Photo of Bandar Utama

All About BANDAR UTAMA

Bandar Utama is an affluent residential township located within the Damansara subdivision of the Petaling district in the state of Selangor, Malaysia. It is a residential suburb and home to the popular 1 Utama Shopping Centre.

Demographics

History As of 2004 it is estimated that there are 59,040 people residing in Bandar Utama. The primary residents appear to be Chinese followed by Indian and Malay. However, there were nearby squatter settlements of illegal immigrants in the neighbouring Kayu Ara village which is enclosed by Bandar Utama and Damansara Utama. They have now mostly been relocated to nearby low-cost flats and their squatter houses demolished to make way for legal developments.

Until 1991, the Bandar Utama area was originally consisted of palm oil estates with a population fewer than 100 people. Development of Bandar Utama began in the early 1990s under the company named See Hoy Chan Holdings Sdn. Bhd., and an attempt to modernise the area was made, with the opening of Sri Pentas, TV3's broadcast centre which was opened in 1995 and officially opened in October 1996, as well as the 1 Utama Shopping Centre, which became increasingly well known after the Jaya Jusco chain of department stores shifted one of its outlets from nearby Taman Tun Dr Ismail, Kuala Lumpur to Bandar Utama in 1995.

With the opening of several new schools in 1997 and 1998, as well as the establishment of Kolej Bandar Utama, a tertiary institution, Bandar Utama continued to grow. In 2004, additional residential precincts of BU7, BU10 and BU6 (comprising 2½-storey houses) were completed. These are newer sections of Bandar Utama compared to the older sections, BU1 until BU4, which were completed in phases beginning from 1991 until 1996.

Geography

Bandar Utama is roughly 1000 acres (4 km²) in size, and is divided into 12 sections ranging from BU1 to BU12. These sections are served by roads, e.g. Jalan BU2/5 where "Jalan" is a Malay word meaning road, BU2 is the section and 5 is the road number. Houses on one side of the road are numbered evenly, and the other side are numbered oddly, so one side of a road will consist of houses 2, 4, 6, 8 and so forth while the opposite will have houses numbered 1, 3, 5, 7 and so on.

A bridge over the Sprint Expressway joins the two parts of Bandar Utama, sections BU1 until BU10 and BU11 with BU12, which are separated by the expressway.

To go to Bandar Utama, via the northbound route of New Klang Valley Expressway (NKVE), you should see the 1 Tech Park (formerly the Sony building) on your left, right after the toll plaza. Continue straight, all the way down until you see an intersection on your left leading to Damansara Jaya. Make a U-turn here and continue. Just before you see the toll booth again, go up the ramp on your left. At the traffic light you can opt to turn left to go to BU11/BU12 or to turn right to head to the BU1 until BU10.

If coming from the Damansara-Puchong Expressway (LDP), look out for Taman Tun Dr Ismail on your left. When you see the intersection leading to it on your left, turn right instead towards the 1 Utama shopping centre, and Bandar Utama. If coming from the opposite direction, look out for the pink facade of 1 Utama on your left and turn left at the appropriate intersection.

Places

Places of worship

Until today, there is no church in Bandar Utama. Most Charismatics opt for Grace Assembly which is located in Taman SEA (SEA Park) or Damansara Utama Methodist Church, which is in Seksyen 13. Roman Catholics tend to worship at the Church of St. Ignatius, near Kampung Cempaka (Cempaka Village) or Kristus Aman, located in Taman Tun Dr Ismail.

There is a surau (prayer hall) for Muslims at BU3, and the squatter village of Kayu Ara has a mosque.

Buddhists can join the Bandar Utama Buddhist Society, now operating from their new temple at No. 3, Jalan BU 3/1.

Education

There are 3 national primary schools, a Chinese primary school (Puay Chai 2) and a Tamil primary school. Also there are four secondary schools in Bandar Utama. The first primary school was opened near BU12 in 1998, but as of 2004 had begun to languish due to the opening of primary schools on the other side of Bandar Utama.

The first secondary school SMK Bandar Utama was also opened around the same time. The school has enjoyed an increase in media coverage particularly due to their performance in the annual The Star National Best School Newspaper Competition; in which the 2003 class of 4 Adil won runner-up. This includes a recent Student Exchange Programme held between Phuay Chai Secondary School, Singapore and SMK Bandar Utama which had gained the approval from the Ministry Of Education with the aim to foster stronger relations between the schools in its neighbouring countries. This programme had also been highlighted in stuff@school pullout of The Star newspaper.

