Deputy Finance Minister Datuk Ahmad Maslan said, however, the ministry projected that CPI will stabilise after a few months.
"This projection is based on our studies in other countries that have already implemented GST or Value Added Tax (VAT) as it is called in other countries. In countries like Canada, Singapore and Australia, CPI increased for the first quarter after it was introduced.
"But after it reached a certain level, CPI went down again," he said during a talk on GST at the Sabah Federal Civil Service Assembly, here, Thursday.
He also reiterated the fact that essential goods such as basic food, piped water and the first 200 units of electricity consumption to domestic consumers are zero-rated.
Other items which will be zero-rated under Malaysia's GST include sea produce, meat, poultry, education and healthcare.
"This is Malaysia-style GST. We do not want to burden the people," said Ahmad.
There are 950 items which will be taxed under the GST. The impact on prices will vary with some items will be cheaper, some will stay the same while others will be more expensive.
"For example, furniture. Actually, furniture prices will go down because right now, they are paying 10 per cent tax and after GST, they will only have to pay six per cent.
"But people are using GST to market their products. I have seen a big banner outside a furniture shop, 'Buy Now Before GST'. I told my men to ask the owner to take the banner down because it is a bad marketing and dishonest," he said.
The Government, through its agencies like the Customs Department and Ministry of Domestic Trade, Cooperatives and Consumerism (KPDNKK), will be monitoring the situation closely in the days following the implementation of GST and will arrest those who intentionally raised the prices of their goods without valid reasons.
Ahmad said the Government guaranteed that prices of items such as rice and sugar will not increase after GST and the number of enforcement officers in the Customs Department and KPDNKK will be increased to ensure anti-profiteering laws are followed.
He also addressed concerns by some quarters in Sabah and Sarawak who said that State governments will lose out in terms of monetary gains following the introduction of GST.
"I have been asked about this by policy makers from both states actually.
To clear up the matter, state governments can continue to collect taxes. In fact, there are only two taxes involved - the Crude Palm Oil (CPO) and entertainment duty.
"Even after GST is implemented, both of these taxes will be continued," he explained.
The Government, he added, will not delay in its plan to implement GST next year and advised the people to stop asking about postponing it.
"I know, the Government always give opportunities for the people when it comes to implementing any policy. We delay giving compounds, we extend the period for BR1M.
"But I assure you, the Government will not delay the implementation of GST which will be on April 1 next year," he warned.
Therefore, he continued, business owners who make RM500,000 or more in annual sales must register their companies before the deadline on Dec 31 this year or risk being compounded.
Registration can be made online and takes only a few minutes at the ministry's website at http://www.treasury.gov.my.
All the information, said Ahmad, can be found at the website and the government will not hesitate to fine those who failed to adhere to the laws.
"Ignorance cannot be an excuse. All information is at your fingertips.
If you said your company does not have Internet, I think that is too bad.
What kind of company do you have anyway?" he said.