gst seminar - malaysia used vehicle autoparts traders ......gst seminar malaysia automotive...

GST SEMINARMALAYSIA

AUTOMOTIVE INSTITUTE (MAI)

Date : 19th. June 2014

Place: Hotel Ixora

Seberang Prai

Penang

BUSINESS PREPARATION

Briefing Agenda

1. Supplies Spanning

GST

2. Non Reviewable

Contract

3. Registration

4. Special Refund

5. Business Preparation

for GST2

Meaning of supply spanning GST

payment or invoice before appointed date and supply takes place on and

after appointed date e.g. sales of goods, airline tickets and cinema

General Rule

any supply before appointed date not subject to GST

any supply on or after appointed date subject to GST

Exception to the general rule

supply of warranty

provision of services where service tax has been charged

provision of goods where sales tax has been charged

non reviewable contracts

Supplies Spanning GST

5

6


AD – 1st. April, 2015

(Appointed Date)

General Rule:

No tax (GST) on:-

a. Supply of goods,

b. Supply of services

c. Importation of goods

7



(Appointed Date)

1st. scenario:

Deemed:-

Invoice issued or payment

received on AD

Invoice issued

Payment received

Goods supplied

Services performed

Value of supply

[GST inclusive]

8


2nd. scenario:

No GST chargeable on the

supply of goods or services

made on or after AD

Licensees under Sales and

Service Tax Act


(Appointed Date)Invoice issued

Payment received

Goods supplied

Services performed

Licensees is a taxable person

under GST Tax Act

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Non reviewable contract

written long term contract with no provision

to review consideration for the supply until

a review opportunity arises

AND

24 months before the date of GST

implementation { 1st. April, 2015 }

Non Reviewable Contract

11

Meaning of review opportunity

Opportunity for supplier either by himself or

with agreement to –

change the consideration because of the

imposition of GST

conduct a review after AD , renegotiation or

alteration of consideration, or

conduct a review before AD, renegotiation or

alteration of the consideration


12

Zero rate supply (charged with GST at 0%) for 5

years after appointed date or when a review

opportunity arises whichever is the earlier if

both supplier and recipient are registered persons;

supply is a taxable supply; and

the recipient of the supply is entitled to claim input

tax on that supply

After 5 years period, revert to either standard

rate or zero rate


13


(Appointed Date)

5 years after AD31st. March, 2020

Review

Opportunity


Review

Opportunity

Zero rate supply for 5 years after appointed date or

when a review opportunity arises whichever is the

earlier

15

Registration

Registration effective on or

from the appointed date


(Appointed Date)

3 months before

Registration

application

Registration during the transitional period:-

17

Entitle to special refund of Sales tax (100%) if

claimant is registered (mandatory) person

hold goods on appointed date for making

taxable supply

goods are subject to sales tax

hold relevant invoices or import document to

show sales tax has been paid

Special Refund

18

Goods not eligible for special refund

capital goods e.g. building and land

goods used partially or incorporated into other goods e.g. raw

materials, work in progress

goods for hire e.g. cars, generators

goods not for business e.g. personal use

goods not for sale or exchange e.g. containers, pellets, stationeries,

moulds, manufacturing aids

goods entitled to drawback

goods allowed sales tax deduction under Section 31A Sales Tax Act

1972 (credit system)

Special Refund

19

Manner to claim special refund

claim within 6 months from appointed date

for special refund < RM10,000 require audit certificate signed by a

chartered accountant

for special refund ≥ RM10,000 require audit certificate signed by

an approved company auditor

use special form to claim refund (online only)

to be given in eight (8) equal installments over a period of two (2)

years

to account as output tax if special refund is claimed and goods are

returned

Special Refund

20

Reduce special refund to 20% (20% method)

purchase goods from non licensed

manufacturers

goods are subject to sales tax

holds invoices which does not show sales tax

has been charged

claimant is a registered (mandatory) person

hold goods on appointed date for making

taxable goods

Special Refund

21

20% method

reduce the actual purchase price by 80% for

goods held on hand on appointed date

Special refund = actual price x 20% x sales tax rate

Example:

Holds RM10,000 of raw materials on appointed date

Special refund = RM10,000 x 20% x 10%

= RM200

Special Refund

Establishing GST committee

Modification to accounting system

Preparing bills and invoices

Utilising GST Portal

GST Forms

23

1

2

3

4

5

WHAT BUSINESS SHOULD DO

24

ESTABLISHING GST COMMITTEE

To implement a GST compliant system

GST

Project

Team

Initiate

impact

study

Pre GST and

dry run

1st phase 2nd phase 3rd phase

Make changes to

system processes

and staff training

Key areas requiring attention

Tax

regulatory

compliance

Documentation

and system

Legal and

transitional

issues

Education

and training

Vendor and

supplier

communication

Apr 2014 -- June 2014

(3 months)

July 2014 -- Jan 2015

(7 months)

Feb 2015 -- Mar 2015

(2 months)

25

DEPARTMENT ACTION TO BE TAKEN

Finance,

Administration and

Legal

Cash flow impact and cash optimisation

Compliance cost and budgeting

Review legal contracts and documents

Maximise claim for input tax

Claim special refund

Monitor bad debts

Get the correct appropriate registration

Apply for special schemes

Cancel sales tax and service tax licence

Marketing and Sales Effect on prices

Tax invoice

Credit terms

Purchasing Supplier selection

Document for input tax claim

IT Accounting system

Corporate Strategy Optimise business model

Optimise corporate structure

Staff Staff training

GST Project Team

MAPPING TRANSACTIONS

26

BUSINESSES’ PREPARATION

GST Implication on Prices

identify existing suppliers

talk to small suppliers to get them registered

review procurement policy to avoid tax cascading

negotiate prices with suppliers to pass on savings

review sales price

pass on savings

absorption of GST

Price Control and Anti Profiteering Act 2011

27

GST Implication on Stock Management

monitor business stocks

purchase strikes and lulls

procurement policy

registration and deregistration

special refund

physical stock take on hand

documents to support refund

audit certificate


28

GST Implication on Cash Flow

need to analyze cash flow impact

cash recover from customer before GST is due

assess the need to provide for one time fund to

cater for GST payment upfront

review credit terms to customers

review requirement to apply for special schemes


29

GST Implication on Bad Debts

ensure a proper matching of GST payment to

government and payment received from

customers

monitor payment from customers

understand evidence of ‘reasonable efforts’


30

GST Implication on Invoicing

identify whether standard rate, exempt, zero rate

or out of scope supply

issuance of full and simplified tax invoice

requirement not to issue tax invoice for imported

services and second hand goods under margin

scheme

21 days rule

self billed invoice


31

GST Implication on Output Tax

gifts > RM500 subject to GST

commercial samples in a form not ordinarily

available for sale to the public not subject to GST

deemed supply e.g, private use and disposal of

business assets subject to GST

supplies to connected persons


32

GST Implication on Input Tax

blocked inputs not claimable

incidental financial supplies

claim > tax amount more than RM30 to be supported

by full tax invoice

De Minimis rule


33

GST Implication on Contracts

avoid long term contract without legal review

absorption of GST

pricing strategy to pass on savings

GST Implication on Human Resource

enhance staff understanding of GST

avoid unnecessary mistakes

false information may open to audit case

review policy on employee benefits


34

GST Implication on System

review system and processes

perform complete mapping of transactions to identify

required changes

GST liability on every transaction

use of online submissions to the Customs

computerized system

ready made software

upgrading present system


35

GST PORTAL

36

FORMS NO. TITLE

GST-01 Application for Goods and Services Tax Registration

GST-02

GST-02A

GST-02B

Application for group / Joint ventures registration

Group Member/ Venturer registration

Notice of change of representative member/ venture operator and

removal of group member/ venturer

GST-03 Goods and Services Tax Return

GST-04 Goods and Services Tax Declaration by person other than taxable

person

GST-04A Auction/ sale in satisfaction of debt details for GST registered

principal

GAZETTED FORMS

GST FORMS

37

GST -01

Name of form :

Application for goods and

services tax registration.

