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Understanding GST:

GST shall be levied and charged on the taxable supply of goods and services made in the course or furtherance of business in Malaysia by a taxable person. GST is also charged on the importation of goods and services. A taxable supply is a supply which is standard rated or zero rated. Exempt and out of scope supplies are not taxable supplies. GST is to be levied and charged on the value of the supply. GST can only be levied and charged if the business is registered under GST. A business is not liable to be registered if its annual turnover of taxable supplies does not reach the prescribed threshold. Therefore, such businesses cannot charge and collect GST on the supply of goods and services made to their customers. Nevertheless, businesses can apply to be registered voluntarily. Almost all countries collect income tax, which is a percentage of what you earn as an individual. Another way the government gets revenue is by collecting tax from business operations, like sales tax and duties ...

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Why GST:

The GST hence, reduces the tax burden on producers. The biggest benefit of such a system is that it would contain various indirect taxes currently levied on various participants in the supply chain.

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How Does GST Work:

Businesses making taxable supplies have to be registered under GST if their annual sales turnover has exceeded the prescribed threshold. Only a registered person can charge and collect GST on the taxable supplies of goods and services made by him. GST is charged on the value or selling price of the products. The amount of GST incurred on input (input tax) can be deducted from the amount of GST charged (output tax) by the registered person. If the amount of output tax is more than the input tax in the relevant taxable period, the difference shall be remitted to the Government. However, if the input tax is more than the output tax, the difference will be refunded by the Government.

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What you need to do:

GST requires businesses who have exceeded the prescribed threshold to register and to keep records of input and output tax. Businesses report their liability in a specific period called taxable period. Explore the following sections to understand your responsibilities and obligations as a registrant under GST. * Registering your Business * Issuing Tax Invoices * Accounting for GST * Filing Tax Returns * Input Tax Credit Mechanism * Claiming GST Refunds * Paying GST * Offences * Review and Appeals

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Registering your Business

The first step to being GST-ready is to register for a GST identification number. You need to check whether you are required to register or whether you want to register voluntarily. Persons having businesses with annual sales turnover exceeding RM500,000 are liable to be registered under GST. Persons include an individual, sole proprietor, partnership, company, trust, estate, society, union, club, association or any other organization including a government department or a local authority which is involved in the business of making taxable supplies in Malaysia. The annual sales turnover can be determined based on either: * The total value of taxable supplies of the current month and the previous 11 months, or * The total value of taxable supplies of the current month and the next 11 months. You also need to decide on the type of registration best for your business: * Voluntary Registration * Group Registration. * Divisional/Branch Registration Deregistration You must ap...

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Issuing Tax Invoices

When you charge GST, you need to issue a tax invoice showing the amount of GST and the price of the supplies separately. The tax invoice has to be issued within 21 days after the time of the supply. Particulars to be shown in the tax invoice: * The words 'tax invoice' in a prominent place; * The invoice serial number; * The date of issuance of the invoice; * The name (or trade name), address and GST identification number of the supplier; * The name and address of the recipient of the supply; * A description of the goods and/or services supplied; * The quantity or volume of the goods and/or services supplied, for example, litres of petrol, kilos of meat or hours of labour; * Any discount offered; * 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. * The Director General of Customs may upon request allow the tax invoice to be Varied from the abo...

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Accounting for GST

Basically, all taxable persons will be required to account for GST based on accrual (invoice) basis of accounting i.e. all output tax and input tax are to be accounted and claimed based on the time when the invoice was issued or received. However, certain categories of taxable persons may be allowed to use the payment (cash) basis of accounting. This facility may be given to businesses who carry out their activities solely on a cash payment basis. All business and accounting records relating to GST transactions are to be kept in Bahasa Melayu or English for a period of seven (7) years.

