Difference between GST and Sales and
Service Tax(SST)
SST GST
Service tax is a consumptiontax levied and charged on anytaxable services provided byany taxable person
Rate = 6% for service tax
Sales tax is a single stage taximposed on taxable goodsmanufactured locally and/orimported
Is a consumption tax leviedon any taxable goods andservices provided by anytaxable person
Rate = 6% for standard rateitem
GST is a multistage ie frommanufacturer to consumer
Difference between GST and Sales and
Service Tax(SST)
SST GST
Rate of tax = 5% to 10% for sales tax
Threshold varies from RM0 toRM3million for Service taxand RM100,000 for Sales tax
Single stage
Rate of tax = 3 types
i) Zero rated (0%)
ii) Exempted
iii) Standard rated (6%)
Threshold is RM500,000
Multistage
Difference between GST and Sales and
Service Tax(SST)SST GST
Service tax is due when paymentis received for taxable servicesrendered
If payment is not received within12 calendar months from thedate of issuance of invoice, thetax is due on the dayimmediately after the expiry ofthe 12 months period.
Is due on accrual basis and ispayable to the Custom at the endof the following month after theend of the taxable period.
Difference between GST and Sales and
Service Tax(SST)SST GST
Taxable period = Two calendarmonths
Can claim bad debts relief ifdebtors failed to pay after oneyear only for service tax
Taxable period :-
i) Monthly= For Turnover exceeding RM5million
ii) Quarterly= For Turnover less than RM5million
Can claim bad debts relief ifdebtors failed to pay after 6months
Difference between GST and Sales and
Service Tax(SST)SST GST
Cannot claim input tax as this issingle stage system
Cannot claim refund
Only apply to limitedprofessional services andindustries
Can claim input tax if goodssupplied is Zero rated orStandard rated
Can claim refund if input tax ismore than output tax
Apply to any goods and serviceswhere the threshold is met
Impact on Real Estate Agents
Estate Agent
a person licensed under Part VA of the Valuers, Appraisers and Estate Agent Act 1981
an Authority of Practice has been issued by the Board of Valuers, Appraisers & Estate Agents under Section 16 of such Act
provides services as he acts as a go-between for the owner and the buyer
assisting with their negotiations to reach an agreed sales price for the property
continue to follow up with the owner until the property is legally transferred to the new owner
Such services = taxable supplies regardless whether the property are commercial or non-commercial
Impact on Real Estate Agents
Estate agents, negotiators or brokers
receives a payment known as a Commission from the owner
Have to charge GST on the fee or commission in relation to a property located in Malaysia
If property is located outside Malaysia = zero rated
Impact on Real Estate Agents
Disbursements does not constitute a supply and is not subject to GST
provided the following circumstances are met:-made by the person as an agent on behalf of the client
client actually received the goods & services
client is the person responsible to pay
payment is authorised by the client
client knew that the goods & services paid for is provided by third party
payment is itemised
the person claims the exact amount from the client
payment is clearly additional to the supplies the person makes to the client
Impact on Real Estate Agents
Reimbursementsrefer to the recovery of an expense that you incur
as a principal from another party
may be subjected to GST if it is a consideration for a supply of goods or services
Eg. telephone, telex, postage, advertising, stationery ,travelling and accommodation
GST registered valuer, appraisers of an estate agents are entitled to claim input tax incurred for the reimbursement
Impact on Real Estate Agents
Tax InvoiceSection 33 of the Goods and Services Act 2014
every registered person who make any taxable supply of goods & services
in the course of furtherance of business
in Malaysia
to issue a tax invoice within 21 days from the time of supply
Impact on Real Estate Agents
Example:
For real estate agent, where sale of property requires
consent from the State Government, the time of supplystarts when the consent is given.
Tax invoice is issued only within 21 days from the dateof consent.
Impact on Negotiators
• Negotiators
To register & charge GST if:
Income > RM500,000
Is on contract for services
Impact on Real Estate Agents
• What constitute taxable turnover?
All fees
Additional fee incurred by valuer ,appraisers/estate agents (excluding disbursements)
Deemed supplies
Eg. private use of business assets and disposal of business gifts, excluding disposal of capital assets
Private use means any amount exceeding RM500
Impact on Real Estate Agents
• However, Real estate agent involved in business and selling properties or renting out their own property, the taxable supplies will include:
Fees
Selling price of commercial properties held as trading stock
Rental received from commercial properties
Transitional Provision
GST is payable on supplies of goods and services made on or after 1 April 2015
If there is a continuous supply of services spanning the GST commencement:
Portion of supply made before 1 April 2015
= not subject to GST
Portion of supply made on/after 1 April 2015
= subject to GST
Transitional ProvisionFor Estate Agent:
must apportion their services and charge accordingly
GST is only chargeable for such services rendered after GST implementation (1 April 2015)
Apportionment can be by way of time spent or transaction of the services
Example:
If the rental of a shop starts from 15 March 2015 to 14 April 2015, only the portion of rental from 1 April to 14 April 2015 is subject to GST.
