Transcript Selamat Datang

SALIENT FEATURES
OF GST
MATTA
Date :28 April 2014
Place: Vivatel Hotel
Time: 2.30pm- 4.30 pm
SAKENAH BEGUM BT. MD. NAZIR
1
Agenda
1
WHY GST?
2
WHAT IS GST?
3
PROPOSED GST MODEL
4
BASIC ELEMENTS OF GST
5
REGISTRATION FOR GST
2
1
3
WHY GST?
Direct Tax
Corporate Tax
Individual Income
Tax
Real Property Gain
Tax
Stamp Duty
Indirect Tax
Customs Duty
Excise Duty
SALES TAX
SERVICE TAX
4
WHAT IS SALES TAX?
• chargeable on certain goods:
- importation
- manufactured in Malaysia
• since 1972
• rate
5
HOW SALES TAX WORKS
Manufacturer
Government
collects tax
at the
manufacturer’s
level only
Wholesaler
Retailer
Consumer
Element of sales
tax embedded in
the price paid
by consumer
6
EXAMPLES OF SALES TAX GOODS
7
EXAMPLES OF SALES TAX GOODS
8
WHAT IS SERVICE TAX?
• chargeable on prescribed goods
and services
• implemented since 1975
• rate
9
HOW SERVICE TAX WORKS
Government
collects tax
when service
provided to
businesses
Businesses
Tax rate = 6%
Service
provider
Government
collects tax
when service
provided to
consumer
Consumer
Consumer knows
he is paying
service tax
10
EXAMPLES OF TAXED SERVICES
Restaurant
Hotel
Security Services
Professional Services
Parking Lots
Car Service Centres
11
WHY GST?
• Part of the government’s tax reform
programme to enhance the efficiency and
effectiveness of the taxation system
 inherent weaknesses in the current sales tax
and service tax
 cascading effect & double taxation
 compounding/pyramiding effect
 tax embedded in goods exported
 transfer pricing
 Government is too dependent on income tax
and petroleum revenue
12
WHY GST?
• A more stable source of revenue compared to
income tax
 less susceptible to economic downturn due to
the consumption nature of the tax
• GST is a more efficient and effective tax system
 self policing
 in-build cross checking features
 enhance tax compliance
 less bureaucracy
• Hidden/shadow sectors/industries
encouraged to be in the GST system
may
be
 businesses able to claim back input tax
13
160 countries implementing GST/VAT
EUROPE
CARIBBEAN, CENTRAL &
NORTH AMERICA
No. of countries = 19
Highest tax rate = 17.5%
Lowest tax rate = 5%
No. of countries = 53
Highest tax rate = 27%
Lowest tax rate = 5%
ASIA
No. of countries = 19
Highest tax rate = 20%
Lowest tax rate = 3%
ASEAN
No. of countries = 7
Highest tax rate = 12%
Lowest tax rate = 7%
SOUTH AMERICA
No. of countries = 11
Highest tax rate = 22%
Lowest tax rate = 10%
AFRICA
No. of countries = 44
Highest tax rate = 20%
Lowest tax rate = 5%
OCEANIA
No. of countries = 7
Highest tax rate = 15%
Lowest tax rate = 5%
2
15
What is GST?
• Also known as Value Added Tax (VAT)
• Implemented by 160 countries
• Broad based and multistage consumption tax to
replace sales tax and service tax
• A consumption tax in the form of value added tax
• GST incurred on inputs is allowed as a credit to
the registrant – offset against output tax
• Imposed on goods and services at every stage of
the production and distribution chain
What is GST?
INPUT
Raw materials
Goods, machines etc
Services (rental
telephone and
insurance)
OUTPUT
Business
Utilities
(electricity and
water)
GST on inputs
= Input tax
output tax - input tax
GOODS
or
SERVICES
GST on outputs
= Output tax
17
What is GST?
TYPES OF
SUPPLY
OUTPUT TAX
INPUT TAX
Standard rated
6%
Claimable
Zero rated
0%
Claimable
Exempt
No GST charged
Non claimable
18
How GST Works? Standard - rated
GST AT 6%
Manufacturer
Wholesaler
Manufacturer Wholesaler
claims back claims back
GST
GST
Retailer
Retailer
claims back
GST
Consumer
Consumer
pays 6%
GST only
19
How GST Works? Standard - rated
Delivery
or
Supply
Chain Manufacturer
Wholesaler
VALUE
ADDED
ACTIVITY
Purchase cost : RM100
GST* 6%
Purchase Price : RM106
*Note : claim input tax
Added value : RM25
(Add GST : RM1.50)
Retailer
Consumer
Selling price : RM125
GST* 6% : RM7.50
Total selling price: RM132.50
20
How GST Works? Zero - rated
GST AT 0%
Manufacturer
Wholesaler
Manufacturer Wholesaler
claims back claims back
GST
GST
Retailer
Retailer
claims back
GST
Consumer
Consumer
does not pay
any GST
21
How GST Works? Zero - rated
Delivery
or
Supply
Chain Manufacturer
Wholesaler
VALUE
ADDED
ACTIVITY
Purchase cost : RM100
GST* 0%
Purchase Price : RM100
*Note : claim input tax
Added value : RM25
Retailer
Consumer
Selling price : RM125
GST* 0% : RM0
Total selling price: RM125
22
How GST works? – Exempted
GST 6%
Medical supplier
Supplier claims tax
paid on inputs
NO GST
Private hospital
Private hospital
cannot claim GST on
inputs
Consumer
Private Hospital
does not charge
GST – consumer does
not pay any GST
23
How GST Works? Exempted
Delivery
or
Supply
Chain Manufacturer
Wholesaler
VALUE
ADDED
ACTIVITY
Purchase cost : RM100
GST* 6%
Purchase Price : RM106
*Note : claim input tax
Added value : RM25
Retailer
Consumer
Selling price : RM131
GST* : RM0
