UPDATE: Story has been revised from the initial source report, which contained errors, to denote that SST exemption will only be for locally-assembled CKD vehicles packs, an exemption that has always been in place even with the old system.

Earlier today, Malaysiakini reported that car prices were set to remain, based on a list released by customs department director-general Datuk Seri Subromaniam Tholasy, which revealed that passenger motor vehicles are among the items that will be exempted from the sales and services tax (SST).

We have since learnt that the the proposed exemption list released today does not mean that there will be no SST being imposed on cars at point of sale. The exemption with regards to motor vehicles only applies to CKD packs – for sedans, four-wheel drives, station wagons and racing cars – and not the final assembled vehicles, so SST will still be factored into pricing when the time comes.

This being the case, car prices – which were revised as of June 1 following the zero-rating of the goods and services tax (GST) – are now expected to increase as of September 1 when SST makes its official return.

Finance minister Lim Guan Eng has said that there will be two different rates of 5% and 10% for sales tax, which is applicable to selected manufactured and imported products. Details will be announced when the new SST Bill is tabled in parliament next month.

The customs department has issued a statement to clarify the whole matter.