GST

GOODS & SERVICES TAX
(GST)
7222014
Malaysia Offices: Ipoh, Klang, Kuala Lumpur, Melaka, Batu Pahat, Johor Bharu
International Offices: Singapore, Shenzhen, Guangzhou and Hong Kong
One Stop Professional Centre
Contents
Overview of GST
Scope and Charges of GST
GST Registration
Tax Invoices and Records Keeping
Accounting Basis
Taxable Periods
ContentsContd

Bad Debt Relief
Repayment of Input Tax
Input Tax Credit
Blocked Input Tax
Others e.g. gifts, sample, consignments etc.

Transitional issues
Overview of GST
Broad based
Multi-stage
Consumption tax
Tax on final consumption
Collecting through a credit system
Self monitor system
Transparent systems
GST
Materials supplier
Cost
+
GST
Selling
Price
GST Output
Tax (6%)
100
106
106
300
18
318
(6)
12
318
500
30
530
(18)
12
530
600
36
636
(30)
Total
[A]
GST
Net GST
Input Payable
Tax
[B]
[A] [B]
Manufacturer
Wholesaler
Retailer
Consumer
36
636
Final consumers pay

GST
RM 36
Onethe
Stop
Professional
Centre
Overview of GSTContd

Sales Tax and Services Tax (SST)

6% & 10%
Goods And Services Tax (GST)
Proposed rate : 6%
Scope of tax
Any taxable supply of goods & services
Made in the course or furtherance of any business
By a taxable person
In Malaysia

Importation of goods & services into Malaysia

SUPPLY
TAXABLE SUPPLY
STANDARD-RATED
(6%)
EXEMPT
ZERO-RATED (0%)
Listed under the

Goods and Services
Tax (Exempt
Supplies) Order 20xx
Listed under the Goods and

Services Tax (Zero Rate
Supplies) Order 20xx
Types of GST
Types of supply
Output tax
Input tax
Standard-rated
6%
Claimable
Zero-rated
0%
Claimable
Exempted
No GST charged
Not claimable
10
Zero Rated Supplies

Zero-rated supplies
To consumer - complete relief from GST
agriculture products, eg rice, paddy

foodstuff rice, sugar, salt, flour, cooking oil
livestock eg cow, goat
poultry eg chicken, duck
fish, shrimps, prawns
1st 200 units of electricity to domestic household

supply of treated water to domestic consumers
Malaysian products and services more competitive abroad
exports of goods and services

11
Exempt Supplies
Exempt supplies
To consumer reduce tax burden

domestic transportation public transport
toll highway
residential property
education services
childcare services
healthcare services
financial services
Funeral, burial and cremation services
12
Time of Supply (TOS)
Refers to the time when the supply is recognised

TOS determines when a taxable person should account for GST
Basic Tax Point

Actual Tax Point
1 June
26 June
1 July
10 July
ToS
SUPPLY
ToS
Basic Tax point
Taxable Period
Actual Tax point
Taxable Period
13
Time of Supply RuleContd

Basic Tax Point
Basic tax point for supply of goods
The time when goods are removed;
The time when goods are made available;
Basic tax point for supply of services

When the services are performed
14

Events before basic tax point
Where before the basic tax point
When the payment or part payment is received or tax
invoice is issued,
TOS shall be to the extent covered by the invoice or
payment

Treated as taking place at the time invoice is issued or

payment is received, whichever is the earlier

15

Scenario: payment or invoice before basic tax point
TOS
1
Jan
Ordered
20
Mac
Payment
9
Apr
Invoiced
10
Mei
Basic tax
point
The ToS is treated as taking place at the earliest of the following events:

Date when a tax invoice is issued
Date when payment is received
The time of supply is Date of payment received on 20 Mac
16

Actual Tax Point - 21 days rule
- 21
If tax invoice is issued within 21 days after the
basic tax point, then time of supply is the time
the tax invoice is issued
21
17

Illustration of 21 days rule 21
TOS
1
Jan
Ordered
20
Mac
Goods
delivered

9
Apr
10
July
Tax
Received
invoice
payment
issued

18

1 Jan
1 Mac
ToS
Ordered
Goods
1,060
Part
Payment
Received
20 Mac
9 Apr
ToSInvoice
Goods
delivered
Paid
RM 500
Issued
10 July
Balance
payment
received
Paid
RM 560
Note : the price above inclusive 6% GST 6%