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Filing GST Returns

GST returns must be submitted to the GST office not later than the last day of the following month after the end of the taxable period. Taxable period is a regular interval period where a taxable person is liable to account and pay to the government his GST liability. The standard taxable period is on quarterly basis. However, a registrant may apply to be placed in other taxable period (monthly or 6 monthly) subject to specific conditions as follows:

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Input Tax Credit Mechanism

Businesses have to charge and collect GST on all taxable goods and services supplied to the consumers. Only businesses registered under GST can charge and collect GST. Businesses are allowed to claim whatever amount of GST paid on the business inputs by offsetting against the output tax. * The excess amount of output tax shall be remitted to the government within the stipulated period. * In the case where the amount of input tax cannot be fully recovered, businesses can make a claim for refund from the government. Note: * Maximum time period to claim the input tax is 6 years from the date of supply. * Input tax credit cannot be claimed on blocked input such as GST paid on passenger motor car, club subscription fee, medical and personal accident insurance premium, medical expenses, family benefits, entertainment expenses except for employees & etc. * Apportionment rules have to be applied when the taxable person makes a mixed

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Claiming GST Refund

Any refund of tax may be offset against other unpaid GST, customs and excise duties. Refund will be made to the claimant within 14 working days if the claim is submitted online or 28 working days if the claim is submitted manually.

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Offences

Penalties may be imposed if the following offences are committed: * Any deficiency on the net tax payable. * No GST return is made. * A GST return is submitted without payment or a lesser payment; * Any refund paid to which there is no proper entitlement. * Failure to register.

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Paying GST

If your output tax exceeds the input tax, the difference shall be remitted to the Government together with the GST returns not later than the last day of the following month after the end of taxable period. Online payments through: * Banks (to be appointed). * Internet facilities. * Manual payment: * Payment via cheque/bank draft/money order must be made payable to 'Ketua Pengarah Kastam' and mail to: Ketua Pengarah Kastam Malaysia Jabatan Kastam Diraja Malaysia Kompleks Kastam Kelana Jaya No.22 Jalan SS6/3 Kelana Jaya 47301 Petaling Jaya, Selangor OR * Pay at any nearest GST office counter from 8.00 am - 5.00 pm.

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Review and Appeals

Any person who is aggrieved by the decision of the officer of GST may apply for a review and revision to the DG within 30 days from the date of notification. Alternatively, such person shall make an appeal to the Tribunal within 30 days from the date of the decision. The appeal case can be represented by the taxpayer himself or by any person whom he may appoint. The hearing shall be conducted in a private proceeding unless both parties agree to an open court. Standard rated Supplies: Standard-rated supplies are goods and services that are charged GST with a standard rate. GST is collected by the businesses and paid to the government. They can recover credit back on their inputs. If their input tax is bigger than their output tax, they can recover back the difference. How GST is charged at each level of supply chain standard rated supply :

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GST Treatment on Government Services

Supplies made by the Government are generally treated as out of scope supplies. No GST will be imposed on the supply made by the Federal Government and State Government such as health-care services provided by hospital and clinic, education services by primary and secondary school including tertiary education, issuance of passport by the Immigration Department, issuance of licences and permits by the Road Transport Department and etc. Rationale:- * To meet social obligations and economic objective of the Government. * To maintain status quo on the provision of Government services. Government supplies subject to GST Specific supplies such as water supply by the State Government and advertising services by RTM will be subjected to GST due to the commercial nature of these services. Supplies by Statutory Bodies and Local Authorities Supplies made by Statutory Bodies and Local Authorities will be subject to GST except supply in respect of its regulatory and enforcement funct...

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What benefits that GST can offer to Malaysian consumers and businesses?

Improved Standard of Living: The revenue from GST could be used for development purposes for social infrastructure like health facilities and institutions, educational infrastructures and public facilities to further improve the standard of living. Lower Cost of Doing Business: Under the current system, some businesses pay multiple taxes and higher levels of tax-on-tax (cascading tax). With GST, businesses can benefit from recovering input tax, thus reducing cost of doing business. Nation-Building: GST is a better and more efficient method of revenue collection for the government. More funds can be channeled into nation-building projects for progress towards achieving a high income nation. Fairness and Equality: With the GST, taxes are levied fairly among all the businesses involved, whether they are in the manufacturing, wholesaling, retailing or service sectors. Enhanced Delivery System: GST will be administrated in a fully computerized environment, therefore speedin...

