ELEMENTS AND

SCOPE OF GST

WHAT WE HAVE LEARNT LAST

WEEK?

How GST Works? Standard-Rated

GST @ 6%

Tax remitted to Government

Manufacturer

Price: RM30
GST: RM 1.80

Output tax =

Wholesaler
Price: RM50
GST: RM 3.00

RM 1.80

Output tax = RM 3.00

Input tax =
RM 1.80
RM 1.20

Retailer
Output tax = RM 3.60
Input tax =
RM 3.00
RM 0.60

Price: RM60
GST: RM 3.60

Consumer
pays

6%
GST only

Consumer
Total amount [ 1 + 2 +3] remitted to
Customs = RM 3.60
Assumption: GST 6 %

Kadar Standard

6%
PengilangTuntut kembali GST

Pemborong Tuntut kembali GST

Peniaga Tuntut kembali GST

Kadar GST dibayar

adalah 6%

Peniaga Tuntut kembali GST

Kadar GST dibayar

adalah 0%

Kadar Sifar

0%
Pengilang Tuntut kembali GST

Pemborong Tuntut kembali GST

Dikecualikan

6%
Pembekal Tuntut kembali GST

GST
Peniaga - Tidak boleh
menuntut kembali
GST

Tiada GST yang

dibayar

ELEMENTS AND SCOPE OF

GST
1

Supply of goods and services

Taxable person

Business

Types of supply

SCOPE

SCOPE OF GST
LOCAL
SUPPLY

IMPORT

TAXABLE SUPPLY

TAXABLE
GOODS

S.9(1)(b) GSTA

TAXABLE PERSON

TAXABLE
SERVICES

S.13 GSTA

MADE IN THE COURSE

OR FURTHEREANCE
OF BUSINESS

IN MALAYSIA

Section 9 GSTA
(GOODS AND SERVICES TAX ACT)
2014

SUPPLY

The importance of supply in

GST
The mechanics of GST when considering whether certain
transactions subject to GST or not:

Supply:
Taxable?
Non taxable?
Exempt?
Deemed supply?
Deemed non supply
Disregarded?
Out of scope?

Place of supply
Time of supply
Value of supply
Thresholds/registration
Output/input tax

Meaning of supply (S.2 & 4)

Defines a supply of
goods and services

Sec. 4 (1) GST Act:

Means all forms of supply, including imported
services, done for consideration and anything
which is not a supply of goods is supply of
services

Illustrates instances
that can be regarded
as a supply of goods
or services

First schedule GST Act specified matters to

be treated as

Treats matter not to be

a supply for GST
purpose

Second Schedule GST Act

Neither a supply of goods nor a supply of
services

a supply of goods
a supply of services

Meaning of Supply
To serve, to furnish, to provide something (general
meaning)
In the case of goods transfer of title or ownership, outright
cash or credit sale, hire purchase, etc
In the case of services the provision of services

Anything done for consideration

Sale, barter, exchange, license, rental, lease right to use,
gifts or disposition
Linked to the supply
Everything received in return for the supply of goods or
services (in monetary or non-monetary terms)

SUPPLY
A supply if
Done for consideration
Consideration (Section 2 GST Bill)
any payment made or to be made, whether in money or
otherwise, or any act or forbearance, whether or not
voluntary, in respect of, in response to, or for the
inducement of, supply of goods or services, whether by the
person or by any other person:
Provided that a deposit, whether refundable or not, given in
respect of the supply of goods or services shall not be
considered as payment made for the supply unless the
supplier applies the deposit is consideration for the supply

MEANING OF SUPPLY
Certain transactions are treated as not a supply
Transfer of going concern (neither supply of goods nor
services)
Services provided for no consideration

Anything done with no consideration can be deemed

to be a supply
Disposal of business assets
Business gifts (>RM500)
Private use of business asset

SUPPLY OF GOODS
Meaning of goods (s.2)
Any kind of movable or immovable property exempt money in
circulation as currency in Malaysia and other

Supply of goods (1st Schedule):

The transfer of the whole property in goods
The transfer of possession of the goods with agreement to
sell or to pass the property in the future
Default in payment under a security relating to land, the
transfer of the land is a supply of goods
Utilities
Transfer or disposal of business assets

SUPPLY OF SERVICES
Meaning of Services (s.2)
Anything done or to be done including the granting, assignment
or surrender of any right or the making available of any facility or
advantage but excluding goods or money
Supply of services (1st Schedule):
Anything which is done for consideration other than supply of goods
or money
The transfer of any undivided share of property or the transfer of
possession of the goods
Any treatment or process which is being applied to another persons
goods is a supply of services
Goods for business used put for private use or any non business
purpose
Supply of service with no consideration to connected persons

Scope of Supply
Business
activity

Not a
supply

No

Deemed
supply

Consideration

No

Yes

Yes

Outside the
scope of
Supply

Supply

Supply

Deemed
not a
supply

Yes

No

 Supplies are within

the scope of GST
unless there is NO
CONSIDERATION
Supplies with
consideration is not in
the scope of GST if:
Neither a supply
of goods or
services
Not take place in
Malaysia
Not made by a
taxable person
Not made in the
course of
furtherance in
business
Supplies with no
consideration is in the
scope of GST if:
In 1st Schedule