19
GST REGISTRATION
20
GST Registration
Mandatory Registration
Any person who makes taxable supply of goods and
services in Malaysia
Registration is mandatory for business whose taxable
turnover has exceeded the prescribed threshold of
RM500,000
Calculation of taxable turnover for registration is based
on total value of taxable supplies for 12 months period

RM 500,000 (12
21
GST RegistrationContd

Persons include -- Individual
sole proprietor
Partnership
Company
Trustee
Society
trade union , club , association
22

Determination of taxable turnover
includes :
Standard rated supply
Zero rated supply (includes goods exported)
Deemed supply (private use of business assets, business gift more
than RM500, etc.)
RM 500
Supplies of capital assets
Supplies of imported services
Disregarded supplies made within / between designated areas (DA)
23

Who is not required to register ?
Any person -- Making exempt supply

Making out of scope supply
Making supply in designated area i.e. Langkawi,
Labuan and Tioman
24
Who Should Register to GST ?

Are you carrying a
business
NO
Is your supply is
Taxable
Does your Taxable

Turnover
RM500,000
RM500,000 ?
Required to register
to GST
NO
NO
May Register
Voluntarily
At least
maintain 2
years
25

Offence & penalty
Failure to register
Fine not exceeding RM50,000
RM50,000
Imprisonment not exceeding 3 years

or both

26
TAX INVOICE
27
TAX INVOICE
What is a Tax Invoice?

document containing certain information about
the supply that has been made
some additional information
such as details of registered person and supply, GST
rate and the amount of GST payable

28
TAX INVOICEContd

Importance of tax invoice :
May trigger the time of supply for a transaction
Primary evidence to support a customers 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
29
TAX INVOICEContd

Issuance of Tax Invoice
shall be issued by every registered person
makes any taxable supply
in the course or furtherance of any business in
Malaysia
shall issue within 21 days after supply has taken place

21
Containing prescribed particulars

30
TAX INVOICEContd

Types of Tax Invoice
The issuance of tax invoices can be classified
as follows:
Tax Invoice:
Full tax invoice

Simplified tax invoice
31
TAX INVOICEContd

Full Tax Invoice
A full tax invoice should have the following particulars:
1) The words tax invoice in a prominent place
2)
tax invoice
The tax invoice serial number
3)
The date of issue of the tax invoice
4)
Name of supplier, address and identification number of the supplier
5)
GST
The customers name (or trading name) and address
6)
A description sufficient to identify the goods or services supplied
32
TAX INVOICEContd

Particulars of a full tax invoice (cont..)

7)
For each description, distinguish the type of supply for zero rate,
standard rate and exempt, the quantity of the goods or the extent of
the services supplied and the amount payable, excluding tax
8)
Any discount offered
9)
The total amount payable excluding tax, the rate of tax and the total
tax chargeable to be shown separately
10) The total amount payable inclusive of the total tax chargeable
11) Any amount referred to in (i) and (j) must be expressed in Ringgit
33
Customers
name &
address
Suppliers name, address and

GST identification number
Tax Invoice serial number
KILANG KASUT SEDAP PAKAI SDN.BHD.

Lot 123, Jalan Meru, 43210 Klang, Selangor
(GST ID No : 100001/2009)
Tel : 03-33498765
TAX INVOICE
Description of
goods or services
supplied
To : Syarikat Kasut Ali Sdn. Bhd

No. 27, Jalan Maju Jaya,
31510 Ipoh.
Serial
/No
DESCRIPTION
QTY
1 School Shoes SS1201

2 School Shoes SS1210
3 Sport Shoes SP2315
Quantity of goods or
extent of the services
supplied
200
200
50
Tax Invoice No: 0001111

The words Tax Invoice
clearly indicated

Date
D/O No
UNIT
PRICE
(RM)
8.00
10.00
25.00
Discount @ 10%
Rate of GST
Add GST @ 4%
Total Sales
Total amount
of GST charged
: 25 Jun 2010
: S000345
Date of Tax
Invoice
TOTAL
(RM)
1600.00
2000.00
1250.00
4850.00
-485.00
4365.00
174.60
4539.60
Total Charge
made,
excluding GST
Total charge made,

including GST
34
35
36
TAX INVOICEContd

Simplified Tax Invoice
Must obtain approval
This type of invoice is used by retailers who
normally generate large volume of invoices daily
to end consumers e.g. supermarkets, eateries,
petrol kiosks and other point of sales outlets