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GST Guidelines On Tourist Scheme - Introduction

This Industry Guide is prepared to assist you in understanding the Goods and Services Tax (GST) and the related Tourist Refund Scheme (TRS). This guide will explain to you: As a tourist visiting Malaysia, how to claim a refund of GST paid on eligible goods purchased from an Approved Outlet As a business, the conditions and eligibility requirements to become an Approved Outlet

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Overview Goods and Services Tax (GST) - On Tourist Scheme 

GST is a multi-stage tax on domestic consumption. GST is charged on all taxable supplies of goods and services in Malaysia except those specifically exempted. GST is also charged on the importation of goods and services into Malaysia. Payment of GST is made in stages by the intermediaries in the production and distribution process. Although the tax is paid throughout the production and distribution chain, it is ultimately passed on to the final consumer. Therefore, the tax itself is not a cost to the intermediaries and does not appear as an expense item in their financial statements. In Malaysia, a person who is registered under the Goods and Services Tax Act 2014 is known as a GST registered person. A GST registered person is required to charge output tax on his taxable supply of goods and services made to his customers. He is allowed to claim input tax credit on any GST incurred on his purchases which are inputs to his business. Thus, this mechanism would avoid double taxation ...

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Overview Of Tourist Refund Scheme

Common features and the main key players under the TRS are: TRS is a scheme that allows tourists to claim GST paid on eligible goods purchased in Malaysia. The tourist can then claim a GST refund from an Approved Refund Agent on the eligible goods purchased from an Approved Outlet when the tourist leaves Malaysia by air mode from one of the 8 international airports in the scope of the TRS. Tourists classified under the TRS are foreign tourists who are eligible to claim GST refunds and who hold a valid international passport. An Approved Refund Agent is an agent appointed by the Malaysian Government through tender, who processes and refunds GST refund claims made by outbound tourists. The Approved Refund Agent may charge an administrative fee for processing the GST refund. Any fee chargeable will be made known to the tourist when they purchase eligible goods from an Approved Outlet. The GST treatment on services of the Approved Refund Agent are zero rated because the services...

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Conditions For Refund Of GST Under Tourist Refund Scheme By Foreign Tourist

A tourist shall be entitled to the refund of GST under the TRS if s/he satisfies the following conditions: a) S/he is neither a citizen nor a permanent resident of Malaysia and holds a valid international passport. b)S/he is a foreign diplomat leaving the country after completion of service in Malaysia and is in possession of a document from the relevant diplomatic or consular mission stating that s/he is permanently leaving Malaysia. c)S/he is not nor has been employed in Malaysia at any time in the 3 months preceding the date of purchase of the eligible goods. d) S/he departs Malaysia by means of air transportation from one of the 8 international airports in the scope of the TRS. e) S/he is not a member of the cabin or flight crew of the aircraft on which s/he is departing out of Malaysia. f) S/he must have purchased the eligible goods within 3 months prior to the date of departure. g) S/he must spend at least three-hundred Malaysian Ringgit (MYR300) (GST inclusive) at the s...

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Goods Not Eligible for GST Refund under the Tourist Refund Scheme

You may claim refund on the GST charged and paid on goods purchased from an Approved Outlet, except for the following: * Wine, spirits, beer and malt liquor * Tobacco and tobacco products * Precious metal and gem stones * Goods wholly or partially consumed in Malaysia (except for clothing/tax invoices to be maintained) * Goods which are absolutely prohibited from export under the written law * Goods which are not taken out as accompanied (hand carried) or unaccompanied (checked-in) luggage.

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Manner/ Procedure for Claiming a GST Refund by a Tourist at an Approved Outlet

A tourist claiming a GST refund under the TRS must comply with the following requirements at the time of purchase of the eligible goods at the Approved Outlet: * Show the tourist’s own original valid international passport to the sales assistant/cashier at the Approved Outlet to prove eligibility for a GST refund under the TRS. * Get an original tax invoice or receipt for the eligible goods purchased. * Get an original refund form from the sales assistant/cashier at the Approved Outlet and ensure that the refund form is completed correctly. The refund form should contain the following particulars: * Tourist’s name * Tourist’s passport number * Tourist’s country of residence * Date of arrival in Malaysia * Intended date of departure from Malaysia * Date of purchase of the eligible goods * Tax invoice or receipt number for the eligible goods * Description and quantity of the eligible goods purchased * The total amount paid for the eligible goods, inclusive of GST, the tota...