Total selling price: RM131
24
3
25
Proposed GST model
•
To replace current tax system
Sales Tax &
Service Tax (SST)
5%, 6%, 10% & specific rate
Various threshold
•
Goods and Services
Tax (GST)
Rate = 6 %
Threshold > RM500,000
GST is charged on goods and services that
are
 supplied in Malaysia
 Imported into Malaysia
26
Proposed GST model – Zero rated supply
EXPORTED GOODS AND
SERVICES
WATER SUPPLY TO
DOMESTIC USERS
200 UNITS A MONTH
27
Proposed GST model – Exempt supply
BUS
TRANSPORTATION
HEALTH AND EDUCATION SERVICES
TOLLS
RESIDENTIAL HOUSES
-school, express, stage
WATER TRANSPORTATION
X
FINANCIAL SERVICES
-ships, ferries and boats
TAXIS
RAIL TRANSPORTATION :
KTM, ERL, LRT, Monorail
LAND FOR PUBLIC USE
28
Proposed GST model – standard rated supply
Standard Rate
29
Proposed GST model – Supply by Government
Federal &
State Government
Local Authority &
Statutory Body
All supplies by Federal &
State government
Supplies made in the regulatory
and enforcement (R&E) functions
Out of Scope
eg. Assessment rate collection, issuance
of licenses, penalty
Subject to
GST
Supplies that have been
directed by Minister in the
GST (Government Taxable
Supply) Order
Non R&E functions
ie. Business activities for example rental
facilities and etc.
eg. Supply made by RTM, Prison
Department
Acquisitions
Need to pay GST on their Need to pay GST on
acquisitions of services
acquisitions
Relief on all goods
Relief on selected goods
their
30
4
31
Basic Elements of GST
Scope and Charge
• GST is charged on
 the taxable supply of goods and
services
 made by a taxable person
 in the course or furtherance of
business
 made in Malaysia
• GST is charged on imported goods
32
Basic Elements of GST
Scope of tax
Supply
N0
Not
Subject to
GST
Importation
Taxable supply
Taxable person
For the purpose of
business
Subject to
GST
Made in Malaysia
33
SUPPLY
GST Bill
 defines a supply as “all forms of supply”
 includes imported services
 done for a “consideration”
 anything which is not a supply of goods is
a supply of services
 does not include money
34
SUPPLY
Sales Tax Act 1972
 sale, usage or disposal of taxable
goods
Service Tax Act 1975
 provision of taxable service
35
SUPPLY
General meaning
 to furnish, serve or provide something
Generally, a transaction is a supply if :
 someone does something or agrees to do something in
return for a consideration and
 involves a supplier and a receiver
Examples:
 selling something
 hiring or renting something
 doing something for some one else (a service)
36
TAXABLE SUPPLY
Includes zero rated and standard rated
supply
GST charged on
 Taxable supplies – sales of goods and provision of
services
 Deemed taxable supplies – disposal and private
use of business assets, imported services, goods
supplied by overseas supplier via agents eg.
contract or toll manufacturers (drop shipment)
and gifts costing more than RM500
37
Basic Elements of GST
Supplies not subject to GST
 cash donation or grants where a person does not
get benefits
 compensation or liquidated damages
 disbursements, dividends, loan repayments or
capital injection
 transfer of business as a going concern
 contribution to pension, provident or social
security fund
38
Basic Elements of GST
Scope of tax
Supply
No
Not
Subject to
GST
Taxable supply
Importation
Yes
Taxable person
For the purpose of
business
Subject to
GST
Made in Malaysia
39
TAXABLE PERSON
Meaning of person
 Includes natural and juridical persons for example
individual, corporation, Federal Government, State
Government, statutory body, local authority,
society, trade union, co-operative society, trust,
partnership and any other body, organization,
association or group of persons, whether corporate
or unincorporated
Meaning of taxable person
 A person who is or is required to be registered for
GST
40
Basic Elements of GST
Scope of tax
Supply
No
Importation
Taxable supply
Yes
Not
Subject to
GST
Taxable person
For the purpose of
business
Subject to
GST
Made in Malaysia
41
BUSINESS
Meaning of business
 no specific meaning but it is wide
 Includes any trade, commerce,
profession, vocation or any other
similar activity whether or not for a
pecuniary profit
42
BUSINESS
Business test
 Is the activity a serious undertaking or work earnestly
pursued?
 Is the activity actively pursued with reasonable or
recognizable continuity?
 Is the activity conducted in a regular manner and on sound
and recognized business principles (business like nature)?
 Is the activity concerned with the making of supplies for a
consideration?
 Is the activity concerned with the making of supplies of a
kind commonly made by commercial organizations?
43
Basic Elements of GST
Scope of tax
Supply
Importation
Taxable supply
No
Not
Subject to
GST
Taxable person
For the purpose of
business
Yes
Subject to
GST
Made in Malaysia
44
Basic Elements of GST
Place of supply