Supply for GST

SUPPLY OUT OF GST
SCOPE
SUBSEQUEN
T SUPPLY OF
GOODS
EXCLUDED
FROM ITC

TOG
C

SUPPLY OF
GOODS BY
SOCIETY TO
MEMBERS
OR DONOR
CONTRIBUTI
ON TO
PENSION,
PROVIDENT
OR SOCIAL
SECURITY
FUND

GIFT

SUPPLY OF
MONEY
OTHER
TRANSACTIONS

SUPPLY WITHIN GST

SCOPE

GOODS USE
FOR NON
BUSINESS
WHETHER OR
NOT FOR
CONSIDERATI
ON

SUPPLY OF
GOODS
SUPPLY
OF
ELECTRIC
ITY,
WATER,
GAS

LAND

TRANSFE
R OF
PROFESSI
ON OF
GOODS

GOODS USE
FOR PRIVATE
USE
WHETHER OR
NOT FOR
CONSIDERATI
ON

SUPPLY
OF
SERVICE
S

TREATME
NT OR
SERVICES
PROCESS
TO
OF
CONNECTED
GOODS
PERSON
WITHOUT
TRANSFE
CONSIDERAT
R OF
ION
UNDIVIDE
D
PROPERT
Y OF
GOODS

GST ON
IMPORT
Imported service
Importation of
goods

SUPPLY OF IMPORTED
SERVICES
Tax shall be charged to supply of services (include imported
services) - S.9
Meaning of Supply includes imported services (s.4)
Meaning of Imported services (s.2):
Any services by a supplier who belongs in a country other than
Malaysia or who carries business outside Malaysia
To a recipient who belongs in Malaysia; and
The services are consumed in Malaysia

Supply of imported services (taxable) in the course or

furtherance of business shall be treated as a supply made by
the recipient (taxable person or non taxable person)
Recipient must account output tax and can claim input tax
(taxable person)

IMPORTED SERVICES

Accounting for GST s.13 GTA

IMPORTED SERVICES

Applies to taxable and non taxable person

The supply is taxable supply if made in Malaysia
For the purpose of business
Use reverse charge mechanism
Self recipient accounting
Account for output tax on supply
Claim input tax for registered person. Non registered person
cant claim input tax

Time of supply
When the supplies are paid (s.13(4) GSTA)
A GST registered person however may account for output
tax based on the date of invoice if it is issued earlier than
the date of payment. (Panel Decision 1/2014)

IMPORTED SERVICES
Payment of royalty fees to overseas resident for the use of the
services in Malaysia? The supply is treated as imported services by
the recipient belonging in Malaysia and the value is tax exclusive
Example
Royalty fees charged by non resident
business
situated outside Malaysia from Jan
Dec 2016
Date of invoice
10 March
2016
Bank prevailing rate
10 March
2016
Calculation of GST:
Consideration for the supply @
Account
GST output = RM30,000
RM2.50
=0
GST Effect
to be accounted
by recipient
Claim
GST input
= RM30,000
@6%
GST

USD 200,000
RM2.50
RM500,000 +
GST 6%
500,000 x
[6/100]
RM30,000

IMPORTED SERVICES
Type of Person

Tax

Input Tax Claim

Documentation

Account

Full ITC

GST03

Account

Apportionment of
ITC

GST03

GST

No

Non Business

No GST

No

No

Recipient in Designated
Area (DA)

No GST

No

No

Taxable supplier
Mixed supplier

Non Registered Person

-Exempt Supplier
-Below threshold

GST04

IMPORTATION OF GOODS
Tax shall be charged and levied on any importation of
goods (include goods under a lease agreement s.13(5)
into Malaysia as if it were customs duty or excise duty
and as if the imported goods are dutiable and liable to
customs duty or excise duty. (s.9 (4) GSTA)
Shall not be released from the customs control until the
tax has been paid in full except as otherwise directed by
DG. (s.52 GSTA)
Value of goods imported shall be the sum (s. 16 GSTA)
value of the goods for the purposes of customs duty
determined under the Customs Act 1967;
Amount of customs duty paid or to be paid; and
Amount of excise duty paid or to be paid

IMPORTATION OF GOODS
Customs Act 1967 and Excise Duty 1976 shall
apply with regards to the exportation and
importation of goods including in transit and the
movement of goods under customs control. (s.
174)
Inconsistency between the provisions of Customs
Act 1967 and Excise Duty 1976, the GST Act shall
prevail (s. 174)

IMPORTATION OF GOODS
Section 56 GSTA POWER OF MINISTER TO GRANT RELIEF
GST (RELIEF) ORDER 2014
1st SCHEDULE Relief from payment GST (29 items)
YDPA, Sultan, Federal or State Govt, Public and Private Higher
Educational Institution, Private Charitable Entity for Disable, etc

2nd SCHEDULE Relief from Charging GST (4 item)

Fund raising event, supply of land to the Govt/local Authority in
compliance of requirement for public amenities or utilities for no
consideration, goods supplied at Duty Free Shop, goods or services
supplied within JDA.

