seminar gst vam 2014
TRANSCRIPT
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Presenter :SABARIAH BINTI MD YUSOF
Venue : Holiday Villa Subang
Date : 20 November 2014
SEMINAR GST UNTUK
PERSATUAN VETERINAR MALAYSIA (VAM)
ACCOUNTING FOR GST
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As a registered person, what are my responsibilities?
Must comply with the requirements under the GST
legislation as follows:
i. issue tax invoice
ii. account for GST on taxable supplies made and
received
iii.submit GST return (GST-03) and pay tax not
later than the last day of the following month after
the taxable period;
Responsibilities and Obligations
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iv. inform Customs of the cessation of business within
thirty days from the date of business cessation;
v. inform Customs on any changes of address, taxable
activity, accounting basis and taxable period; and
vi. keep adequate records of business transactions
relating to GST in the National or English language for
seven years.
Responsibilities and Obligations
Briefing Agenda
1. Charging Output Tax
2. Entitlement of Input Tax
3. Apportionment Rules
4. GST Adjustments
5. Taxable period
6. Submission of GST Return
7. Payment of Tax
8. Record Keeping5
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Scope and charge
• GST is charged on
the taxable supply of goods and services
made by a taxable person
in the course or furtherance of business
in Malaysia
• GST is charged on imported goods
Output Tax
OUTPUT
GST on inputs
= Input tax Claimed
input tax
GST on outputs
= Output tax
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Input tax and Output tax
BusinessThings you buy / services
received
• Medical Equipment
• Utilities expenses (telco,
water, electricity)
• Rental
• Office equipment,
furniture and
stationaries
• Vaccine, medicines
• Animal food
INPUT
Thing you sell/services
you provide
• surgery
• Vaccination
• Animal hotel
• Selling medicines
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Price (GST Exclusive)
Total GST payable is stated in the tax invoice and is shownseparately.
example:
Display price RM1,000 (GST exclusive).
GST = Price x GST rate
= RM1,000 x 6%
= RM60
Consumer pays RM1,000 + RM60 (GST) = RM1,060 and
RM60 supplier has to pay to Customs (output tax) . If the consumer is registeredperson, he can claim RM60.00 as his input tax.
Output tax
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In retailing sector, price displayed is normally inclusive of GST.
The tax invoice should state the price inclusive of GST.
example : the price of a bag of fertilizer RM150.00 (GST inclusive).
GST = price x tax fraction
= RM150.00 x 6/106
= RM8.50
the buyer has pay RM150.00 and the supplier has to pay
GST RM8.50 to Customs.
Output Tax
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Tax Fraction
Tax fraction is the amount of GST payable towards
consideration received.
Tax fraction = GST rate
100 + GST rate
= 6
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Example: Price of Goods RM180.00 (GST Inclusive)
GST Amount : RM180.00 x 6/106
GST = RM10.20
Price of Goods = RM180.00-RM10.20
= RM169.80
Output Tax
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GST charged on
taxable supplies (sales of goods / services)
deemed supplies
disposal of business assets
private use of business asset
imported services
goods sold in satisfaction of a debt
gifts costing more than RM 500
Output Tax
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Disposal of Assets
Sale of capital assets, other than TOGC
subject to GST
Sale of assets as TOGC
not subject to GST (not a supply)
Given free
the value will be the open market value
subject to GST (>RM500)
Sell as scrap
the value will be the sale value of scrap
subject to GST
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IT Tex_.UK
overseas
Malaysia
Port
ABC Sdn.Bhd
(Taxable person)
GST-03
OUTPUT TAX = RM600
INPUT TAX = RM600
Value of Services = RM10,000.00
GST = 6% X RM10,000 = RM600
Imported Services
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Supplies which may not be subject to GST
cash donation or grants where a person does not get benefits
compensation or liquidated damages
disbursements, dividends, loan repayments or capital injection
transfer of going concern (TOGC)
contribution to pension, provident or social security fund
supplies by any society or similar organisation
supplies excluded from input tax credit
Output Tax
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Issuance of Tax Invoice
Tax invoice shall be issued by every registered person who
makes any taxable supply in the course or furtherance of any
business in Malaysia
Tax invoice can be issued to the customer either :
Hard copy
Electronic
Must issue within 21 days after supply has taken place
(Time of supply)
Containing prescribed particulars
Output Tax
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Types of tax invoice when making taxable
supplies
full tax invoice S33(1)
simplified tax invoice S33(3)
self-billed invoice S33(5)
Tax Invoice
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TAX INVOICE
AUTO PARTS AND SERVICESE SDN.BHD.
Lot 123, Jalan Pengkalan, 31500 Lahat, Perak
(GST ID No : 100001/2015)
Tel : 05-3349876
Invoice No: 0001111
Date : 25 Jun 2015
D/O No : S000345
…………………………………………………………
AUTO PARTS AND SERVICES SDN.BHD.