To determine whether a supply is made in Malaysia or not
different rules for supply of goods and supply of services
Rules for supply of goods:
Goods treated as supplied in Malaysia


removal from a place in Malaysia to another place in
Malaysia (local supply)
removal from a place in Malaysia to a place outside
Malaysia (export)
B
Malaysia
C
O
A
45
Place of supply of goods
Goods treated as supplied outside Malaysia


removal from a place outside Malaysia to a
place inside Malaysia (import)
removal from a place outside Malaysia to
another
place outside Malaysia (out of
scope)
A
B
Malaysia
C
O
46
Place of supply of services
RULES FOR SUPPLY OF SERVICES
No.
SERVICES
TREATED AS
SUPPLIED
SUPPLIER
BELONGS ?
1.
Malaysia
Malaysia
2.
Another country
Outside Malaysia
47
Place of supply of services
SUPPLIER OF SERVICES BELONGS ?
MALAYSIA
OTHER
COUNTRY
Business / Fixed
Establishment
YES
NO
Usual place of
residence
YES
NO
Business / Fixed
Establishment
YES
YES
Supplier belongs in
Malaysia
Supplier belongs in
Malaysia
Supplier belongs in
Malaysia if the supply
of the business is most
directly concerned with
Malaysia
48
Place of supply of services
Business establishment

Head office or principal place of business
Fixed establishment

A branch or agency through which business is carried
out
Usual place of residence



For body corporate, the place of incorporation or
legally constituted (registered office)
For unincorporated body, the place where centre of
administration is located
For individual, where he sets up home with family
and is in full time employment
49
Time of Supply
Time of supply
• To determine when tax is due and payable on
a supply
Supply of goods or services
• General time of supply rules
 Basic tax point

