(FAQ) – SALES TAX 2018
1. What is Sales Tax?
Sales Tax is a single stage tax which is levied:
i. on taxable goods manufactured in Malaysia by a taxable person
and
is sold by him (including
disposed or used by him); and
ii. on taxable goods imported into Malaysia
2. Which goods are subject to Sales Tax?
Goods
subject to Sales tax are those goods not listed in the Sales Tax (Exemption)
Order as proposed
3. How is Manufacturing defined?
Manufacturing is defined as : i. the conversion by manual or
mechanical means of organic or inorganic materials into a new product by
changing the size, shape or nature of such materials and includes the assembly
of parts into a piece of machinery or other products, but does not include the installation
of machinery or equipment for the purpose of construction
ii. in relation to petroleum, any process of refining,
purification, and compounding
4. Who is a taxable person?
Taxable
person is a person manufacturing taxable goods with an annual sales turnover
above the threshold of RM 500,000.00 and is required to be registered. The
person is required to register through MySST system.
5. What is the rate of sales tax levied?
The rates proposed are 5%, 10% or a specific rate.
6. How do I know I am required to register under Sales tax?
See diagram :
7. How is Sales tax levied?
Sales tax is levied at manufacturer’s level and is explained in
the following diagram below :
8. What is the responsibility of a taxable person?
Taxable person is required to :
i. register under sales tax,
ii. Issue invoice, iii. Levy sales tax on sales, iv. Account for sales tax in a
return submitted every two months to the Customs dept., v. maintain
required records
REGISTERING UNDER SALES TAX
9. How do I register for sales tax?
Registration
can be done online through system MySST (look for link in JKDM portal). Registered
person will receive confirmation of registration through MySST System. If
however you do not receive any such confirmation you are required to submit an
application individually online through MySST system.
10. How do I know I am to be registered?
You will be informed through
email. Persons registered under GST who are required to be registered under
Sales tax will be automatically registered by the Customs dept and registered
manufacturer will be informed in writing.
11. Can I voluntarily register under Sales tax?
You can voluntarily register if
you are manufacturing taxable goods.
12. Can I register co. branches under Sales tax separately?
Registration of branches
separately is not allowed
13. I am a GST registrant.
Should I apply to cancel my registration?
No, with the revocation of the
GST Act 2014 you are automatically deregistered. However you are required to
submit your last return within 120 days from the date the Act was revoked.
INVOICE, RETURN AND PAYMENT
14. What is the condition regarding issuance of invoice?
Registered
manufacturer when selling taxable goods is required to issue an invoice for a transaction.
Invoice should be in Bahasa Malaysia or English and should contain all
particulars required. Invoice can be in hardcopy or electronic
15. How to account for credit note or debit note?
Reconciliation can be done on Sales tax return at the time credit
note or debit note is issued.
16. How is sales tax to be accounted for?
Sales tax is accounted for on accrual basis.
17. When are Sales tax returns to be submitted?
• Registered
manufacturer is to submit Sales tax return (SST-01) every two months taxable
period.
• Returns are to be submitted
not later than the last day of the month following the end of the taxable
period.
• Returns are to be submitted
immaterial whether sales tax is payable or not.
• Sales tax return are to be
submitted electronically or by post to SST Processing centre...
18. How is sales tax to be paid?
Sales tax can be paid:
a. By electronic transfer; or b. By cheque, or Bank draft and posted to SST Processing
Centre
19. Is penalty imposed for later payment?
Late payment of sales tax will be subject to penalty as below ;
■ 10% - for first 30 days
■ 15% - for next 30 days
■ 15% - for following 30 days
Maximum penalty is 40% after 90 days.
20. What are the exemptions or facilities under Sales tax?
Exemption provisions are as below:
A. Exemptions on goods and persons:
• Goods – Proposed Sales tax (Goods Exempt from Sales Tax) Order 2018.
• E.g, Live animals, unprocessed
foodstuff, vegetables, medicines, machinery, chemical products and the like.
• Persons – Proposed Sales tax (Exemption of persons) Order 2018.
• Schedule A: class of person,
e.g. Ruler of States, Federal or State Government Department, Local Authority,
Inland Clearance Depot, Duty Free Shop
• Schedule B: Manufacturer of
specific non taxable goods - exemption of tax on the acquisition of raw
materials, components, packaging to be used in manufacturing activities
• Schedule C: Registered
Manufacturer - exemption of tax on the acquisition of raw materials,
components, packaging to be used in manufacturing of taxable goods (replacing
CJ5, CJ5A, CJ5B)
B. Exemption from registration:
• manufacturing activities exempted from registration immaterial
of sales value.
> e.g, tailors, manufacturing of jewellery, optician, carving,
vanishing table top
C. Special treatment of certain areas
1. Areas:
Designated Area (DA)
(not deemed outside Malaysia)
Labuan, Langkawi and Tioman
Manufacturing activities
in DA
Proposed Sales Tax Act does not apply to
DA except for petroleum
Importation into DA
(world to DA)
Exemption from Sales Tax except: - Langkawi: Importation of
marble, petroleum and
anchovies - Tioman: Importation of
petroleum and motor vehicles - Labuan: Importation ofpetroleum
Removal of Goods - From PCA to DA - deemed export, no sales tax
- From DA to PCA - deemed import, subject to sales tax - To/from
DA to DA - no sales tax - To/from DA to SA* - no sales tax
2. Special Areas:
Special Area (SA)
(not deemed outside Malaysia)
Free Zone, Licensed Warehouse, Licensed
Manufacturing Warehouse and Joint Development Area (JDA) "
Manufacturing activities in
SA
Proposed Sales Tax Act does not apply to SA
Importation into SA
(world to SA)
Generally not
subject to Sales Tax except for goods in the free zone which may be subjected
to Sales Tax provided in the Proposed Special Area Order
Removal of Goods - From PCA to SA - deemed export, no sales tax
- From SA to PCA - deemed import, subject to sales
tax - To/from SA to SA-no sales tax -
To/from SA to D A -n o sales tax
OTHER
Sales of taxable goods
21. What is the sales tax treatment for goods transferred after 1
September 2018 and payment has been received and invoice issued during the
period GST was zero rated?
You have to account for sales tax on the invoices issued. You may
also issue a credit note to cancel the invoice and issue a new invoice which
includes sales tax or issue a debit note stating sales tax charged.
Audit
22. Would Customs dept carry on GST auditing when Sales tax comes
into effect on 1 Sept 2018?
Audit for purpose of closure of cases would be continued on GST
Registered persons
Note : The above questions and answers are adapted from the Official website of the Customs Dept, Malaysia https://www.mysst.customs.gov.my/