This invoice can be issued regardless of any value

of sales
37
TAX INVOICEContd

Details of Simplified Tax Invoice
1)
The tax invoice serial number
2)
The date of issue of the tax invoice
3)
Name of supplier, address and identification number of the supplier
7)
GST
For each description, distinguish the type of supply for zero rate,
standard rate and exempt, the quantity of the goods or the extent of
the services supplied and the amount payable, excluding tax
8)
Any discount offered
9)
The total amount payable inclusive of the total tax chargeable
38
TAX INVOICEContd

Simplified Tax Invoice and Input Tax Claim
Simplified tax invoice can be used to claim input tax if the
amount of GST payable is RM 30.00 or less (6%GST) or
value not more than RM 500
If the amount of GST payable is more than RM30.00, the
recipient can only claim input tax RM30.00
He must request for a full tax invoice to enable him to
claim the full amount of input tax if GST payable is more
than RM30.00

RM30 (RM500
RM30
39
Example of Simplified Tax Invoice
Suppliers name,
address and GST
identification
number
COMFORT PARKING SDN. BHD.

GF1-03, Kompleks Beli-Belah,
Jalan Kenangan, 41100 Klang,
Selangor.
(GST ID No : 003456/2010)
Tel : 03-33498765
Description
Description of
goods or services
supplied
Tax Inv No : A00295

Date : 25.6.2010
Serialised Tax
Invoice
number
Total (RM)
Parking fee - 3 hours

Rounding Adj.
TOTAL
Date of Tax Invoice
3.12
Total amount
payable including
GST
*Price payable includes GST RM0.12 @ 4%
0.02
*3.10
The words Price Payable includes GST
amount and rate of tax clearly indicate
40
RECORDS KEEPING
Records keeping
Keep full and true records of all transactions which affect
or may affect his liability to tax
Shall be kept in Malaysia
In the national or English language
Keep for 7 years from the latest date to which the records
relate
7
41
RECORDS KEEPINGContd
Failure to keep record

Fine not exceeding RM 50,000 or 5
Imprisonment for a term not exceeding 3 years or
both 3
42
ACCOUNTING BASIS
Accounting Basis
Invoice basis
Generally, every taxable person shall account for GST on an invoice

basis
account for output tax at time of supply
claim input tax on the date which he holds a valid tax

invoice
Payment basis
Upon DG approval
eg retailers, grocery shops, restaurants
43
TAXABLE PERIOD
There 2 main categories of taxable periods : Below RM 5 Million

Quarterly taxable period
Above RM 5 Million
Monthly taxable period

RM 5,000,000

RM 5,000,000

44
TAXABLE PERIODContd

The filing frequency of the various taxable periods are as below
Filing
Frequency
Quarterly
Taxable Periods
Jan-Mar 13, Apr-Jun46,
Jul-Sep 79, Oct-Dec 1012
Feb-Apr 24, May-Jul57,
Aug-Oct810, Nov-Jan111
Mar-May35, Jun-Aug68,
Sep-Nov911, Dec-Feb122
Monthly
Every month
45
SUBMISSION
Example : monthly taxable period

Taxable period
30 April
430
March
3
Example : quarterly taxable period
Taxable period
July
7
August September
8
9
Last day of the following

month
31 October
1031
Last day of the following
month
46
PENALTY
Tax remains unpaid
Rate of penalty
Cumulative
1 30 days
5%
5%
31 60 days
5%
10%
61 90 days
3%
13%
91 120 days
3%
16%
121 150 days
3%
19%
151 180 days
3%
22%
181 days or more
3%
25%
47
ADJUSTMENT BAD DEBTS
Conditions For Relief Of Bad Debts

tax account and paid on the supply;

payment or part of the payment is not received after 6

months from the date of supply; or

the debtor has become insolvent before the period of 6

months has elapsed; and

reasonable efforts have been made by such person to

recover the tax

48
ADJUSTMENT BAD DEBTSContd

Claim within 6 years from the date of supply;

Claim relief as input tax

Subsequently receive repayment after claiming

the tax
account as output tax in return for the taxable period
he receives the payment of the tax from the customer