Goods removed or made available

Services performed
 Actual tax point


Tax invoice issued or payment received before basic tax
point
21 days rule
50
Time of Supply
What happened if invoice issued or payment
received before the ‘basic time of supply’? The
time of supply is...
 at the time of invoice issued
 at the time of payment with regards to supply
whichever is the earlier
1 June
14 June
Tax invoice
issued
24 June
Time of
payment
1 July
10 July
Actual
Time of
supply
1 Aug
Goods
removed or
Services
performed
51
Time of Supply
Time of supply is the date of tax invoice if it is
issued within 21 days after the ‘basic time of
supply’
Actual Time of
supply
Tax invoice issued within 21 days
1 July
4 July
Goods
removed or
Services
performed
24 July
1 Aug
Tax invoice
issued
52
Value of Supply
 Value of supply (consideration in money)
Value = consideration – GST portion
Example: Company A receives payment for logs from Company B =
RM 2,600.
GST rate is 6%
GSGST = Consideration x Tax Fraction
3
GST
= RM 2600 X
= RM 147.17
53
Value of supply = Consideration – GST = (RM2600 - RM147.17)
= RM2452.83
53
Value of Supply
 Value of supply (consideration not in money)
Value = open market value
 Value of imported goods
Value = value for customs duty + any customs
duty paid + any excise duty paid
 Value of imported services
Value = payment made (value as stated in
the invoice)
54
5
55
Registration in GST
www.gst.customs.gov.my
56
Registration in GST
57
Registration in GST
Liability to Register
• Any person who makes taxable supply of goods
and services in Malaysia
• Registration is mandatory for businesses with
turnover that has exceeded the prescribed
threshold
• Calculation of turnover for registration is based
on the total value of the taxable supplies for a 12
month period
• Proposed turnover exceeding RM500,000.00
58
Calculation of Taxable Turnover
Includes
 Standard Rated
Supplies
 Zero Rated Supplies
 Deemed Supplies such
as private use, etc.
Excludes
 Exempt Supplies
 Sale of Capital Assets
 Imported Services
 Out of Scope Supplies
59
Registration in GST
• Liability to register is determined by
 historical turnover (based on turnover of
the current month and the preceding 11
months) or
 future turnover (based on turnover of the
current month and the next 11 months)
• To apply for registration within 28 days
from the end of the relevant month
• Effective date of registration will be on the
1st day of the following month
60
Registration Notification
Historical Method
Liable to register
First day in the
12 months
period
1/9/14
1/8/15
Registration
Date
1/10/15
31/8/15
28 days
8/8/15
28/9/15
1/9/15
Reached amount
of taxable
turnover
(threshold)
Previous 11
months
+
This month
Notification
period
Last day to notify and
registration application
61
Registration Notification
Future Method
Start
business
15/7/15
Registration
Date
Contract signed
8/8/15
1/10/15
28 days
31/8/15
1/8/15
28/9/15
1/9/15
Liable to register
Notification
Period
31/1/16
Last day for notification dan
registration application
Total taxable supply expected to exceed threshold
This month
+
11 months
62
Registration
Future Method (AD 1 April 2015)
Start
business
15/10/14
Expected to reach
threshold (signed
future contract)
Effective date
of registration
16/11/14
1/4/15
28 Days
1/11/14 1/12/14
RM100,000
Liable to
register
28/12/14
Period to
notify
31/10/15
Last day to notify and
apply for registration
Current month + next 11 Months
(RM400,000)
63
Registration On Appointed Date (AD)
Appointed Date (1.4.2015)

If at the end of Nov 2014, the value of taxable supplies for the month
of November is RM100,000

If he reasonably expects his turnover for the next eleven months
(December 2014 to October 2015) to be more than RM400,000

He is liable to be registered for GST within 28 days from the end of the
month of November 2014 (1 December 2014 to 28 December 2014)