In early 2007, the school beat SMK Bandar Utama Damansara (4) and SMK Damansara Jaya in the Tan Sri Datuk Wira Abdul Rahman Arshad cup; in the first and second rounds. Against SMK Damansara Jaya, the school's third speaker was named Best Speaker. The school's Drama Team landed third place at the Drama competition for the Damansara zone; with their comedy The Poser Dilemma.

There is a propensity for some parents to school their children outside Bandar Utama, particularly for those living on the BU11/BU12 side, who tend to send their children to the Tropicana primary or secondary schools in Sunway Damansara, or the highly reputed primary and secondary schools at Damansara Utama and Damansara Jaya.

There is also KBU International College (KBU), a private tertiary institution and LEA English Centre for language institution.

For early childhood development centre or kindergarten, there are plenty of centres available, such as Smart Reader Kids Bandar Utama which is located at the corner lot of Jalan BU6/12.

See also: Education in Malaysia

Community Centre

There is a community centre completed in the year 2005 situated between BU6 and BU3 next to Puay Chai 2 school. This community centre contains a community hall, a football (soccer) field, basketball/volleyball court and a few indoor badminton courts. It was built as a trade-off for not building low-cost houses. Many residents like to play games at the facilities. Indeed, some residents, primarily BU6, also like to play games in the residents association, BURA.

Most recently in 2014, the residents association, BURA, was de-reregistered by the Selangor branch of the Registrar of Societies for reason of not being in operation. Thank you, BU6.

Commercial complexes

Residents of Bandar Utama tend to shop at the 1 Utama shopping mall, the largest in Malaysia. 1 Utama is located at the far end of the BU1 until BU10 side (right along the Damansara-Puchong Expressway), and quite a distance from BU11 and BU12. It is tenanted by almost every international brand, and some two large cineplexes with a total of 24 screens. A significant number of international tourists also shop at 1 Utama. It has been well patronised since its opening in 1995, allowing it to more than double its size since then. As of 2004, it spans more than 5,000,000 square feet (460,000 m²), making it one of the largest malls in Malaysia.

Centrepoint Bandar Utama, a much smaller commercial complex is also frequented by those who do not feel like travelling to the far end of Bandar Utama. It is located in the heart of the neighbourhood, and is much more cosy than 1 Utama. It thrives in particular on officeworkers in a hurry having their lunch breaks, as well as students from the three secondary schools within walking distance of it, who dislike the food provided by the school canteens for lunch. It is also right next to a McDonald's drive-through franchise.

A Tesco outlet, the Ikano Power Centre, the Curve mall and the largest Ikea outlet in Southeast Asia were opened in the adjacent township of Mutiara Damansara. This has provided even more choices to the residents of Bandar Utama. There are also free bus services from the Curve to Bintang Walk, and from 1 Utama to Sri Hartamas.

Covered parking in 1 Utama is RM2 for the first 4 hours, and RM 1.00 for every subsequent hours. 1 Utama no longer accepts Touch n Go cards. They have instead implemented their own system called the OneCard. The OneCard can be used to access the Preferred Parking zone located at the new wing on Level 3, which charges slightly more. There is also Platinum parking on the ground floor of the new wing that is accessible using the Platinum Card (RM10 for the whole day). The open air parking is at a flat rate of RM1 per entry. They have reinstated a free pass-through for the car park if you are parking or passing through the car park for less than 15 minutes.

Centrepoint introduced new parking fees effective 1 April 2006. On weekdays, the first hour is free of charge. The second and third hours are charged at 50 sen each, and the following hours at RM1 each. There is no charge for entry after 6pm on weekdays, and all day for weekends and public holidays. You do not need to validate your parking ticket if you are exiting within the free parking timeframe allocated.

There are frequent bus transfers to and from the Kelana Jaya LRT station at 30-minute intervals at the New Wing bus stop. There are also RapidKL busses serving the area connecting Kuala Lumpur and Putrajaya (the new central governmental administrative centre of Malaysia).

The ramp heading downwards from the NKVE flyover (connecting both sides of Bandar Utama) to Tropicana and the Damansara NKVE toll has since been closed for construction work. To get to the toll booth, you will have to take the KL-bound exit and make a U-Turn at the Damansara Jaya exit, keeping in mind not to go on the flyover passing over the nearest U-Turn.

Accomodation

There is a 5-star hotel completed in 2007 named One World Hotel. There are 438 rooms in the hotel located next to Sri Pentas.

