Most people are aware of the goods and services tax (GST), which is a levy imposed by the government on items in malls and supermarkets. This neighbourhood coffeeshop began to charge its customers GST recently, much to the shock and anger of the resident customers there as they were made to pay more than they were used to.
A coffeeshop charging customers GST is a rare practice, regulars said. However, this branch of the Rasa Rasa Food Fiesta company, which runs several chain coffeeshops, is not the first to charge the 7 per cent GST.
"Now a packet of chicken rice priced at $5 would cost me an extra 35 cents. I think this is unreasonable,"says a 25-year-old man who frequents the halal branch at BLK 160A Jalan Teck Whye.
"This is not some upscale restaurant, only a neighbourbood coffee shop. I don't understand why it needs to collect GST. Besides, the extra charge is rounded up to the higher value."
According to reporters, a cup of coffee priced at $1.10 at the branch now costs $1.20.
A 52-year-old retail manager by the name of Aida said she was annoyed as her expenses at the branch would be higher now.
"I'm considering switching to other coffee shops instead of patronising this one," Shin Min Daily News quoted her as saying.
Her husband was also upset, saying that the additional charge was outrageous as a plate of chicken rice, before GST, had already been expensive.
Head of the Rasa Rasa Food Fiesta company Steven Pang explained that he had to impose the tax as his chain is now a GST-registered business. All companies with annual turnovers exceeding $1 million must become GST-registered.
He also said another coffee shop of his in Woodlands has been charging GST for many years without drawing any dispute.
According to Hoon Thing Leong, chairman of the Kim San Leng food and beverage group, most of the coffee shops which fall within the GST ambit have chosen not to transfer the charge to customers so as to remain competitive.
"Each operator has its own way of doing business,'' said Mr Hoon.