Paragraph 3 Relief from payment GST on imported goods

goods listed in the GST (Zero Rated Supply) Order 2014

TYPE OF
SUPPLY

TYPE OF SUPPLY
Taxable supply (s.2)
standard rated supply (including disregarded supply)
zero rated supply
Non taxable supply
exempt supply
out of scope supply

Non business supply

Supply made outside Malaysia
Supply below threshold
Government supply S.64
Supply by statutory bodies and local authorities with respect
to regulatory and enforcement functions S.64

TAXABLE SUPPLY

TAXABLE SUPPLIES (S.2)

GST charged on taxable supplies (s.9 GSTA).
A taxable supply, is a supply of goods or services made in
Malaysia, other than an exempt supply.
Standard rated or zero rated supplies
Most local sales of goods and provision of local services are
standard-rated supplies.

disregarded supplies (supplies within group, supplies made in

warehouse, supplies between venture operator and venturers
and supplies between toll manufacturer and overseas principal)
Supplies made outside Malaysia which would be taxable
supplies if made in Malaysia (s.24(2) GSTA)

TAXABLE SUPPLY
Taxable supply:
Standard rated supply s.10 GSTA
GST charged at standard rate 6% (GST (Rate of Tax) Order
2014)
Supplier have to issue Tax Invoice
Input tax claimable

Zero-rated supply s.17 GSTA (GST (Exempt Supply) Order

2014)
GST charged at zero percent
Tax invoice is not required to be issued by supplier
Input tax claimable

ZERO-RATED SUPPLY

ZERO RATED SUPPLY

Goods
Agriculture products paddy, fresh vegetables, fruits
Foodstuff rice, sugar, table salt, plain flour, cooking oil, bread
Livestock supplies live animals and unprocessed meat
Fish live, fresh, frozen, dried
The supply of the first 300 units of electricity to domestic users
The supply of water to domestic users
Medicines
Exported goods s.17 (1)(b) GSTA

Services
Services in Malaysia e.g. pilotage, salvage or towage services
Exported services e.g. architecture services in connection with
land outside Malaysia
International services e.g. transport of passengers or goods from
place in Malaysia to a place outside Malaysia

DEEMED SUPPLY

DEEMED SUPPLY
First schedule specifies matters to be treated as a supply
of goods:
Supply made whether or not for a consideration treated as
supplies for GST purposes:
the person who is carrying on a business is entitled for a credit
under section 38
Disposals or transfer of business assets so that no longer part of
business assets (para 5 (1))
Goods for business put for private used (para 5(3))
Goods for business use for non business activity (para 5(3))
Goods for business sold in satisfaction of a debt (para 5(7))

DEEMED SUPPLY
Deemed supply cont.
change of use of such goods which results in the goods
being excluded from any credit under subsection
Test drive car change to salesman car (para 5(6))

Goods owns/dispose when ceases to be taxable person

deemed as supply unless (para 5(8) & (9):
No credit has been claim on the goods
Not acquired through TOGC or
Goods were purchased from a non taxable person
Business carried on by a personal representative as a taxable
person

DEEMED SUPPLY
First schedule of GST Bill specify matters to be treated as a supply
of goods:
Supply of electricity, gas, water, refrigeration, air conditioning or
ventilation
Transfer of the whole property in movable goods transferred
By way of sale; or
Under an agreement which expressly stipulates that the property will
pass at some time in the future

Transfer of land under

An agreement for sale,
An agreement where ownership of such land will pass at some time
the future;
Any interest under Deed of Assignment;
Any strata title
As a result of default in payment under a security relating to land

DEEMED SUPPLY
First schedule of GST Bill specify matters to be treated as
a supply of services:
A supply of services to a connected person for no
consideration by a taxable person
Any treatment or process which is being applied to
another persons goods
Lease, tenancy, easement, licence to occupy land or
transfer of undivided share in land
The transfer of:
Of any undivided share of the property in movable goods; or
Of the possession of the movable goods

DEEMED SELF SUPPLY

Deemed Self Supply
Imported services recipient (s.13)
Includes not taxable person

Local recipient who received goods from ATMS (s.72)

Includes not taxable person

Supply of goods by taxable person to Approved Jeweller

in the Approved Jeweller Scheme (s.73)

DISREGARDED SUPPLY

Disregarded supply
A taxable supply is made where no tax is to be charged but
input tax incurred is claimable:
Supply between members in group registration (s.27)
Supply from taxable person (principal) to the auctioneer (s.65)
Supply between a venturer and venture operator in JV (s.69)
Supply between warehouse in warehousing scheme (s.70)
Supply by ATMS to a person belonged in a country other than
Malaysia (s.72)
Supply between members and lead member in capital market
(s.75)
Supply in and within Designated Area (s. Part XIV)
Supply of goods in relation to retail trade activities approved
under the Free Zone Act 1990 made within the free commercial
zones (s.163)