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Manner/ Procedure for Claiming GST Refund at a Malaysian International Airport

The tourist should be ready to present the tax invoice or receipt, the completed original refund form and the eligible goods for export to an RMCD Officer for verification at the GST Customs Refund Verification Counters prior to departure from Malaysia. The GST Customs Refund Verification Counters are located landside (before check in for unaccompanied luggage) and airside (after immigration control for accompanied luggage) at each of the 8 international airports in scope of the TRS. The tourist should also provide the RMCD Officer with: * The Tourist’s original international passport and * The Tourists Boarding pass or confirmed air ticket (as proof of departure) * The goods purchases (if jewellery in sealed plastic bag) * The tax invoice GST The Approved Refund Agent’s counters will be located either landside or airside, or both, at each airport. Where there is no Approved Refund Agent counter airside, a mailbox will be provided to allow the tourist to post their GST Re...

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Conditions And Eligibility Of Approved Outlet Under Tourist Refund Scheme

In order to participate in the Tourist Refund Scheme in Malaysia, a Merchant must:- * Be registered for GST and hold a valid GST registration number * Be approved by the Royal Malaysian Customs Department to participate in the scheme * Be affiliated by the Approved Refund Agent * Be equipped by the Approved Refund Agent with the solution to issue TRS transactions to eligible tourists * Provide a GST Refund Form to eligible tourists who wish to claim refund of GST under Tourist Refund Scheme using the solutions provided by the Approved Refund Agent * Account for tax on a monthly period * Sell eligible goods * Not sell non-taxable goods/non tax refundable goods like liquor, cigarettes, tobaccos, tobacco products, gems stone and precious metal under the scheme * Charge GST at standard rate on taxable goods sold to foreign tourists * Issue tax invoices which indicate the cost of the goods as well as the amount of GST charged

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Appointment of Approved Outlet - On Tourist Scheme 

In order to be appointed as Approved Outlets the merchant will have to undergo the following procedure: * Merchant/Outlet- Register Outlet Details via Outlet Registration Portal * IGB (Iris Global Blue) Outlet Registration Portal/ IGB Sales Staff- Capture Outlet Details and send to GenTax Portal For Approval. If Outlet Approved will install and activate issuing solution at outlet. * GenTax Portal/Royal Malaysian Customs Department Officer (RMCD) – Review Outlet Details and approve or reject. Send approved/reject response to Outlet Registration Portal. Further explanation on appointment of Approved Outlet, please refer to http://business.globalblue.com/my_en/

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Mechanism For Jewellery/Article of Jewellery Under TRS

Jewellery merchants who become Approved Outlet under TRS will have to adopt the following mechanism: * Minimum purchase of jewellery (gold, platinum, silver) of RM300 (GST inclusive) is eligible to claim refund of GST under TRS * All Approved Outlets selling jewellery will be provided with custom approved security bag with serial number. Security bag to be provided by Federation of Goldsmiths And Jewellers Association of Malaysia (FGJAM) * Every purchase made by tourist will be sealed in security bag with serial number together with the tax invoice clearly showing weight, quantity, density, amount and serial number of the bag before tourist leave the Approved Outlet * Approved Outlet will charge GST to the tourist and tourist will later claim refund of GST under TRS from the Approved Refund Agent * Tourist departing from all Malaysian Airport (Second Schedule- Regulation 81 (GST Regulations 2014) will show the security bag to RMCD at the GST Refund Verification Counter. R...

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Notification Regarding Duty / Tax On A Car Imported by Student

1. All students who want to bring back the vehicle will be subject to import duties / customs tax. 2. Rate of duty / tax imposed on imported vehicles is high. Therefore the amount of duty / tax payable is also high. 3. Students are advised to make appropriate consideration before bringing the vehicle for duty liability / high taxes must be paid before the release of the vehicle by the customs authorities. 4. Estimated by the Customs Officer will take into account all deductions that are eligible as depreciation according to the age of the vehicle and discounts based on length of use of the vehicle abroad. 5. Legal Department does not provide for discretion to give what extra discounts other than those prescribed by the rules of valuation. Therefore any reduction in the tax appeal will not be considered by the department. 6. For further information, please contact the Customs Call Center at telephone number 03-7806700 or e-mail to ccc@customs.gov.my or near the Customs Office.

