OVERVIEW OF

SALES & SERVICETAX(SST)

Presentation Date :31October 2018

AUDITORIUM DATO’ ABD MAJIDMAKTAB KOPERASI MALAYSIA PETALING JAYA

GST-TAX HOLIDAY- SST

GSTStarted

(1April 2015)

GST Zero Rated

(1 June 2018

-31 Aug 2018)

SST

(1September2018)

WHEN SALES TAX ISCHARGED?

Taxable goods manufactured in Malaysia by a taxable person and sold,

used or disposed by him;

On taxable goods imported into

Malaysia.

THRESHOLD-SALESTAX

Reached sales threshold

Manufacturing

RM500,000.00

Contract Manufacturing RM500,000.00

Mandatory registration Voluntary

registration

SALES TAX-EXEMPTED GOODS

•Log in to https://mysst.customs.gov.my/

•Go to legislation & guides-legislation- SST orders –Sales tax order –Sales Tax(Goods Exempted From Tax) Order 2018

•Log in to https://mysst.customs.gov.my/

•Go to legislation & guides-legislation- SST orders –Sales tax order –Sales Tax (Exemption from Registration) Order 2018

Goods listed under Sales Tax

(Goods Exempted From Tax) Order

2018

Sales Tax (Exemption From

Registration) Order 2018

SALES TAX-EXEMPTEDGOODS

Food Items

Live Animals

Medic ineConstruction

Services

Construction Materials

Most Capital Goods

Vehicle General Goods

WHAT IS MANUFACTURING ?

Manufacture defines as a conversion of materialsby manual or mechanical means into a newproduct by changing the size, shape,composition, nature or quality of such materialsand includes the assembly of parts into a pieceof machinery or other products.

However, manufacture does not include theinstallation of machinery or equipment for thepurpose of construction.

In relation to petroleum, any process ofseparation, purification, conversion, refining andblending

1.The developing and printing of photographs and the production of film slides.

2.The engraving of articles with the name of the recipient, his sports record or other circumstancesunder which the article was donated or awarded.

3.The incorporation of goods into buildings.

4.The manufacture of readymixed concrete.

5.The preparations of meals.

6.The preparation of tarred metal, tarred screenings, and hot mixed preparations of bitumen and metal for road making.

7.The production of copies of document by the photo copy or similar copying process.

8.The repacking of bulk goods into smaller packages by a person other than a registered manufacturer.

9.The repair of second hand or used goods.

10.The testing of eyesight, the prescription of suitable lenses and the fitting of suchlenses into frames.

11.The following operations when performed by a person other than a registered manufacturer—

(i)the varnishing andor polishing of finished pieces of furniture.

(ii)the fitting of glass tops and, or glass doors to pieces of furniture otherwise complete

12.The reduction of size and or changing of the shape of taxable materials without changing the nature of such materials, provided that the sizing and,or shaping is not part of the normal process in manufacture of a separate article.

13.The rendering of personal tailoring service but excluding the manufacturing of garments and other textile articles on the basis of bulk and not personalized production by a firm or company engaged in the business of manufacturing garments and other textile articles.

14.The printing of logo, knitting, crocheting or embroidering on ready made garments supplied by another person.

15.The coloring of cloth supplied by another person without changing the size or shape of the said cloth.

• 16. The manufacture of batik fabrics using traditional techniques of manual block printing, manual screen printing and, or hand drawing or painting and the articles thereof.

• 17. The installation of air conditioners in motor vehicles.

• 18. The manufacture of jewellery and goldsmithswares.

• 19. The extraction of gold from mineral ores.

• 20. The recovery of gold from jewellery and, or the refining of gold.

