
net profit margin
under
the Price Control and Anti-
Profiteering (Mechanism to Determine Unreasonably High
Profit)(Net Profit) Regulations 2014?
Yes, all business levels will be monitored under the regulations
disregarding whether they are registered or otherwise.
4
16 May 2015
17.
Is it an offence, if the traders includes the element of input tax
in price determination?
Yes, it is an offence under Section 10A of the Price Control and AntiProfiteering Act 2011. According to section 10A, any credits on
input tax against output tax must be excluded from price
C.
determination.
BUSINESS DOCUMENTS
18.
What is the duration to keep and maintain records relating to
business operations?
According to subsection 53A(2) Price Control and Anti-Profiterring
Act 2011, all business ralated records should be kept and preserve
for at least a minimum of seven (7) years from the last date
associated to that particular record.
19.
Is MDTCC authorized to take action against traders who do not
keep or maintain any records relating to business operations?
Yes, MDTCC is authorized to take action against them, as section
53A Price Control and Anti-Profiteering Act 2011 requires all
traders to keep and maintain records relating to business
operations.
20.
What is the penalty for individuals who fails to produce their
records relating to business operations?
Fine not exceeding RM50,000.00 or imprisonment not exceeding 2
years or both, for the first offence. For second or subsequent
5
16 May 2015
offence, a fine not exceeding RM100,000.00 or imprisonment not
exceeding 5 years or both. This is in accordance to the penalty
provided under paragraph 57(b) of the Price Control and AntiProfiteering Act 2011.
21.
What is the significance of Section 21 Notice in the Price
Control and Anti-Profiteering Act 2011?
The Notice under Section 21 of the Price Control and AntiProfiteering Act 2011 is a written notice to direct any individuals to
produce information, documents or evidences in any form within a
certain duration given by the Assistant Controller. This notice is
vital for any investigation of offences under the Act. Failure to
respond or reply to the Notice under Section 21 is an offence and
punishable under Section 57 of the same Act.
D. PRICE TAGGING
22.
Are there any relevant legislation associated to the needs of
protecting consumer?
Yes, the Consumer Protection Act 1999, the Price Control and AntiProfiteering Act 2011 and Control of Supplies Act 1961.
23.
What is the specific legislation on price marking to ensure
consumers are not misled?
Price Control (Indication of Price by Retailers) Order 1993
[P.U.(A)137/1993] under Price Control and Anti-Profiteering Act
6
16 May 2015
2011 specifies that every item displayed for sale is required to have
24.
price tag.
Is it necessary to have price tag inclusive of the Goods and
Services Tax (GST) on 1st April 2015?
On 1st April 2015, price tag displayed should be inclusive of the
GST. However, retailers are given 14 days of grace period (starting
from 1-14th April 2015) for the purpose adjusting the pre and post
GST price tag/ indication.
E.
ROLE & RESPONSIBILITY
26.
What is MDTCC’s role in GST implementation?
MDTCC’s role is to ensure that traders do not manipulate the price
and make unresonably high profit by taking advantage of the GST
implementation.
27.
What does it mean by ’OPS CATUT’?
OPS CATUT is an operations to ensure that traders complies with
the Price Control and Anti-Profiteering Act 2011 on reasonable
profit making.
28.
Is MDTCC monitoring all level of business distribution
network/supply chain?
Yes.
7
16 May 2015
29.
What are the actions taken by the MDTCC enforcement team to
ensure that traders do not make any unreasonable high profit
after 1st April 2015?
The MDTCC Enforcement team will intensify their enforcement by
monitoring, conducting operations and taking actions against those
30.
who are found to be at fault.
What happens after the expiry of the 18 months period of
maintaining the net profit margin? What if the price increases
after that?
31.
The Government will review once the period expires.
Traders often uses GST as a reason to increase the price of
goods and services. What is MDTCC’s role in addressing this
issue?
If the traders increase the price without any reasonable
justification and takes advantage of the GST implementation,
MDTCC will take firm action under the Price Control and Anti-
32.
profiteering Act 2011.
What is the basis for an enforcement action under OPS CATUT?
The basis would be the price increase on goods of the same
description from the base date where the net profit margin is
determined.
8
16 May 2015
33.
What advocacy actions have been taken to ensure the Price
Control and Anti-profiteering Act 2011 is complied during the
GST implementation?
Various advocacy programs have been conducted for consumers
and traders where information in relation to Price Control and
34.
Anti-profiteering Act 2011 has been disseminated.
What is the role of the traders in determining prices for goods
or charges under the Price Control and Anti-profiteering Act
2011?
In determining prices for goods and charges for services, the
traders need to ensure that the prices offered does not include any
35.
claimable tax element.
By having the enforcement action from MDTCC, will the prices
of goods reduce?
MDTCC’s enforcement is one of the measures taken to ensure that
traders do not profiteer. However, there is no guarantee that prices
F.
will be reduced as price of a good is determined by various factors.
COMPLAINTS CHANNEL & PRICE CHECKER
36.