MARGIN SCHEME (MS)
Why Margin Scheme?
Normal rules, GST is charged on full value of taxable
supplies
Example:
Used car bought from an individual, and then sold to
another person.
To avoid double taxation for taxable persons who
acquire second-hand goods where no tax was
previously charged on the acquisition.
MARGIN SCHEME (MS)
How GST being impose under Normal rules?
Selling price Selling price
RM45,000 No GST RM50,000 *GST 6%=RM3,000
*GST= RM50,000 x 6%= RM3,000.00
Individual Second hand
DealerIndividual
Registered person
Unregistered person
MARGIN SCHEME (MS)
How GST being impose under Margin scheme?
GST will be charged based on the margin
i.e. the difference between selling price and the purchase price of the prescribed second hand goods
If there is a difference (excess), the GST is to be treated inclusive in the consideration
If there is no excess, then there is no GST due and payable
MARGIN SCHEME (MS)
How GST being impose under Margin scheme?
Used goods must be acquired by the MS participants where no GST chargeable on the acquisitions
Selling price Selling price
RM45,000 No GST RM50,000 *GST 6%=RM283.01
*Margin=RM5,000.00 (RM50,000 – RM45,000)
GST=RM5,000 x 6/106 = RM283.01
Individual Second hand
DealerIndividual
Registered person
Unregistered person
MARGIN SCHEME (MS) How GST being impose under Margin scheme?
GST on Margin can also be imposed by approved person under MS to the other MS participants
Selling price Selling price Selling price
RM45,000 No GST RM50,000 *GST 6%=RM283.01 RM55,000 *GST 6%=RM283.01
*GST 6%=RM283.01
Individual Second hand
Dealer (MS)IndividualSecond hand
Dealer (MS)
Individual
MARGIN SCHEME (MS) Section 60 - Relief for Second Hand Goods
Selling Price RM50,000 (inclusive of GST)
Cost Price RM45,000
Gross Margin RM5,000 [RM50,000 – RM45,000]
GST RM283.01 [RM5,000 x 6/106] (not to be shown on invoice)
Value of the
car
RM49,716.99 [RM50,000 – RM283.01] (Selling price less GST)
Output tax RM283.01
Input tax RM0.00 (no input tax claimable as no tax invoice is issued by the
seller)
Net GST RM283.01
MARGIN SCHEME (MS)
Goods eligible for the relief are as follows:
used motor vehicle after the implementation of GST and include used motor vehicle which is subject to sales tax whether on locally manufactured vehicle or importation
Taxable supply of land and property (Commercial and Industrial) acquired after the implementation of GST
MARGIN SCHEME (MS)
Who is eligible for the scheme?
Any registered person who is involved in the business buying and selling of second-hand motor vehicles or real properties
Eg. Second hand car dealers and Real estate agents
MARGIN SCHEME (MS) How Margin Scheme Operates?
Sales transaction to MS registrant
Seller Buyer
Individual
Non-registrant MS registrant
MS registrant
GST registrant
Scenario 1
A buyer who is GST MS registrant can purchase eligible goods from individual, non-registrant, GST MS registrant or GST registrant.
No tax invoice is issued by the seller (i.e.GST is not chargeable on the sale). No input tax to be claimed by the buyer.
The buyer will then have the choice whether he wants to apply the margin scheme or not when he sells the goods.
MARGIN SCHEME (MS)
Requirement under the Margin Scheme:
Taxable person needs to apply for this scheme using the special form
Approval under this scheme is not subject to renewal
The goods is allowed to be transacted under margin scheme with acquisition made from:-
Individual
Non-registrant
Registrant as regard to goods which fall under the block input tax
Registrant person approved under the Margin Scheme (MS)
MARGIN SCHEME (MS)
Requirement under the Margin Scheme:
No tax invoice to be issued under this scheme and it is
an offence under Sec.33(8)
If the buyer is a registered person, he is not entitled to
claim the input tax incurred on the acquisition
Approved person has an option whether to impose GST
based on margin or according to the normal rules but
needs to issue tax invoice on the supply
MARGIN SCHEME (MS)
Sales transaction by MS registrant
Seller Buyer
GST MS registrant individual
non-registrant
GST MS registrant
GST registrant
Scenario 2:
The seller can opt whether he wants to apply the marginscheme or not when he sells the goods. If the seller sells thegoods using margin scheme, he will issue a normal invoiceand account for output tax based on the margin.
We are an Approved Auditors under Companies Act 1965
established in 1996 and Licensed Tax Agent under Section 153(3)
of the Income Tax Act 1967 and GST Tax Agent under Section 170
of Goods and Service Tax Act 2014.
Services provided:-
Auditing
Income Tax compliance
Income Tax planning
Accounting
Company secretarial
GST application
GST returns
GST planning & advisory
GST training
C-6-5 Megan Avenue 1,
189 Jalan Tun Razak
50400 Kuala Lumpur
Tel : 03-21660198 / Fax : 03-21662198
Email : [email protected]
Should you have any enquiries, please do not
hesitate to contact us