•SCHEDULE A -SALES TAX (EXEMPTION FROM REGISTRATION) ORDER2018

PERSON EXEMPTED FROM REGISTARATIN FROM SALES TAX

SALES TAX RATE

AD VALOREMTAX

10%Specific

(Petroleum)

TAXABLE ITEMS

Furniture

-Sofa

-Mattress

Personal Items

-Shampoo

-Toothpaste

Shower Gel

Motor Vehicle

-PassengerMotorcar

-Motorcycles>250cc

Electrical Appliances

-Washing Machine

-Television

-Radio

-Electrical Devices

-Smartphones

-ComputerDevice

-Printer

ProcessedFood

-Processed Fruits

-Fruit Juice

-Butter,jams &cheese

-Cod Liver Oil

Watches/Camera/Spectacles

Food & Drinks

-FizzyDrinks

-Chocolate

Ice Cream

Other

-Engine

oil

-Brake Fluid

BigTicket Items

-Aeroplane

-Helicopter

-Yacht

-LuxuryShip

-Ferries

-SpaceCraft

HOW SALES TAX WORKS?

Supply

Chain

Manufacturer

Wholesaler

Retailer

Consumer

Government collects TAX at

the MANUFACTURER

level only

Element of SALESTAX embedded in the PRICE paid by the

consumers

INVOICE 1

INVOICE 2

INVOICE 3

INVOICE 1

HOW SALES TAX BEING CHARGED

Manufacturer

Retailer

Consumer

INVOICE FROM WHOLESALERS OR RETAILERS

1. FURNITURE RM.1300.00

INVOICE 2

INVOICE 3

INVOICE 1

INVOICE FROM MANUFACTURERSALES TAX NO : W10-1808-21035433

1. WOODEN FURNITURE RM.1000.00(HS Code: 9403609000)

SALES TAX 10% RM. 100.00

TOTAL RM.1100.00

COST RM.1100 MARKUP RM.200

SALES TAX-EXEMPTION

FACILITIES UNDER THE SALES TAX ACT 2018Section 35 of the Sales Tax Act 2018 provides the Minister the power to exempt. The exemption can be categorised as follows:

(i) Specific exemption; or

(ii) Exemption by Order of the Minister – Goods & Person

Exempted Orders

Specific Exemption Person or class of persons may apply to the Minister to be exempted from the payment of the whole or any part of the sales tax which would have been payable by such person or class of persons. In this case, application shall be submitted to the Tax Analysis Division of the Ministry of Finance. In granting the exemption, the Minister may subject such person or class of person to such conditions as he may deem fit to impose.

SALES TAX EXEMPTIONORDERS

SCHEDULEA

-Any Ruler of States, Federal / StateGovernment

- Importer , Manufacturer

-Airline Operator

-Oil and GasOperator

-Schedule A Item 24 -Any person –import – courier RM.500

-

SCHEDULEB

Manufacturing Exempted Goods

-Manufacturer of specific industries eg for pharmaceuticals products under Chapter 30 Customs DutiesOrder

-Controlled goods under Controlof Supplies Act 1961& subject to price

control

- Exporter

SCHEDULEC

-Registered Manufacturer

-Person import / purchase on behalf registered manufacturer

-Semi-finished/ finished taxable goods for subcontract work and return after

completion of work

All Exemptions Module available ONLINE viaMySST

Person Exempted from Payment of Sales Tax

SALES TAX EXEMPTIONORDERS

ScheduleA & B create

ID first

Legislation & GuidesGo to Sales Tax

Orders

SALES TAX EXEMPTIONORDERS

ScheduleB & CLog inhere

ScheduleA &B create

ID first

SERVICE TAX 2018

Service

Provider

Tax Rate 6 %

Consumer/ Business

Mandatory registration Voluntary

registration

SCOPE OF SERVICE TAX

Supply

Chain

Manufacturer

Wholesaler

Retailer

Taxable person can be any individual, company, enterprise, partnership, club, trust body, co-operative society, association, etc.

Service tax in Malaysia is a form of indirect single stage tax imposed on specified services termed as “taxable services”.