Application to be a GST

registered person

Type of registration:

Normal

Single taxable person

Single entity

Branch / division

GST FORMS

38

GST-03

Name of form : Goods and

services tax return.

Document Identification No:

generated by the system

if GST-03 is submitted

electronically.

Given by officer in charge

if GST-03 is submitted

manually.

GST FORMS

39

FORMS

NO.

TITLE

GST- A Registration / Inclusion / Removal / Update of Director /Owner/ Partner /

Principal Office Bearer / Capital Market Services Representative/ Authorized

Person

GST- B Registration of Branch or Division

GST- C Registration / Inclusion / Update of Sole Proprietorship Entity

GST- D Details of Overseas Principal

NON-GAZETTED FORMS

GST FORMS

40

FORMS NO. TITLE

GST- Adm1 Application for Approved Trader Scheme/Approved Toll Manufacturer

Scheme / Approved Jeweller Scheme

GST-Adm1A Details of Finished Goods / Services Supplied Under Approved Trader

Scheme/Approved Toll Manufacturer Scheme / Approved Jeweller

Scheme

GST-Adm1B Details of Raw Material / Components / Accessories and Machine

Imported Under Approved Trader Scheme

GST-Adm1C Details of Principal and Value Added Activities under Approved Toll

Manufacturer Scheme

GST-Adm1C(i) Local Customer Details and Undertaking under Approved Toll

Manufacturer Scheme

GST- Adm1C(ii) Raw Material / Components Details under Approved Toll Manufacturer

Scheme

ADMINISTRATIVE FORMS

GST FORMS

41

FORMS NO. TITLE

GST- Adm1D Details of New Application / Additional Supplier of Local Precious

Metal Approved Jeweller Scheme

GST-Adm2 Application for Flat Rate Scheme/Margin Scheme/Self-Billed

Invoice/Tourist Refund Scheme

GST-Adm2A

GST-Adm2B

Supplier Details of and Undertaking Under Self-Billed Invoice

Branch / Outlet Details under Tourist Refund Scheme (TRS)

GST-Adm3 Application for Goods and Services Tax Registration Exemption

GST-Adm4 Application for Cancellation of Goods and Services Tax Registration /

Special Scheme

GST- Adm5 Application for Review

GST- Adm6 Installment Application Form


GST FORMS

42

FORMS NO. TITLE

GST- Adv1

GST- Adv1-1

GST- Adv1-2

GST- Adv2-1

Application for an Advance Ruling

Application for Extension of time to submit additional documents/

information

Withdrawal of Advance Ruling Application

Application for Withdrawal of Issued Advance Ruling

GST-Adv3 Application for Extension of Advance Ruling


GST FORMS

43

Wish List

Implementation problems are minimized

Public accept GST implementation

Minimum impact on prices of goods and services

Both business community and Government are

well -prepared to implement GST

3

Ketua Setiausaha,

Perbendaharaan Malaysia

Pejabat Pelaksanaan GST

Komplek Kementerian Kewangan,

No.5, Persiaran Perdana,

Pusat Pentadbiran Kerajaan Persekutuan Malaysia,

62596 PUTRAJAYA.

Tel : 03-88823000

GST PORTAL

www.gst.customs.gov.my

1

Customs Call Centre (CCC)Tel: 03- 78067200

Fax: 03- 78067599

Email: [email protected]

2

44

INQUIRY

45

Royal Malaysian CustomsMinistry of Finance

Malaysia

Thank you

gst seminar - malaysia used vehicle autoparts traders ......gst seminar malaysia automotive...

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