Stern action will be taken against companies that do not register for the Goods and Sevices Tax (GST) to be implemented next month, said Deputy Finance Minister Datuk Ahmad Maslan.

He said 5,000 officers and staff of the Royal Malaysian Customs Department (JKDM) will be involved in a special GST operation next month to track down errant firms.

"Based on our records, 345,965 companies have registered as of yesterday, and we believe more firms will register before March 15," he told reporters after a briefing on the GST, Budget and current issues for the Indera Mahkota parliamentary constituency here today.

Also present were JKDM state director Datuk Sarip Ismail and Indera Mahkota Umno division chief Datuk Mustafar Abdul Hamid.

The inflation rate is expected to increase by only around 1.08 per cent with the transiton to the GST, he said.

"It would only be temporary, and we believe this problem would not affect national revenue," he said, adding the GST could also reduce the percentage of the underground economy of the country's gross domestic product from the current 30 per cent to just 10 per cent.