- GST is to be charged and levied on:
- GST is charged on any supply of goods and services if the following conditions are satisfied :
- Input tax is the GST incurred on any purchase or acquisition of goods and services by a taxable person for the purpose of making a taxable supply in the course or furtherance of business. These purchases or acquisitions would include:
- A person is entitled to claim input tax if he is making a taxable supply and satisfies the following criteria:
- Input tax incurred by a taxable person in respect of the following supplies shall be excluded from any credit under GST:
All goods exported from Malaysia are zero-rated that is GST charged at 0%. This means that an exporter does not collect GST on his exports but he is able to claim GST incurred in his acquisitions as his input tax if he is a taxable person. The exporter may recover the GST incurred by crediting the amount allowable against his output tax chargeable on his taxable supplies.
An exporter can zero rate his supply of goods at the time when the goods are exported. Goods are considered to be exported when:
The exporter must possess valid documents to proof that the goods have been exported
Generally, all imported goods into Malaysia are subject to GST. However, certain goods imported by any person or class of persons are given relief from payment of GST upon importation under the Goods and Services Tax (Relief) Order 2014. An importer who is a taxable person would be eligible to recover the GST paid on imports subject to the normal rules. The recovery of GST incurred on imports is made by crediting the amount allowable against his output tax chargeable on his taxable supplies.
Under the GST Act, "imported services" means any services by a supplier who belongs in a country other than Malaysia or who carries on business
outside Malaysia to a recipient who belongs to Malaysia and such services are consumed in Malaysia. When services are imported from outside Malaysia
and supplied to a recipient in Malaysia, being taxable supplies if made in Malaysia, the recipient of the supply shall account and pay GST if such
imported services are for the business purposes and consumed in Malaysia. Generally, the GST legislation provides for the supplier to charge GST
on taxable supplies he makes to the recipient.
However, in the case of imported services, the GST liability shifts from the supplier to the recipient if the recipient's fixed or business establishment or his usual place of residence is in Malaysia.
Hence, the recipient is liable to account GST on the supply made for the purpose of any business carried on by him.
The value of imported goods is determined under the Customs (Rules of Valuation) Regulations 1999. For GST purpose, the value for imported goods will be aggregate of the following:
Any person who makes a taxable supply for business purposes and the GST exclusive value of the taxable turnover of that supply for a period of 12
months or less exceeds the threshold of RM500,000 is required to be registered for GST.
However, business with taxable turnover of RM500,000 and below, even though not required to be registered, may choose to apply for voluntary registration.
The determination of taxable turnover for GST registration purposes has to include all supplies of goods and services which are taxable,
i.e. standard rated supply, zero rated supply, deemed supply as well as disregarded supply.
However, the following taxable supplies will not be included:
A registered person must comply with the requirements under GST legislation as follows:
- The issuing of tax invoice can be classified as follows:
- A full tax invoice should contain the following information:
Example of Full Tax Invoice (Wholly Taxable Supply)
- There are instances where the Director General may, upon request in writing allow registered persons to issue simplified tax invoice to their customers in accordance with section 33(3) of the GST Act 2014. Issuance of this invoice normally involves retailers who generate large volume of invoices such as hypermarkets, mini markets, restaurants, beauty salons, petrol kiosks, motor workshops and other point of sales outlets.
- A simplified tax invoice can be issued regardless of any sales amount and can take the form of an invoice, receipt, voucher or any other similar document provided it contains the particulars approved by the Director General. For instance, a registered person applies to the Director General to allow him to omit from the full tax invoice the following prescribed particulars:
- In this case, the Director General may allow such invoice to be issued by the registered person provided the invoice contains the following particulars:
- Simplified tax invoice can be used to claim input tax. In the case of an approved tax invoice without the name and address of the recipient, the allowed input tax amount claimable is RM30.00 or less. If the GST amount is more than RM30.00, he can only claim the input tax up to a limit of RM30.00 using this invoice. Therefore, he must request for a tax invoice with the name and address of the recipient to enable him to claim the full input tax if it is more than RM30.00.
Example of Simplified Tax Invoice (Wholly Taxable Supply)
- Under the GST Act 2014, the Minister may grant relief to any person or class of persons from the payment of the whole or any part of the tax on any taxable supply of goods or services or any importation of goods or class of goods. A taxable person shall be relieved from charging and collecting GST on taxable supply of goods or services made to such person or class of persons. GST should not be charged on the amount of taxable supply and the tax invoice issued to such person shall state the clause "Relieved from charging GST for supply to a person given relief under Item ....., Schedule ...... of GST (Relief) Order 2014".