The effective date of registration is 1 April 2015 (effective date of GST
implementation)
64
Registration in GST
Voluntary Registration
• Businesses below threshold may apply
for voluntary registration
• Once registered – must remain in the
system for at least 2 years
65
Registration in GST
Other types of registration
 Branches or divisional registration
 Group registration – group of
companies
 Registration for non resident –
appointment of agent
 Joint venture registration – petroleum
exploration activity
66
6
67
Responsibilities and Obligations
•
•
•
•
Issuance of tax invoice
Submission of returns
Payment of tax
Keeping of records
68
Issuance of Tax Invoice
• Types of tax invoice when making
taxable supplies
full tax invoice
simplified tax invoice
69
TAX INVOICE
What is Tax Invoice?
A tax invoice is a document containing certain information about the supply
that has been made and it is similar to a commercial invoice except for some
additional information such as details of registered person and supply, GST
rate and the amount of GST payable.
Importance of a tax invoice:

may trigger the time of supply for a transaction.

primary evidence to support a customer’s input tax claim.

determine when he may claim his input tax.

determine which supplies made by him should be included in a
particular taxable period.
70
TAX INVOICE
Issuance of Tax Invoice
 Tax invoice shall be issued by every registered person who
makes any taxable supply in the course or furtherance of
any business in Malaysia.
 Tax invoice can be issued to the customer either :
 Hard copy
 Electronic
 Must issue within 21 days after supply taken place (Time of
supply).
 Containing prescribed particulars.
71
Tax Invoice – Full Tax Invoice
The following particulars are required in the full tax invoice;
(a) the words “tax invoice” in a prominent place;
(b) the tax invoice in serial number;
(c) the date of issue of the tax invoice;
(d) name of supplier, address and GST identification number;
(e) the customer’s name (or trading name) and address;
(f) a description sufficient to identify the goods or services supplied
(g) for each description distinguish the type of supply for standard rate, zero rate
and exempt, the quantity of goods or the extent of the services and amount
payable, excluding GST;
(h) any discount offered;
(i) the total amount payable excluding GST, the rate of tax and the total
tax chargeable shown as a separate amount;
(j) total amount payable including the GST charged; and
(k) any amounts referred to (i) and (j) must be expressed in Malaysian currency.
72
No. 007
e-Business Sdn Bhd
1000 Jalan Tipu, Bandar Reka
Negeri Sembilan
Supplier,
name,
address &
Identification
number
The words
“tax invoice”
in a
prominent
place
Name and
address of
person being
supplied
(recipient)
Serial number
GST No. : 01234567
No. Tel. : 06-7915566
TAX INVOICE
Invoice Date : 7 th. July, 2015
Invoice to:SYARIKAT ABC
Jalan 5/6, Kelana Jaya
Selangor
Send to:SYARIKAT ABC
Date of invoice
Date
Your Order
Our Order
Sales Rep.
30th. June, 2015
1123
123 ABC
RAMBO
No.
Item
Unit
Description
Discounts
Taxable
Unit Price (RM)
1.
117711
10
2.
117712
100
Total Price (RM)
Box
-
6%
100
1,000
Pencils
-
6%
1000
100,000
Subtotal
101,000
Discount
1,000
Subtotal
100,000
CONFIRMATION BY 30 DAYS
GST 6%
6,000
E.OE SIGNATURE …………………………………………….
Total
Sufficient
description
106,000
The total
amount payable
excluding tax,
the rate of tax
and the total tax
chargeable
shown as a
separate
amount.
The total
amount payable
including the
total tax
chargeable 73
Tax Invoice for Mixed Supplies
Name,
address of
supplier
Tax Invoice No. 00779
TAX
INVOICE
in a
prominent
place
Syarikat Pemaju Hartanah Sdn Bhd
Lot 123, Jalan Meru, 43120 Klang
Selangor
Serialized
tax invoice
number
GST No. : 0001111
GST
Registration
number
No. Tel. : 03-67868686
TAX INVOICE
Invoice Date : 7 th. July, 2016
Name,
address of
customer
Invoice to:SYARIKAT MANA DIA
Jalan 7/7, Ipoh
Perak
Date of
invoice
No.
Description
Quantity
Unit Price (RM)
1.
Shop houses (6% GST)
2
350,000
700,000
2.
Double story terrace
houses (exempt)
10
250,000
2,500,000
Subtotal
Description of
goods supplied
Quantity of goods
Add GST @ 6%
Total Sales
Rate of GST
Total Price (RM)
3,200,000
42,000
3,242,000
……………………………………………………..
SYARIKAT PEMAJU HARTANAH SDN BHD
Total
charge
made
excluding
GST
Total
charge
made
including
GST
74
TAX INVOICE
Tax Fraction

Tax fraction is the GST amount of the consideration.

