Updates On Indirect Tax: Goods and Services Tax & Service Tax

We would like to inform that the Royal Malaysian Customs Department (RMCD) has uploaded the following in the website, MySST recently:-

Subject	Date of Publication	Objective & Salient Points
FAQ Pertaining to GST Refund [available in Malay language only click HERE]	16 June 2020	The RMCD has on 16 June 2020 published the FAQ Pertaining to GST refund [“the GST FAQ”]. The salient points extracted from the GST FAQ are as follows:- Where there is a change to the registration details of GST of a GST registrant such as address of office premises, phone number, bank information and etc., the GST registrant is required to update the relevant information in Taxpayer Access Point [“TAP”]. All applications for GST refund will be subject to verification (i.e. desk review), audit or investigation. Any refund of the GST overpaid will be made within 6 years from 1 September 2018. A registered person may use bank guarantee [“BG”] as an alternative to request RMCD to expedite the processing of the balance of the GST refundable prior to completion of GST audit. The application for BG and letter of undertaking can be made via email: bgrefund@customs.gov.my.
Notification of GST Refund [available in Malay language only click HERE]	16 June 2020	The RMCD has on 16 June 2020 published the Notification of GST Refund [“the Notification”]. For the purpose of expediting the GST refund during/post MCO period, the RMCD will be adopting “pay first, audit later” approach for selected companies as summarised below:- For any claim of GST refund less than RM100,000 The GST refund will be made upon completion of verification process (i.e. desk review). However, the company or claimant will still be subject to GST audit at any time within 6 years from 1 st September 2018. For any claim of GST refund amounted to RM100,000 and above The GST refund will be made if the company or claimant passes the risk assessment review and verification process (i.e. desk review). However, the company or claimant will still be subject to GST audit at any time within 6 years from 1st September 2018. In the event that the company or claimant fails the risk assessment review, the GST refund will not be made until field audit is completed. However, for the purpose of easing the company’s cash flow, the GST refund may be made in full if the following conditions are satisfied:- The verification process (i.e. desk review) is passed; A letter of undertaking declaring that all the information furnished are correct and that any tax (both GST and penalty) underpaid will be made good to RMCD; and A BG at the rate of 10% based on the total GST refundable as at 1st January 2019 is furnished. Upon completion of the field audit, the BG will be returned to the taxpayer after verifying that the company does not have any tax underpaid.   Companies that have yet to receive the GST refund can access the TAP or contact the nearest RMCD office to check on the status of the GST refundable and any information requested by the RMCD.
Service Tax Policy No. 9/2020 (Amendment No. 1) [click HERE]	17 June 2020	The RMCD has on 17 June 2020 published the Service Tax Policy No. 9/2020 (Amendment No. 1). The amendment is made subsequent to the Short-Term Economic Recovery Plan [“PENJANA”] announced by our Prime Minister on 5 June 2020. The amendments are in relation to the following exemptions:- ·        the service tax exemption for hotel related services will be extended from 31 August 2020 to 30 June 2021; and ·        the tourism tax will also be exempted from 1 July 2020 to 30 June 2021.
FAQ Pertaining to PENJANA [available in Malay language only click HERE]	30 June 2020	The RMCD has on 30 June 2020 published the FAQ Pertaining to PENJANA [“the PENJANA FAQ”]. Please refer to the PENJANA FAQ more information.
Specific and Industry Guides		The RMCD has published the following guides:-
	1 July 2020	Guide on Transmission and Distribution of Electricity Services dated 1 July 2020 [click HERE];
	13 July 2020	Guide on Information Technology Services dated 13 July 2020 [click HERE];
	13 July 2020	Guide on Refund on the Acquisition of Services by Foreign Missions and International Organisations dated 13 July 2020 [click HERE]; and
	29 July 2020	Guide on Digital Services by Foreign Service Provider (FSP) dated 1 August 2020 [click HERE].

We will keep you updated on any further guidelines and announcements to be issued by the Royal Malaysian Customs Department or other relevant authorities, if any.

Transitional Rules

https://mysst.customs.gov.my/SpecificGuides

NO	LIST OF SALES & SERVICE TAX SPECIFIC GUIDES	DATE OF UPDATE
1.	Customs Ruling	26/08/2018
2.	Sales Tax Registration	25/08/2018
3.	Service Tax Registration	25/08/2018
4.	Transitional Rules	24/08/2018

SST Registration

If you are a GST Registrant, please click here (https://sst01.customs.gov.my/account/inquiry) to check whether you were automatically registered as taxable person. A "taxable person" means "means a registered person or a person who is liable to be registered" under the Sales Tax Act 2018 or Service Tax Act 2018.