Administration

Bandar Utama, like most of Damansara, falls under the jurisdiction of the Majlis Bandaraya Petaling Jaya (Petaling Jaya City Council). Like the rest of Damansara, it too falls under the parliamentary constituency of Subang, and thus is represented in parliament by Sivarasa a/l K. Rasiah. In the State Assembly of Selangor it is represented by Wong Keat Ping of the Parti KeADILan Rakyat political party under the constituency of Bukit Lanjan.

GST GUIDE FOR PROPERTY OWNERS AND PROPERTY HOLDING COMPANIES

21 October 2014

Created: 21 October 2014

This article provides some insights on the application of GST for property transactions following the issuance of the Guide on Property Developer

(the Guide1).

REAL estate for this purpose refers to land and everything attached to it, whether on or below the surface. Land includes buildings, trees, vegetation and other structures and objects in, under or over it. Real property is the right to use real estate and includes activities concerned with ownership, use and

transfers of immovable property.

WHAT IS DEFINED AS SUPPLY IN PROPERTY DEVELOPMENT?

The GST Bill 2014 provides that the tax "shall be charged and levied on (a) any supply of goods and services made in Malaysia, including anything treated as a supply under this Act and (b) any importation of goods into Malaysia."

Land that is under charge (mortgage), lien or caveat is not a supply. Likewise, entering or lifting of caveat is not a supply by lender or borrower. A land title charged to the lender by the developer to obtain a loan is regarded as security for payment of debt and thus is not regarded as a supply, and hence is not subject to GST. However, when the lender sells land under power of sale in satisfaction of debt or foreclosures on the land of the developer, the developer

is regarded as making a supply and the tax will be accounted for by the lender. Converting an inventory to investment property per se is not a supply as it is not considered as disposal. The supply of land and buildings used for commercial, administrative and industrial purposes such as shop lots, offices, retail business, small office home office (SoHo), small office virtual office (SoVo), small office flexible office (SoFo), factories, hotels, motels, inns, hostels and warehouses is subject to GST.

Whereas land used for agricultural, residential (such as link houses, semi-detached houses, detached houses, apartments including serviced apartments and condominiums) or general purposes such as burial grounds, playgrounds and religious purposes is exempt from GST i.e. exempt supply.

Note :

1. The Guide on Property Developer provides GST treatment that involves activities of property developers, including housing developers licensed under Housing Developers (Control and Licensing) Act 1966, and any person engaged in or undertaking a property development. As the GST Guides are still being revised or fine-tuned by the Royal Malaysian Customs Department (RMCD), information contained herein may be subject to changes. Readers are advised to look up the GST Guides at the RMCD's website regularly for latest updates.

DO I HAVE TO REGISTER FOR GST?

A person is required to be registered for GST if he makes taxable supplies where the annual taxable turnover2 exceeds RM500,000 in the previous 12 months. Alternatively, if a person is currently making taxable supplies and expects to make taxable supplies exceeding RM500.000 in the next 12 months, he is also required to be registered.

Note :

2.  Taxable turnover means the total value of taxable supplies excluding GST. Taxable supplies here include the sale, lease, disposal and rental of non-residential property.

CALCULATION OF TAXABLE SUPPLIES FOR GST REGISTRATION

The value of taxable supplies should be calculated on all taxable supplies3 (standard-rated and zero-rated supplies) made by any person, for a period of twelve months excluding the value of

a)            capital assets4 disposed;

b)            imported services; and

c)            disregarded supplies made in relation to warehousing scheme or disregarded supplies made within or between designated areas.

All supplies in respect of charges and fees imposed by the Government related to real estate such as quit rent, premium, survey fees (by the Survey Department), registration of titles and other payment are regarded as out of scope. The same goes for assessment rates imposed by the local authorities, the conversion premium and all other premiums and fees imposed by the Federal and State Authority related to real estate. Interest on late payment is regarded as a penalty and is considered to be out of scope and hence, not subject to GST.

DO I HAVE TO CHARGE AND ACCOUNT FOR GST?

Generally, the treatment of sale, purchase and rental of residential properties is an exempt supply5. On the other hand, all transactions involving sale and lease of non-residential properties are subject to GST. Hence, if a person is GST-registered, he will have to charge GST on the sale and lease of such properties and account for the GST as output tax in the GST returns.

For GST purposes, whether the property is a residential or non-residential property depends on the approved usage of the building or structure i.e. the usage stated in the document of title. The zoning of land is disregarded in this instance. This means if a residential building is built on the commercial land title, it will be treated as residential and such transaction is exempted from GST. Conversely, if the residential building has been used for commercial purposes, GST is chargeable on the sale of this building.