The calculation of the tax fraction is as follows :

Tax fraction
=
tax rate
x
amount of consideration
100 + tax rate

Example:
Assuming your consideration is RM100.
GST
=
GST rate
x
consideration
x
RM100
100% + GST rate
=
6%
100% + 6%
=
RM5.66
75
TAX INVOICE
Tax Inclusive
 In retail business, it may be more practical to treat the sum of money
received from your customer (consideration) as inclusive of GST.
 The tax invoice should still show the GST as a separate amount, and
you can state the GST inclusive prices and indicate with the words
‘price inclusive of GST’.
Example:
Assume you sell an oven at RM1,000.
GST
= Price x Tax Fraction
= RM1,000 x 3/53
= RM56.60
Charge customer RM1,000 and remit RM56.60 to Customs.
76
TAX INVOICE
Tax Exclusive
 Refers to the amount of GST paid as shown in tax invoice with
separate GST amount.
Example:
Assume you sell an oven at RM1,000.
GST
= Price x Rate of Tax
= RM1,000 x 6%
= RM60
Charge customer RM1,000 + RM60 (GST) = RM1,060
and remit RM60 to Customs.
77
Tax Invoice - Simplified Tax Invoice
Contents of the Simplified Tax Invoice
 name, address and identification number of the supplier
 date of issuance of the invoice
 tax invoice serial no.
 a description sufficient to identify the goods or services supplied
 for each description distinguish the type of supply for standard rate,
zero rate and exempt, the quantity of goods or the extent of the
services and amount payable, excluding GST
 the total amount payable including the total tax chargeable
 the rate of tax and the amount of tax chargeable
 state the word “Price Payable includes GST ”
78
Simplified Tax Invoice
C SERVICES & TRADING
30, Jalan 37, Taman Awam
BANDAR BARU SALAK JAYA
43900 SEPANG
Supplier
Identification
GST REG. 1234-567
Phone : 03-87066078
Fax : 03-87066079
E-mail : [email protected]
CASH SALE
Date of invoice
Invoice No : 11209
Date : 12.11.2015
No.
Item
Units
Description
Unit Price
Total
1
2022
1
Plasma TV Sony 56
inches
8999.00
8999.00
Sufficient
description
Price inclusive of GST 6% (RM509.94)
Price
8999.00
Discount
500.00
Subtotal
8499.00
Total
9008.94
The total amount
payable including
tax
Issued by : juali
79
SIMPLIFIED TAX INVOICE
(TAXABLE SUPPLIES – 2 rates)
Supplier’s name,
address and GST
identification number
AGRO SHOPPING CENTRE SDN BHD
DESA PINGGIRAN PUTRA, SG. MERAB
TEL: 03 – 8896XXXX FAX: 03 – 896XXXX GST Reg. No
…………………
Date: 30/3/2016
15:35:45
Tax invoice
serial number
:
Invoice No: V001619
Date of Tax Invoice
Description
of goods or
services
supplied
BISCUITS PNKL [PACK]
010611
1
3.90
3.90 S
PRINGLES SC 182G [PCS]
001002
1
6.90
6.90 S
SUGAR
123235
2
1.45
2.90 Z
Item Count
Total Sales Inclusive GST @ 6%
Rounding Adjustment
Cash
Balance
Rate of GST
GST analysis
S = 6%
Z = 0%
Print
Salesperson
Goods
10.80
2.90
: 30/3/2016
: Aminah
4
14.35
0.00
15.00
0.65
Tax
0.65
0.00
Indicator for
standard rated
supply
Indicator for zero
rated supply
Total
amount
payable
including
GST
Total amount of
GST charged
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Tax Invoice - Simplified Tax Invoice
For the purpose of claiming ITC :
 the buyer can use simplified tax invoice if the
total amount GST payable is RM30 or less
(GST @ 6%).
 if the total amount GST payable is more than
RM30, the buyer must request for a (full name
& address the recipient).
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Input Tax Credit
Input Tax Mechanism
 Tax paid on inputs to be offset against the output tax in the
relevant taxable period
 Subject to a time limit of 6 years from the date of return
required to be made
 Apportionment rule to apply for a mixed supply
 Refund to be offset against other unpaid GST, customs and
excise duties
 Net tax to be refunded within
 14 working days for on-line submission
 28 working days for manual submission
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Input Tax Credit
Conditions:
 Claimant must be a taxable person
 Must have a valid tax invoice