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Importation of Electrical Goods

Importation of electrical goods for domestic use as listed under Item 24, Fourth Schedule of Customs (Prohibition of Imports) Order 1998 are subjected to approval certificate issued by the Chief Executive Officer, Malaysian Energy Commission (MEC). Objective: This notice is issued to explain to the public regarding the electrical goods importation guideline for domestic use. Current Procedure Importation of electrical goods can be done in two ways: Without MEC Approval Certificate requirement. With MEC Approval Certificate requirement. 1. Importation without MEC Approval Certificate requirement. a)Importation without MEC Approval Certificate requirement is allowed following these situations: i) Used electrical goods for domes​tic use brought in by persons transferring / relocating to Malaysia; ii) Electrical goods for domestic use brought in by passengers by air. b) For importations such as the above, importers are required to complete 3 copies of Form A an...

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Foreign Diplomatic and Consular Privileges Serving in Malaysia

What is meant by the Foreign Diplomatic and Consular Privileges Ordinance on Diplomatic and Consular 1957 and the Diplomatic Privileges (Vienna Convention 1966) allows Legation (High Commission / Embassy / Consulate General / Consulate) and staff Legation (officials of the diplomatic and non-diplomatic countries concerned) and agencies international import or buy from a bonded warehouse or excise warehouse without payment of duty / tax. Forms of privileges granted a) Import or buy goods from a bonded warehouse / warehouse without paying excise duty / tax during the term of office in Malaysia; and b) imports made on behalf of the diplomatic staff is not opened for inspection except reasons which are necessary by senior customs officer. Who is eligible to enjoy this benefit: a) Diplomatic (High Commission / Embassy / KonsulatJeneral / Consulate) and the personnel of a citizen of the State may be commissioned and placed in a holding diplomatic passports and has CARD OF COLORED...

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Guideline for bringing into Malaysia Human Corpses or Urns Containing Human Ashes

Human corpse or urn containing human ash of a Malaysian citizen who passed away outside Malaysia can be brought into Malaysia under the following procedures: Procedure to bring back a human corpse of Malaysian citizen is as follows: 1.The “spouse/member of family/friend/agent approved by member of family” of the deceased is required to obtain a permit from the Ministry of Health, Malaysia to import a human corpse. Any enquiry on such permit can be submitted to the nearest District Office of Health or through the official website of the Ministry of Health at http://www.moh.gov.my 2.Human corpse to be brought into Malaysia will be verified by the Health Officer from the Ministry of Health at the entry point before it is released. 3.Other supporting documents required are: * Airway Bill / Manifest / Train Load List (whichever is relevant). * Letter of release from the airport/port operator (via air / sea only) Procedure to bring back an urn containing human ash of Malaysian c...

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User Acceptance & Delivery Parcel Post via Pos Malaysia (PMB)

Receive and send postal packages can be made in the Mail & Courier Kuala Lumpur International Airport (PMK KLIA) and at any Pos Malaysia Berhad (PMB) which has a Customs office for processing Customs clearance of postal items according to specific zones, for the e-mail received or sent as postal items through the mode of land, sea and air. Acceptance by air parcel post with duty / tax worth more than RM1,000.00 (CIF) must be declared on Customs Form No. 1. For goods valued at more than RM500.00 (CIF) and less 1000.00 (CIF) estimated duty / tax is made up JK78. Acceptance by air parcel post which is not taxable worth more than RM 2,000.00 (CIF) must be declared on Customs Form No. 1. Acceptance of parcel post by sea and land valued at more than RM 200.00 (CIF) must be declared on Customs Form No. 1. For goods worth RM 200.00 less. Conventional duty / tax is made up JK78. Procedures to receive and send postal packages are as follows: * Receiving parcel post * Send parcel post ...

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