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Malaysia GST FAQ

Baker Tilly Malaysia Sep 28, 2018

Under the previous administration, Malaysia transitioned from the old Sales and Services Tax (SST) to the existing Goods and Services Tax (GST). Following the Malaysian General Election 2018, the new government decided to abolish the GST and revert to the SST regime. In line with this decision, the government imposed zero rated GST effective 1 June 2018 before transitioning into SST.

We have compiled a list of frequently asked questions about this latest move and what companies should know about it.

 

Q1. I have applied for GST registration but have yet to receive approval, what should I do?
Ans: Pursue the application by contacting the Royal Malaysian Customs Department (“RMCD”), who will continue to process the application.

Q2. I have mistakenly charged and collected GST at a rate of 6% after 1 June 2018. Do I still have to account for the 6% tax collected?
Ans: Yes, GST should be accounted for at the rate of 6%. However, the company may issue a credit note and make an adjustment via its GST-03 return.

Q3. A tax invoice was issued before 1 June 2018 with 6% GST charged. However, the sale, payment and consumption of the goods took place after 1 June 2018. What is the GST treatment?
Ans: GST should be accounted for at the rate of 0%. The company may issue a credit note and make an adjustment via its GST-03 return.

Q4. If GST of 6% is imposed on the importation of goods into Malaysia in respect of taxable supply of goods set at zero rate, can I still claim input tax?
Ans: Yes, the input tax claims are allowed.

Q5. Do I need to submit GST-03 return?
Ans: If you are registered under the GST system, yes. You are still required to submit GST-03 return until further notice.

Q6. The goods were sold to the buyer when the GST rate was still 6%, with the tax invoice issued at the same rate. However, following the change of GST rate from 6% to 0%, payment was received at the rate of 0%. What should the course of action be?
Ans: The buyer is required to pay the 6% GST as the goods were provided to them during the period when 6% GST rate was applicable.

Q7. I have given free services to a connected person (i.e. an officer or director of my business and vice-versa) on or after 1 June 2018. What is the GST treatment and do I need to account for output tax on the free services given?
Ans: In this case, the GST needs to be accounted for at a rate of 0%.

Q8. What is the GST treatment of goods in excess of RM500 given away as gifts ? Do I need to account for output tax?
Ans: Output tax needs to be accounted for at a rate of 0%.

Q9. Are tourists still entitled to claim tax refund?
Ans: Tourists are still entitled to claim the refund of tax under Malaysia’s Tourist Refund Scheme (TRS) on purchases which were subject to GST rate of 6%, subject to the condition prescribed.

Q10. If the tourist makes a purchase when the GST rate charged was 6% and departs from Malaysia when the GST rate was changed to 0%, is the tourist still entitled to claim GST?
Ans: Yes, if the purchase was made within 3 months before the tourist departs from Malaysia.

Q11. Are the public/advance rulings, Director General’s (DG) decisions, industry guidelines and/or policy papers from sectors in relation to GST treatment issued by RMCD still applicable?
Ans: Rulings, decisions and guides are still applicable until further notice.

Q12. I have received a Bill of Demand (BOD) from RMCD for a certain amount of tax to be paid. Do I have to pay the BOD?
Ans: The BOD is still payable.

Q13. What is the GST treatment for deposit payments for the supply of goods and services paid before 1 June 2018, and goods and services supplied after 1 June 2018?
Ans: Deposit payments made before 1 June 2018 are subject to a GST rate of 6% while the balance payments made after 1 June 2018 are subject to zero rate.

 

For more GST-related information please refer to RMCD’s website at www.customs.gov.my or contact Baker Tilly Malaysia tax professionals, Anand Chelliah at anand.chelliah@bakertillymh.com.my or Marcus Tan at marcus.tan@bakertillymh.com.my.

 

DISCLAIMER: All opinions, conclusions, or recommendations in this article are reasonably held by Baker Tilly at the time of compilation but are subject to change without notice to you. Whilst every effort has been made to ensure the accuracy of the contents in this article, the information in this article is not designed to address any particular circumstance, individual or entity. Users should not act upon it without seeking professional advice relevant to the particular situation. We will not accept liability for any loss or damage suffered by any person directly or indirectly through reliance upon the information contained in this article.

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