full tax invoice
simplified tax invoice - claim the input tax up to a limit of RM30.00 if name and address
of recipient is not stated in invoice (GST at 6%)
invoice issued by approved person under Flat Rate Scheme
Customs No 1 /Customs 9 (imported goods)
document to show claimant pays imported services
 Invoice issued under the name of the claimant
 Goods and services acquired are not subject to any input
tax restriction e.g., motorcars
 Good and services are acquired for the purpose of making
taxable supply
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Blocked Input Tax
Blocked input tax
 passenger motor cars including hiring of car
 family benefits
 club subscription fee
 medical and personal accident insurance
 medical expenses
 entertainment expenses for family members and potential
clients except entertainment expenses incurred by a
person who is in the business of providing entertainment.
Input Tax Credit

No apportionment if can attribute wholly to taxable or
exempt supplies
 full input tax if wholly attributable to taxable supplies
 no input tax if wholly attributable to exempt supplies

Apportionment rules
 applicable when goods and services are used for both
taxable and non-taxable supplies
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Input Tax Credit
Inputs
used
Wholly attributable to
taxable supplies
Claim
100% input
tax
Wholly attributable to
exempt supplies
Attributable to both
taxable and exempt
supplies
Cannot
claim input
tax
Apportionment
rules apply
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Apportionment Rules
Mechanism for input tax apportionment
 Turnover-based method as a standard method for
apportioning any residual input
Taxable portion =
Value of taxable supplies
Value of all supplies
 round up or down to the nearest two decimal
places
Input tax claimable = Taxable portion X Residual input tax
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Apportionment Rules
Example:
Taxable supplies = RM300,000
Exempt supplies = RM250,000
Residual input tax = RM8,000
Taxable portion =
RM300,000
RM300,000 + RM250,000
= 54.5454%
= 54.55% (2 decimal places)
Input tax claimable
= 54.55% X RM8,000
= RM4,364
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Submission of Tax Return
INPUT
OUTPUT
Goods (tour,
transportation, car
hire, accommodation)
Services (rental
telephone and
insurance)
Supply of tour
package/hospitality
products
Hospitality
Industry
Tourism services
Utilities
(electricity and
water)
GST on inputs
= Input tax
Claimed
input tax
GST on outputs
= Output tax
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Submission of Tax Return
Taxable Period
• Regular interval period where a taxable person accounts and pays
GST to the government
• To determine at the time when the GST registration is approved
 quarterly basis
 for businesses with annual turnover not exceeding RM5 million
 monthly basis
 for businesses with annual turnover exceeding RM5 million
• A taxable person may apply to be placed in any other category other
than his pre-determined taxable period
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Submission of Tax Return
•
GST returns (GST-03) and
payments must be submitted
not later than the last day of
the month following the end of
the taxable period
•
Electronic filing is encouraged
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Keeping of Records
Records
• Bahasa Malaysia or English
• 7 years
• can be kept in soft or hard copy
• to be kept in principal place of business
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Payment of Tax
Last day to pay tax
• last day of the month following the taxable period
 if last day is a holiday
the following working day
• late payment
 compoundable offence under GST Regulation (item
123) and if still fail to pay, to charge under section 41(6)
and 41(7) GST Act 20XX.
 Fine not exceeding RM50,000 or to imprisonment for a
term not exceeding three years or to both.
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Thank you
SAKENAH BEGUM BT. MD. NAZIR
GST Special Task Force
Royal Malaysian Customs Department
Tel : 03-88822837
Email : [email protected]
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