Automatic registration is based on the MSIC (Malaysia Standard Industrial Classification) code registered with Customs under the Goods and Services Tax. If you are a taxable person but not not automatically registered, please register yourself here:

Sales Tax Registration (https://sst01.customs.gov.my/account/register-license/1)
Service Tax Registration (https://sst01.customs.gov.my/account/register-license/2)

GST Guides

The Royal Malaysian Customs updated a number GST Guides, please visit:

General Guides http://gst.customs.gov.my/en/rg/Pages/rg_gg.aspx
Industry Guides http://gst.customs.gov.my/en/rg/Pages/rg_ig.aspx
Specific Guide http://gst.customs.gov.my/en/rg/Pages/rg_sg.aspx

Tribunal rules 28 Boulevard soho units GST exempt

Source: The Malaysian Insider

http://www.themalaysianinsider.com/malaysia/article/tribunal-rules-best-boulevard-soho-residential-units-exempt-from-gst

Tax Deduction for GST Payments

Are blocked input taxes allowable for tax deduction?  What about a GST registered person who forgoes his rights to claim input tax credit? These are the two common questions asked.

Finance Bill 2015 seeks to amend section 39 of the Income Tax Act, 1967 by stating:

• that any amount paid or to be paid in respect of goods and services tax by a person is not allowed as a deduction if he is liable to be registered under the Goods and Services Tax Act 2014 and has failed to do so, or if he is entitled under that Act to credit that amount of tax as input tax, and 
• that any amount of output tax paid or to be paid under the Goods and Services Tax Act 2014 which is borne by a person who is registered or liable to be registered under the GST Act is not allowed as deduction under the Income Tax Act.

These amendments have effect for the year of assessment 2015 and subsequent years of assessment.

GST Updates October 2015

Bad Debts Relief

Budget 2016

Budget 2016 Highlights

Finance Bill, 2016

Budget Speech and Summary

GST Updates July 2015

Deadline extended for quarterly filing cases

DG's Decision Amendments 4 2015 (13.07.2015)

DG's Decision 06/2015 (07.07.2015)

DG's Decision 07/2015 (27.07.2015)

Guide on Approved Trader Scheme (revised as at 24 July 2015)

Tertiary (revised as at 10 July 2015)

Supply (revised as at 14 July 2015) 

GST-03 Returns and Payment Guide

Furnishing of Returns

Payment of GST

Guide on GST-04 Online submission (Non-Registrant Declaration)

GST-03 Return

Form

Download your Goods and Services Tax Return form here for manual submission:

http://gst.customs.gov.my/en/rg/SiteAssets/gst_forms/revised/GST%2003%20-%20GOODS%20AND%20SERVICES%20TAX%20RETURN.pdf

Understanding GST Tax Codes - Part 10

This is the last recommended 3 tax codes 

RS

Supplies which are supply given relief from GST. Example supplies of goods to schools, supply of wheelchairs to private charitable entity for persons with disability.

P.U.(A) 273 - Goods and Services Tax(Relief) Order 2014
​P.U.(A) 59 - Goods and Services Tax (Relief)(Amendment) Order 2015 

Understanding GST Tax Codes - Part 9

Deemed Supply - DS

Goods supplied without consideration attracts GST. For example, goods removed from business for own consumption or private use by a business owner is deemed to have supplied by the business to the owner. Private use of business assets will also attract GST. Gifts below RM500 are not subject to this rule.

Understanding GST Tax Codes - Part 8

Exempt supplies ES

Use ES43 for provision of services which are exempted from GST.

Download GST (Exempt Supply) Order 2014 here

Understanding GST Tax Codes - Part 7

The next few parts of this series cover tax codes for supplies of goods and services.

SR

Standard rated goods and services supplied by a registered taxable person. This is also known as output tax.

Understanding GST Tax Codes - Part 6

Let's look at the last 3 tax codes for supplies, TX-E43, TX-N43 and TX-RE which only applicable to GST registered trader that makes both taxable and exempt supplies (or commonly known as partially exempt trader)

TX-E43

Purchase with GST incurred directly attributable to incidental exempt supplies.

Understanding GST Tax Codes - Part 5

GP (Group) and AJP (Adjustments for Purchases)

GP

Purchase within GST group registration, purchase made within a Warehouse Scheme etc.

Understanding GST Tax Codes - Part 4

Purchase of exempt supplies and purchase of goods outside the scope of GST

EP

Purchase of exempt supplies such as toll, public transportation, medical etc.

Description	Dr.	Cr.	Tax Code
Expenses - exempted supplies	Taxi		EP
		Cash

OP

Purchase of goods outside the scope of GST.  Example, purchase of goods from overseas but the goods were sold directly to a customer outside of Malaysia. You are not entitled to claim input tax credit for any VAT or GST charged by the overseas supplier, if any.

Other examples are purchase of a business and transferred as a going concern .

Description	Dr.	Cr.	Tax Code
Purchases - Out of Scope	Purchase		OP
Overseas purchase but delivered to a		Trade Payables
country outside Malaysia

Over to you ..... please send us your thoughts and feedback.

Next: 

Previous: Understanding GST Tax Codes - Part 3

Understanding GST Tax Codes - Part 3

Part 3: Purchase of goods under special schemes and blocked input tax

IS

Use this this tax code only if you have been granted approval under Approved Trader Scheme (ATS) and Approved Toll Manufacturer Scheme (ATMS). Under these schemes, GST will suspended when the approved trader imports goods into Malaysia. These two schemes are designed to ease the cash flow of traders who have significant imports.

Understanding GST Tax Codes - Part 2

Part 2: Purchase of imported goods and zero-rated purchase

ZP

Goods and services purchased from GST registered suppliers which were zero-rated.