- Whenever a tax invoice of a particular supply is lost or misplaced, you may request the supplier to provide a certified true copy of the tax invoice as it is an offence to issue more than one tax invoice per taxable supply. This certified copy of tax invoice can be used for claiming input tax as long as the document is clearly marked "COPY" by the supplier.
- A pro forma invoice is not regarded as a tax invoice. You can only claim input tax in your GST return if you have a proper tax invoice. If your supplier does not give you a proper tax invoice, you should ask for one.
- Debit notes are issued by the supplier when the value of the supply is increased after a tax invoice was issued. These notes are issued to correct a genuine mistake or to give a proper debit when there is a change in rate or description; or when adjustments are made in the course of business.
- Credit notes are issued by the supplier when the value for a supply is reduced after a tax invoice has been issued. These notes are issued to correct a genuine mistake or to give a proper credit when there is a change in rate or description; or when adjustments are made in the course of business.
- In accordance with the GST Regulations 2014, the following details should appear in the credit and debit notes:
Example of Credit Note
Example of Debit Note
- Section 36 of the GST Act 2014 requires every taxable person and certain non-taxable person to keep full and true records of all transactions which affect or may affect his liability to tax. These records should be kept in Malaysia except as otherwise approved by the Director General and shall be in the National or English language, and should be preserved for a period of seven years from the latest date to which the records relate.
- Records are documents which include all books of account or relevant computer print-outs (if a computer is used), as well as supporting documents. If the record is in an electronically readable form, a manual to the software must be available. Records include:
- All taxable persons and certain non-taxable persons should keep every reasonable accounting documents and records of all business supplies and acquisitions to enable GST auditors to establish the nature, time and value of all taxable supplies and importation of goods and services, including information which assists in reconciling accounting records with the GST returns submitted.
- Details of any exempt supplies and any method of apportionment used should also be available. The term "records" therefore include the record of all goods and services supplied, received and imported and the applicable rate of tax on all supplies made and received. The specific records that you are required to keep include:
You may require the above information when calculating your GST liability before filling in your GST return.
if royalty has already been included into the customs value during importation, what is the GST treatment on royalty under sec. 13 GSTA 2014?
Can businesses use any exchange rate for transaction involving foreign currency?
Financial guarantees in relation to loans or payables of subsidiary companies provided by the Company for no compensation, where the fair values are accounted for as contributions and recognised as part of the cost of investment in subsidiary companies. What is the GST treatment on this supply?
For supply of utilities, telecommunication, TV paid broadcasting services and other similar supplies, can adjustment be done in the next billing instead of issuing credit or debit note?
Motorcar used exclusively for the business purpose as approved by the DG. To what extend is the application of this provision in term of claiming input tax?
Below are expenses usually billed to employees and not to the businesses, can the businesses claim the input tax and how?
- Car park and other travelling expenses incurred while visiting customers or on working trips;
- Mobile phone bill expenses for making business calls on a line registered in their own name;
- Entertainment meals with existing customers;
- Hotel accommodation while on outstation business trip;
What is the first taxable period for company with financial year end on 31st August and the revenue is below RM5 million, is it -
How to determine the GST on gift?
|Date||Cost||GST||Time of Supply|
|1st Scenario||Apr 2015||RM200|
|Total||RM700||GST 6% x RM700 = RM42||Nov 2015|
|2nd Scenario||May 2015||RM700||GST 6% x RM700 = RM42||May 2015|
XYZ Company in Kuala Lumpur (not in Designated Area @ DA) purchases goods from ABC Company in Kuantan and request ABC Company to send the goods to
his branch in Langkawi (Designated Area):
What is the GST treatment on the goods send to Langkawi?
A foreign company making taxable supply in Malaysia has to appoint an agent to act on his behalf. The registration of a foreign principal will be
under the name of such foreign principal.
Who will be the importer and who is eligible to claim input tax In the case of a registered foreign principal importing goods for the purpose of making supply in Malaysia?