How do consumers make complaints on unreasonable price
increase?
Any complaints can be directed to the Call Center 1-800-886-800 or
through the eAduan system at http://e-aduan.kpdnkk.gov.my.
9
16 May 2015
Alternatively, complaints could also be made at the nearest MDTCC
37.
offices in every state and branches.
What evidence is required to lodge a report?
Consumers are required to submit any proof of purchase such as
38.
receipt or any other relevant documents.
Can a complaint made orally or without any proof of purchase?
Documents are needed as proof/evidence for any investigation.
Nevertheless, complaints made orally will also be investigated and
39.
actions will be taken accordingly .
What kind of facilities are provided to the public by MDTCC?
MDTCC provides a mobile application (Mobile Apps) known as
MyKiraGST. This application allows users to check the prices of
goods according to the area. If the prices exceeds the maximum
price, complaints can be made online. MyKiraGST can be accessed
40.
via http://mykiragst.kpdnkk.gov.my.
How can consumers obtain information on the prices of goods
and services?
Consumers can obtain those information especially on price of
goods, services through many sources, such as the Consumer Price
Guidelines which can be downloaded from the MDTCC Portal.
___________________________________________________________________________________
10
16 May 2015
MAIN PROVISION OF THE PRICE CONTROL AND
ANTI- PROFITEERING ACT 2011
PART II
DETERMINATION OF PRICES AND CHARGES
Prices or charges imposed not to include certain items.
10A. (1) Any person who supplies or offers to supply any goods or services
shall not include the items as specified in the Schedule as part of the price of
the goods or charge for the services.
(2) Any person who fails to comply with subsection (1) commits an
offence and shall, on conviction, be liable—
(a)
(b)
where such person is a body corporate, to a fine not
exceeding five hundred thousand ringgit and, for a second
or subsequent offence, to a fine not exceeding one million
ringgit; or
where such person is not a body corporate, to a fine not
exceeding one hundred thousand ringgit or to imprisonment
for a term not exceeding three years or to both and, for a
second or subsequent offence, to a fine not exceeding two
hundred and fifty thousand ringgit or to imprisonment for a
term not exceeding five years or to both.
11
16 May 2015
PART IV
ANTI-PROFITEERING
Mechanism to determine unreasonably high profit
15. (1) The Minister shall prescribe the mechanism to determine that profit
is unreasonably high and different types of mechanism may be prescribed to
cater for different conditions and circumstances as the Minister deems fit.
(1A) The mechanism to determine that profit is unreasonably high
referred to in subsection (1) includes the Minister determining a certain
period during which there shall be no increase in the net profit margin of any
goods or services.
(2) In formulating the mechanism under subsection (1), the Minister
may take into consideration the following matters:
(a) any tax imposition;
(b) the supplier’s cost;
(ba) any cost incurred in the course or furtherance of business;
(c) supply and demand conditions;
(d) the conditions and circumstances of geographical or product
market; or
(e) any other relevant matters in relation to the prices of goods or
charges for services.
12
16 May 2015
PART VIII
GENERAL
Duty to keep records.
53A. (1) Any person who supplies or offers to supply any goods or services
shall keep and maintain proper records relating to the business operation
including the following records:
(2)
(a) sales records including receipts and sales books;
(b) purchases records including invoices from suppliers;
(c) expenses records including payment records, invoices and
particulars of acquisitions;
(d) documents relating to the determination of pricing for the goods or
services;
(e) records of remunerations, allowances or wages; and
(f) tax records and any related documents, if any.
The records under subsection (1) shall be—
(a) preserved for a period of seven years from the latest date to which
the record relates;
(b) available at all times for examination by the Assistant Controller;
and
(c) kept up to date and in good order and condition.
(3) Any person who fails to comply with subsection (1) or (2) commits an
offence.
13
16 May 2015
PENALTY FOR OFFENCES
PART V
PENALTY
Penalty
18. Any person who commits any offence under Part III or Part IV shall, on
conviction, be liable—
(a)
(b)
where such person is a body corporate, to a fine not exceeding five
hundred thousand ringgit and, for a second or subsequent offence,
to a fine not exceeding one million ringgit; or
where such person is not a body corporate, to a fine not exceeding
one hundred thousand ringgit or to imprisonment for a term not
exceeding three years or to both and, for a second or subsequent
offence, to a fine not exceeding two hundred and fifty thousand
ringgit or to imprisonment for a term not exceeding five years or to
both.
General penalty
57. Any person guilty of an offence under this Act for which no penalty is
expressly provided shall, on conviction, be liable—
(a) if such person is a body corporate, to a fine not exceeding one
hundred thousand ringgit, and for a second or subsequent offence,
to a fine not exceeding two hundred and fifty thousand ringgit; or
(b) if such person is not a body corporate, to a fine not exceeding fifty
thousand ringgit or to imprisonment for a term not exceeding two
years or to both, and for a second or subsequent offence, to a fine
14
16 May 2015
not exceeding one hundred thousand ringgit or to imprisonment
for a term not exceeding five years or to both.
15