49
ADJUSTMENT BAD DEBTSContd

1 Jun 2015
Sales
RM106,000
18 Sept
2015
2 Dec 2015
(> 6 months)
Payment by trade Outstanding amount

debtors
RM26,000
RM80,000
Bad debt relief
RM1,471.70
13 Feb 2016
Trade debtor paid
RM10,000
Repayment of Bad
debt relief
RM566.04
Can claim bad debt reliefs within 6 years (31 May 2021)
2021 31
50
51
Repay
if fails to pay consideration within 6 months from
date of supply but claim input tax
6
as output tax
account in the taxable period covering the month

after the six months period
52
Repayment of Input TaxContd

Entitle to claim output tax paid
if subsequently has paid consideration to supplier
as input tax
account in the taxable period covering the month

in which payment is made
53
ADJUSTMENT REPAYMENT OF INPUT TAX
-
5 Aug 2015
Purchases
RM53,000
21 Dec 2015
Payment to
supplier
RM20,000
6 Feb 2016
(> 6 months)
Outstanding
amount
RM33,000
26 May 2016
Paid supplier
RM12,000
Claim back
input tax
RM679.25
Repayment of
input tax
RM1,867.92
Compulsory to repay the input tax if any unpaid amount more than 6 months
6,.
54
INPUT TAX CREDIT
55
Meaning of Input Tax
Section 2
2
Input tax means --a) any tax on any taxable supply of goods or services to a taxable
person; or
b) any tax paid or to be paid by a taxable person on any importation of

goods,
and the goods or services are used or are to be used for the purposes of any
business carried on or to be carried on by the taxable person
56
Mechanism to Claim Input Tax
entitle to deduct input tax from output tax
claim for input tax to be made in GST return

(Regulations)
where input tax exceeds output tax, input tax credit
will be refunded (Sec. 38(3))
claim to be made within 6 years

after the date of supply
importation
supply & imported services
57
Entitlement to claim input tax
A person is entitled to claim input tax if he is making a

taxable supply and satisfies the following criteria
:
input tax has been incurred;
input tax is allowable;
he is a taxable person, i.e. a person who is or is liable to
be registered
; and
goods or services acquired in the course or furtherance
of business.
58
Criteria to claim Input Tax
59
Criteria to Claim Input Tax
Must hold valid document:

Tax invoice
full tax invoice if total amount payable including the total tax
chargeable exceeds RM500 (> RM 30 GST)

simplified tax invoice if RM500 or less (< RM 30 GST)

Customs Form for imported goods

Document to show claimant pays imported services
60
Criteria to Claim Input TaxContd

tax invoice in the name of taxable person
not in the name of third party such as employees or

directors
tax invoice or document lost
get certified copy
no matching of input to output

can claim input tax if holds valid document

61
Non Allowable Input Tax

(Blocked Input Tax)
62
Blocked Input Tax
Blocked input tax

passenger motor cars including hiring of car
Exclusion
public service or tourism motor cars

hire and drive cars

cars used for driving instructional purposes
cars forming part of stock in trade
cars used exclusively for business purposes approved by
Director General
63
Blocked Input TaxContd

Blocked input tax
family benefits

club subscription fee

medical and personal accident insurance

medical expenses

entertainment expenses for family members and potential

clients

64
Other Issues
Consignment sales
Time of supply
12 months after sending out the goods or the date of sales
statement received
12
Whichever is earlier
Sample
Free gifts more than RM 500
RM500
Other promotions
E.g. vouchers, tied in goods etc.
65
Transitional Issues
66
Transitional Issues
Taxable Goods subject to sales tax

Taxable Services subject to service tax
Before 1 April 2015

412015
On / After 1 April 2015

412015
Tax Treatment
Supply made
Invoice issued / full

payment received
/
Subject to Sales Tax /

Service Tax

payment received
/
Supply made
No GST to the extent

covered by the invoice
amount / payment of
sales tax or service tax
One Stop Professional
Centre
67
Transitional IssuesContd

Non Taxable Goods under sales tax
Non Taxable Services under service tax
Before 1 April 2015

412015
On / After 1 April 2015

412015
Tax Treatment
Supply made

payment received
/
No GST

payment received
/
Supply made
Consideration of supply is
deemed inclusive of GST
One Stop
Professional Centre
68

Periodic or Progressive Supplies
Supply made before 1 April 2015 No GST
412015 -
Proportion of supply made on and after 1 April 2015
subject to GST
412015 -
Make continuous supply of goods spanning 1 April
2015 apportion supply and charge GST
412015 -
69
Example : Supply of products
Power Supply Sdn Bhd issues an invoice of RM200 for a supply of gas
for the period from 10 March 2015 to 15 April 2015
RM2003102015415
2015
GST Commencement
1 April 2015
412015
10.3.2015
31.3.2015
No GST chargeable
15.4.2015
GST chargeable
10.3.2015-15.04.2015 is 37 days
3102015415201537
Value chargeable to GST = RM200.00 / 37 DAYS X 15 DAYS
= RM81.08
GST 6%
= RM 4.866
6%
70
Example : Supply of services
Norman who is registered for GST has a twelve month contract with
Putra Jaya Holdings to maintain lawns and gardens. Normans
landscaping fee is RM10,000. Normans supply of landscaping
services is subject to GST at a standard rate on the pro-rated value of
the contact for the supply made on and after 1 April 2015
12
RM10,000
201541
71
Example : Supply of servicesContd