|Total goods held on hand on 1st April 201||Related Invoice||Sales Tax Paid|
|Description||Quantity||Date||Quantity||Price per Unit (RM)||Per Unit (RM)|
|Sandal||3000 unit||1st March 2015||800 unit||2.00||0.20|
|15th December 2014||1,500 unit||1.80||0.18|
|1st June 2014||2,500 unit||1.70||0.17|
The value for claiming special refund -
(800 x RM0.20) + (1,500 x RM0.18) + (700 x RM0.17) = RM549
E.g. NST, The Star, Utusan Malaysia, Berita Harian, Sin Chew Jit Poh, Malaysia Nanban, Utusan Borneo or Utusan Sarawak
|mainly of current news of general interest||Daily or weekly||Society at large||Expires at the time of purchase|
E.g. The Edge, SME, The Times, Reader's Digests, Solusi, Mangga or The Focus
|mainly devoted to the publications of intelligence on subject of a specialised nature or sectional interest (e.g., legal, medical, financial, commercial, fashion or sporting)||weekly, fortnightly, monthly, quarterly or half-yearly||Specific segment of the society e.g., industrial, medical practitioners, businesses or automotive within the industrial, political, etc., organisations concerned and periodicals such as fashion magazine which may be issued by a trader or an association for publicity purposes.||Not applicable|
|No.||Type||Subject to GST||Not Subject to GST|
A person appointed as director -
A person is appointed as a director on the capacity of his post (contract of services) -
A chartered accountant in a listed company is appointed as a director. He also is an expert and qualified person and has his own businesses or hold positions in other companies.
Members of hospitals visitors' board or members of Syariah Advisor which is not under the personal capacity.
How to determine whether the value of supply is nominal or not?
Whether businesses can issue tax invoice with GST NIL to their customers before effective date on the trial basis?
For the purpose of reducing compliance cost, can a mixed supplier who is GST registered, instead of issuing normal invoice, issue a tax invoice when making only exempt supply?
(i) PCA refers to Malaysia other than DA.
(ii) DA refers to Labuan, Langkawi and Tioman.
Whether an individual has to charge GST when making a supply of his commercial property?
When there is a land development agreement between a land owner and a developer to develop a land, can the developer issue invoice to the buyer
under the developer's own name and account for output tax?
When there is a land development agreement between a land owner and a developer -
I have sold a shop lot worth RM1 million. I have made the full payment and S&P signed before 1st April 2015 but the key is handed over on the 5th April 2015? Is the property subject to GST?
Whether a person licensed under the Service Tax Act 1975 or Sales Tax Act 1972 can still issue invoice or debit note after 1/4/2015 for services rendered or goods sold before 1/4/2015?
Regarding gifts above cost of RM500, received by a taxpayer (B) from another taxpayer (A) and subsequently given away free again by B to C after the gift becomes B's business asset -
The classification of residential property will be based on the design features and essential characteristics and attribute of the property. If SOHO meets the above criteria, is the sale of SOHO apartment classified as a residential property?
The supply made by LC to LB will qualify for an out of scope supply, subject to compliance with the following conditions -
Whether local car manufacturers can use CJP1 form to claim special refund for cars held on hand on 31/3/2015 for which sales tax and excise duty
have been paid but yet to be sold to distributor.
CJP1 form is the form used for the payment of sales tax prior to GST implementation.
CJP1 form can be used as a valid document for local car manufacturer to claim special refund equal to the amount of sales tax that has been paid on the cars held on hand on 31.3.15 provided that:
Who can claim special refund of full amount of sales tax paid in respect of imported CBU cars held on hand on 31.3.15?
Any person who wants to claim 100% special refund of sales tax paid on imported CBU cars held on hand on 31/3/2015 must:
Whether stock of raw materials or components to be used for making a taxable supply held on hand on 31.3.15 for which sales tax has been paid before 1.04.15 are eligible for a special refund claim?
The stock of raw materials or components to be used for making a taxable supply held on hand on 31.3.15 for which sales tax has been paid before 1.04.15 are eligible for the special refund claim with conditions that such stock of raw materials or components -
|Not a supply||Is a supply|
|Not entitled for input tax claim||Entitled for input tax claim|
|Incur expenses as an agent acting on behalf of the client.||Incur expenses as a principal.|
|The client is the recipient of the supply (invoice is in the client's name)||The client is not the recipient of the supply (invoice is in the principal's name).|
|The client is the person responsible to pay for the supply||The principal is the person responsible to pay for the supply.|
|The payment is authorised by the client.||The payment is authorised by the client. The payment is not authorised by the client.|
|The client knew that the supply is made by a third party.||The client has no knowledge that the supply is made by a third party.|
|The exact amount is claimed from the client and the agent has no right to alter or add on the value of the supply.||The principal has the right to alter or add on the value of the supply.|
|The payment is clearly an additional to the supply made to the client.||The payment is for the supply made to the client.|
The transport service provider under item 4, Second Schedule of GST (Zero-Rated Supply) Order 2014 refers to a carrier such as airline or shipping line and includes -
** All the information stated above is for reference purpose only and most of the recommendations are the general guide. Specific recommendation might be required for some of the businesses. We strongly encouraged you to engage our GST consultation services by sending in your request to firstname.lastname@example.org
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