Transcript Document

“Goods and Services Tax (GST)
Awareness Session for Vendors”
Bangi Golf Resort
5th August 2014
1
Agenda
No. Agenda
Slides No.
1.
Goods and Service Tax (GST) Overview
3
2.
GST Registration
7
3.
5 Important Points for Vendors
8
2
What is Goods and Services Tax (GST)
A broad-based consumption tax on goods and services in Malaysia
 Proposed start date of 1st April 2015
 Sales Tax and Service Tax will be repealed
 Applicable GST rate - proposed to be 6%
 Proposed threshold - RM500,000
 Imposed on money spent, not earned
 Certain goods and services to be exempted
 Transaction based, a multi-stage tax applied at each stage of the production
and distribution process
 Allows offset of input tax against output tax
Page
3
Multi-stage tax collection and payment
Sale price
(Before GST)
Supplier price
= 400
Manufacturer
price = 1,000
GST @ 6%
Supplier
Sale price = 424 (inclusive of GST)
Manufacturer
Sale price = 1,060 (inclusive of GST)
Local consumer
Payment to Manufacturer = 1,060
Page
4
Payment to
GST Authority
By Supplier
Output tax
Less: Input tax
GST payable
24
24
By Manufacturer
Output tax
60
Less: Input tax 24
GST payable
36
GST paid by
consumer
= 60
How does GST work
•
GST is charged on, any taxable supply of goods and services, by a GST registered
person in Malaysia and is called OUTPUT TAX
•
GST is recovered on your purchases used for the purpose of making a taxable
supply in the course or furtherance of business and is called INPUT TAX
Types of supplies
1.
Standard rated
(apply to most goods and services)
Taxable Supplies
Input tax
recoverable
2.
Zero rated
Taxable Supplies
(applicable to exports and sale of essential goods)
3.
Exempt
No GST (Input tax not recoverable)
4.
Out-of-scope
No GST
Page
5
Types of supplies
Page
6
GST Registration
Mandatory Registration
 Vendors who make taxable supplies and annual revenue turnover above
the prescribed threshold (RM500,000.00 per year).
 Registration will be opened 6-month before GST implementation date.
Voluntary Registration
 However, vendors can choose to register voluntarily even though their
annual revenue turnover below the prescribed threshold (RM500,000.00
per year).
Liabilities to register are determined by:
 “Historical Turnover” (based on turnover exceeds the threshold in the
past 12 months); OR
 “Future Turnover” (based on turnover exceeds the threshold within the
future 12 months)
7
5 Important Points for Vendor
To ensure smooth operation of TNB after the GST is implemented, vendor
needs to take note on the followings:
1. Responsibility as
TNB’s GST
registrant vendors
5. Contract
spanning 1st
April 2015
2. Deregistration
5 Important
Points
4. Pricing
3. Tax Invoice
8
1. Responsibility as TNB’s GST Registrant Vendors
 As a GST registered vendor under GST regime, you are entitled to:
o Collect GST (Output Tax) through the sales of goods and services
that you made to your customers.
o Pay GST (Input Tax) on the purchase of goods and services to your
suppliers.
o Pay GST (Input Tax) to Royal Malaysian Customs Department (RMCD)
for the importation of goods into Malaysia.
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1. Responsibility as TNB’s GST Registrant Vendors (continue…)
 Once registered, you are required to submit to TNB the followings:
o GST registration number; and
o GST registration certificate/document as proof of registration.
 This is to allow TNB to record your GST registration number in its
database.
10
2. Deregistration
 Kindly inform TNB if you have deregistered or your GST registration is
cancelled. All with documentary evidences must be provided as well.
 This will allow TNB to change your business entity status in our database
from “GST registered” to “Non-GST registered.
 Once deregistered, you are not allowed to charge GST (input tax) on
supplies made to TNB and also you are not required to issue a tax
invoice/debit note/credit note showing GST components.
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3. Tax Invoice
TAX INVOICE
• A GST registered vendor must provide a valid ‘Tax Invoice’ to TNB.
• The ‘Tax Invoice’ can either be a ‘Full Tax Invoice’ or a ‘Simplified Tax
Invoice’ depending on the value of the supplies but both must be in the
format required by RMCD.
• Both types of ‘Tax Invoice’ will allow TNB to claim input tax credit (ITC).
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3. Tax Invoice (Continue…)
DEBIT NOTE AND CREDIT NOTE
• Debit Note and Credit Note must be issued if the price in a previously
issued ‘Tax Invoice’ has been increased or decreased and the GST charged
previously needs to be adjusted accordingly.
• Under the GST regime a Debit Note and a Credit Note needs to be issued
when the consideration for a previous supply changes.
• All tax invoices, debit notes and credit notes must be in the RMCD
prescribed format.
13
Example of Tax Invoice – “Full Tax Invoice”
14
Example of Tax Invoice – “Simplified Tax Invoice”
Tax Unit
Group Finance Division
15
4. Pricing
Under the GST regime:
 There will be no sales tax or service tax charged on supplies made to TNB by
vendors from 1st April 2015 onwards.
 Savings and/or cost reductions may be passed on by vendors to TNB as you
will save on sales and services tax (if any) from existing contracts with TNB
that straddle 1st April 2015.
 Prices for the same supplies made after 1st April 2015 should be relatively
cheaper as sales and services tax will be abolished and should not form part
of the pricing component.
 You will pay GST on good and services supplied to you and you will seek to
charge GST in your prices for supplies made to TNB from 1st April 2015
onwards.
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5. Contract spanning 1st April 2015
All pre- GST contracts that spanning on/after 1st April 2015 entered into
between the vendors and TNB are treated in the following manner under the
proposed GST Law:
 All contracts that are entered into after 1st April 2013 will be standard
rated.
 All contracts that are entered into before 1st April 2013 with an opportunity
to review will be standard rated after 1st April 2015.
 All contracts that are entered into before 1st April 2013 for a fixed price
with no opportunity to review will be zero-rated for 5 years until 31st
March 2020 or until the first opportunity to review takes place whichever is
earlier.
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