Service tax cannot be levied on any service which is not included in the list of taxable services prescribed by the Minister under First Schedule of the Service Tax Regulations 2018

Service tax is charged on: -(i) Any provision of taxable services; (ii) (ii) Provided in Malaysia; (iii) (iii) By a registered person; and(iv) (iv) In carrying on his business

SERVICE TAX REGULATION

ScheduleA & B create

ID first

Legislation & GuidesGo to Service Tax

Regulations

SERVICE TAX :THRESHOLDTAXABLEPERSON THRESHOLD

F & B (All services including restaurant ,catering, takeaways, foodtruck & food court operator(excluding sale of tobacco products and rental)

RM 1.5million

Accommodation (All services including sale of food, drinks ,alcholicdrinks andtobacco products )

Night Club

Private Club

Golf Club and DrivingRange

General Insurance or Takaful B2B& General Insurance or Takaful B2C

Excluding Medical Insurance or TakafulTelecommunication RM 500,000

Paid-TV

Advocates andSolicitors

Public Accountant

Surveyors Including Registered Valuers, Appraisers or Estate Agents

Professional Engineer

Architect

TAXABLEPERSON THRESHOLD

Consultancy

Employment Agency

Private Agency

Management Services

Parking Operator

Motor Vehicles Service or Repair RM500,000

Courier ServiceOperator

Hire anddrive car

Advertising

Provision of electricity to any domestic consumer excluding for the first 600kWh

Betting and gaming Domestic passenger air transport service and all services in connection with

such services excluding RAS & flights within Sabah & Sarawak

0Customs Agent

Credit card or charge card services @ RM 25 per card 0

HOW SERVICE TAX BEING CHARGED

Supply

Chain

Manufacturer

Wholesaler

Retailer

Service Tax No : W10-1808-31015433

Service Tax No : W10-1808-31015433

Disbursement

SERVICE TAX FACILITY

Taxable persons are allowed to deduct service tax in the return for cancelation and termination of services or any other reason such as reducing premiums or discounts.

The deduction has to be made within one year after the payment was made, or such extended period as may be approved by the DG.

CO

NTRA

SYSTEM

SERVIC

E T

AX

FACILIT

Y

DESIGNATED AREA (DA)

NO SST WITHIN /BETWEEN:

-Pulau Langkawi

-Pulau Tioman

-Pulau Labuan

Except TelecommunicationServices

SPECIAL AREA (SA)

FREE ZONES, WAREHOUSE,

LICENSED MANUFACTURING

WAREHOUSE (LMW) & JOINT DEVELOPMENT

AREA(JDA)

NO SST

(WITHIN/

BETWEEN)

Except Telecommunication

services

REGISTRATION STATUS –MYSSTPORTAL

Step 1:

Go to https://www.mysst.customs.gov.my

REGISTRATION STATUS –MYSSTPORTAL

Step 3: If the company is not registered with

MySST system, a pop up “no record found’

message will appear

Step 2: Insert GST No. / BRN No. / Company

Name to check on the status

REGISTRATION STATUS –MYSST PORTAL

Step 4: If the company already registered in

MySST, a pop up SST Registration Status will

appear, kindly check your email for further details

Please CheckYour Email …..Content of Email:

1.MySST Username & Password2.Notice of Registration Letter3.ApprovalLetter

NEW REGISTRATION –MYSSTPORTAL

Step 1:

Go to https://www.mysst.customs.gov.my

Step 2:

Choose Sales Tax or Service Tax

NEW REGISTRATION –MYSSTPORTAL

Step 3:

Continue to register as New Registration for Sales

Tax OR Service tax

Once submitted system will

generate SST Registration No.

Registered User will be notified via

email.

WE ARE HERE TO HELP YOU

Customs Call Centre (CCC)1-300-888-500

Email: ccc@ customs.gov.my

Help Desk SST : 03-83237499 / 7522

Customs Crisis Centre:03-88822289 / 2492 / 2617

SST Contact Person:https://mysst.customs.gov.my/SSTContactPerson

Copyright: INTERNAL TAX DIVISION WPKL

END OFPRESENTATION…