PREPARATION OF MEALS (FOR IMMEDIATE CONSUMPTION THEREOF OR TO BE SOLD BY RETAIL AT SAME PREMISES:
The following is a decision that should interest businesses that prepare edible products(food or drinks) that are subject to Sales tax as to whether the preparation of it at the immediate premises would be considered 'manufacturing' and therefore subject to registration. In this case it was decided such activity is exempted as products manufactured are to be sold at the same premises.The same premises could however be subject to registration under the Service Tax Act if sales of food and drinks is or exceeds RM1.5m per year:
1.
However in the following case it was decided that the preparation of edible food products that were subject to Sales tax at this premises was considered as a 'Central Kitchen' and therefore a manufacturing activity that needs to be registered. The Central Kitchen is not required to register under the Service Tax Act if no sales to Customers of prepared goods (food or drinks ready for consumption) takes place at such premises. The basis of the decision is that the edible food items prepared here were then distributed to other branch outlets or francised outlets:
2.
Fast Food Restaurants too should take note that preparation of intermediate goods or food ready for consumption that is packed and kept frozen for ease of delivery and later easy preparation at restaurant outlets is a taxable activity under the Sales Tax Act. While the final product leaving the 'Central Kitchen' would be subject to payment of Sales tax, such businesses would also be able to source raw materials, ingredients and packing materials free of sales tax provided such goods are used at the same premises in the preparation and packing for delivery to company's own outlets or francised outlets:
3.