For instance, shophouses will be treated as partially commercial and residential if one floor is used for commercial and the other floor is for residential. Apportionment is required between the commercial and the residential usage as the former is subject to GST while the latter is not.

Note :

3. For property under construction, the total value of taxable supplies and exempt supplies refers to the Gross Development Value of the whole project.

4. Capital assets may refer to a property that is used for conducting the business or held in the name or recorded in the books of the business for rental purposes.

5. This means you can neither charge nor collect GST on the sale or lease of these properties. Thus, if you are a GST registrant, you will have to report this supply as an exempt supply in the GST return.

 

 Note :

 6. If the lease agreement contains clauses which will transfer the title of the asset to the lessee at the end of the leasing period, it is a supply of goods. If there is no transfer of title at any time of the leasing period, then it is a supply of services. * In the event a lease spans the start date of GST, tax will need to be levied on the rent payable from the start date. The impact and pricing implication of the GST needs to be considered in relation to these contracts.

7 Reimbursements are expenses incurred in relation to goods and services consumed to enable the performance of services to clients such as printing, photocopying, and telephone charges. These expenses are deemed to form part of the cost of supplying services to clients, thus GST is chargeable. If GST is incurred by the property manager on the original expenses, this will be recoverable as an input tax credit provided a tax invoice is obtained from the supplier.

HOW TO CLAIM INPUT TAX

Any input tax incurred on the purchase of land and development of non-residential properties is claimable, provided the person is GST registered and the property is used for

•             furtherance of his business;

•             leased out for the purpose of business; or

•             developed into non-residential properties for the purpose of sale or lease.

Property developers are generally involved in making mixed supply9. Hence, developers will only be allowed to claim input tax that is directly attributable in making taxable supplies. Input tax on goods and services which are not directly attributable to making taxable and exempt supply is regarded as residual input that needs to be apportioned i.e. partial exemption. This concept will be discussed in the next Accountants Today issue.

For property under construction, the property developer will have to make adjustment on the input tax claim if there is a change in the value of taxable and exempt supplies over time based on the Gross Development Value of the whole project .

Where a development project involves both residential housing and a commercial building, the residual input tax that can be claimed are GST incurred on utilities, rental, office equipment and stationeries etc., infrastructural and recreational works such as landscaping, community hall, car park facilities, playgrounds and incidental services. As provided in the Guide, while the supply of a residential condominium is an exempt supply, sales of extra car park lots, air conditioners and refrigerators are standard rated supplies and hence is subject to GST. Giving a free car park lot is a supply of goods and it is deemed to be a supply even though there is no consideration. Input tax incurred on clubhouse and car park building cost, air conditioner and refrigerator can be claimed as these are used for making a taxable supply. However, input tax incurred on overhead expenses (site office rental, utilities) for making of residential property is not claimable.

Property used for business without consideration is not a supply but input tax can be claimed because the property is used for the purpose of business. Conversely, if the property is used for private purposes, it will constitute a deemed supply and the developer will have to account for output tax. Where the property is used by a developer who makes mixed supply, the developer will have to payback the input tax earlier claimed by making the necessary adjustments.

CONCLUSION

By designating residential land as an exempt supply, the government aims to reduce the GST burden on buyers of residential properties- a well-intended move. However, property developers who supply a mixture of residential and commercial properties will face the difficult challenge of splitting the direct input taxes and apportioning the residual input taxes between residential (exempt) and commercial (standard-rated) properties as required by the GST rules.

In view of the fact that most developers are involved in mixed projects, property developers need to familiarise themselves with such mechanisms i.e. the rules on Partial Exemption and Capital Goods Adjustment; arguably some of the most complex aspects of the GST system. For deeper understanding, it is essential to refer to the Guide covering such topics.

Note :

8.            The recovery of expenses will be treated as disbursement and will not be subject to GST only if it satisfies the following conditions:

a)            customer is responsible for paying the third party;

b)            customer knows that the goods or services would be provided by a third party;

c)            customer authorised you to make the payment on his behalf; i.e. you acted as an agent of the customer when paying the third party;

d)            customer received and used the goods or services provided by the third party;

e)            payment is separately itemised when you invoice the customer;

f)             You recover only the exact amount you paid to the third party; and

g)            The goods or services paid for are clearly additional to the supplies which you make to the customer.

9.            Mixed supply refers to developers who make both taxable and exempt supplies.

SOURCE : MIA CCOUNTANTS TODAY | MAY/JUNE 2014