GST Commencement
1 April 2015
412015
No GST imposed
GST chargeable
1.6.2014 Contact signed
Norman Register
612014
31.5.2015 End of contract
5312015
Fee subject to GST = RM10,000 /12 X 2 months
= RM 1,666.67
GST 6%
= RM 100.00
6%
72

Non-reviewable Contract
treated as zero-rated supply to the earlier of

,
a) for 5 years from the date of GST
implementation5
b) when a review opportunity arises
73

Stocks on Hand 31/03/2015
Special refund to be given subject to a) claimant is a GST registered person mandatory

-
b) claimant on the appointed date is holding the goods for the purpose of
making taxable supply
c) goods subject to sales tax and sales tax has been charged and paid
d) invoice or customs form is available
other conditions
- amount of sales tax paid shown clearly on the invoice or import documents
74

Special refund is not allowed
on capital goods
goods which have been used partially or
incorporated into some other goods
non-trading stocks which are used indirectly in

the manufacturing process eg. fuel, lubricating
oil, detergents, chemicals, consumables etc.
75
Customer Service Centre

Wisma Cheng & Co
No. 16-G, Jalan 2/114,
Kuchai Business Centre,
Off Jalan Klang Lama,
58200 Kuala Lumpur.
THANK YOU
t: 603 7984 8988

f: 603 7980 0191
e: customerservice@chengco.com.my
For more information
WWW.CHENGCO.COM.MY
76
2014 Cheng & Co Taxation Sdn. Bhd., a company incorporated under Malaysian Companies Act 1965.
All right reserved. No part of this publication may be reproduced or transmitted in any form or by any
means, including photocopying and recording without the written permission of the copyright holder.
Such written permission from the publisher must be obtained before any part of this publication is
stored in a retrieval system of any nature.
The Cheng & Co name and logo are registered trademarks.
The information contained herein is of a general nature and is not intended to address the circumstances
of any particular individual or entity. Although we endeavour to provide accurate and timely information,
there can be no guarantee that such information is accurate as of the date it is received or that it will
continue to be accurate in the future. No one should act upon such information without appropriate
professional advice after a thorough examination of the particular situation.

GST

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GOODS & SERVICES TAX

One Stop Professional Centre

One Stop Professional Centre

Final consumers pay

Sales Tax and Services Tax (SST)

Goods And Services Tax (GST)

Scope and Charges of GST

One Stop Professional Centre

Scope and Charges of GST

Importation of goods & services into Malaysia

Listed under the

Listed under the Goods and

One Stop Professional Centre

One Stop Professional Centre

Zero Rated Supplies

To consumer - complete relief from GST

agriculture products, eg rice, paddy

1st 200 units of electricity to domestic household

Malaysian products and services more competitive abroad

exports of goods and services

To consumer reduce tax burden

Time of Supply (TOS)

Refers to the time when the supply is recognised

Basic Tax Point

Basic Tax point

Actual Tax point

One Stop Professional Centre

Time of Supply RuleContd

The time when goods are made available;

Basic tax point for supply of services

Time of Supply RuleContd

Treated as taking place at the time invoice is issued or

One Stop Professional Centre

Time of Supply RuleContd

One Stop Professional Centre

Time of Supply RuleContd

One Stop Professional Centre

Time of Supply RuleContd

One Stop Professional Centre

Time of Supply RuleContd

Note : the price above inclusive 6% GST 6%

One Stop Professional Centre

One Stop Professional Centre

Any person -- Making exempt supply

Who Should Register to GST ?

Does your Taxable

One Stop Professional Centre

Imprisonment not exceeding 3 years

One Stop Professional Centre

What is a Tax Invoice?

Primary evidence to support a customers input

Determine which supplies made by him should be

One Stop Professional Centre

Containing prescribed particulars

Full tax invoice

One Stop Professional Centre

The tax invoice serial number

The date of issue of the tax invoice

Name of supplier, address and identification number of the supplier

The customers name (or trading name) and address

A description sufficient to identify the goods or services supplied

One Stop Professional Centre

Particulars of a full tax invoice (cont..)