Supplier’s name,
address and GST
identification number
The words “Tax
Invoice” clearly
indicated
Customer’s
name &
address
Tax Invoice
serial number
Date of Tax
Invoice
Total amount of
GST charged
Total amount
payable, inclusive
of GST
Total amount
payable,
excluding
GST
Quantity of goods
supplied Rate of GST
To : Syarikat Car Care Sdn. Bhd.
No. 27, Jalan Maju Jaya,
31400 Ipoh, Perak
Serial
No. Description Quantity
Unit Price
(RM)
Total
(RM)
1.
2.
3.
Car Accessories SS1201
Auto Parts SS1210
Lubricant SP2315
200
200
50
8.00
10.00
25.00
1,600.00
2,000.00
1,250.00
Discount @ 10%
Total before GST
Add GST @ 6%
4,850.00
(485.00)
4,365.00
261.90
Total Sales 4,626.90
TAX INVOICE
Description of
goods supplied
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Example of Full Tax Invoice (Standard Rated Supply)
HACHIKO ANIMAL CLINICNO.5, JALAN
PINGGIRAN PUTRA ,
43000 KAJANG
TAX INVOICE
To: Alisha binti Ahmed Invois No : A0125-15
No. 2, Jalan P11/2, GST No. : 002515386724
Putrajaya Invoice Date: 01/04/2015
NO. DESCRIPTION UNIT PRICE (RM) TOTAL (RM)
Patient name : Bobby
Reference : Dr. Danish Imran
1 Medication – Pain relief injection 16.00 16.00
2 Dentistry 100.00 100.00
3 Vaccination 30.00 30.00
146.00
GST (6 %) 8.76
TOTAL AMOUNT PAYABLE INCLUSIVE OF GST 154.76
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Syarikat Al Amin Sdn. Bhd.
No. 27, Jalan Kapar,
43210 Klang, Selangor
(GST Reg No : 100004/2012)
MOTOR MART SERVIS SDN. BHD.
Lot 123, Jalan Meru, 43210 Klang, Selangor
Tel : 03-33498765
(GST Reg No : 100004/2012)
Tax Invoice No : 0001114
Date : 25 Januari 2016
.........................................
MOTOR MART SDN. BHD.
Date of Tax Invoice
Customer’s name & address
TAX INVOICE
Total Charge made, excluding GST
Total charge made, including GST
Description services supplied
The words “Tax Invoice” clearly indicated
Supplier’s name, address and GST identification number
Tax
Invoice
serial
number
Description of goods
Serial No. Description Total
(RM)
1.
2.
3.
4.
1 unit Premium battery
4 unit Premium tyres (RM175 per unit)
Repairs and body works on car No. WC111
Auto spray/paint on car No. WC111
200.00
700.00
2,000
3,000
Total (excluding GST)
GST payable @ 6%5,900.00
342.00
Total Amount Payable6,242.00F
UL
L T
AX
IN
VO
ICE
(G
OO
DS
&
SE
RV
ICE
S)
Rate of GST
Total amount of GST charged
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1
TAX INVOICE
Simplified Tax Invoice Director General may allow a registered person to issue simplified
tax invoice
Registered person is required to apply in writing to the Director
General if certain prescribed particulars are to be omitted in the tax
invoice issued by him
For example, a registered person applies to the DG to allow him to
exclude in his tax invoice, the following prescribed particulars: the words “tax invoice”;
the name and address of the recipient; and
the price and tax for each item to be shown separately
This simplified invoice may be allowed to be issued provided it
contains particulars as approved by DG.
Example of such simplified invoice with the approved particulars is as follows:
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Description Qty Total (RM)
Feed supplement -antioxidants 1 box 50.00
1 set vaccine equipment I set 280.00
TOTAL *330.00
Supplier’s
name,
address and
GST
identification
number
Tax invoice serial number
Description of
goods or
services
supplied
Total amount of GST
charged
Date of Tax Invoice
Total amount payable including
GST
ELLA VET SHOP
GF1-03, Kompleks Sinisana,Jalan
Kenangan, 41100 Klang, Selangor.
(GST ID No : 003456/2015)
Tel : 03-33498765
* Price payable includes GST RM18.68 @ 6%Rate of GST
Inv No: A00295
Date : 17.12.2015
TAX INVOICETAX INVOICE
TAX INVOICE
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Simplified Tax Invoice and Input Tax Claim Simplified tax invoice can be used to claim any amount of input tax
credit provided it contains the name and address of the recipient
Simplified tax invoice which does not have the name and address
of the recipient :
the maximum of input tax to be claimed must not exceed RM
30.00.
If the amount of GST payable is more than RM 30.00, the
recipient can only claim input tax RM 30.00
Recipient must request to include his name and address in
the simplified tax invoice to enable him to claim the full
amount of input tax if GST payable is more than RM30.00.
Application For
Simplified Tax Invoice
ENTITLEMENT OFINPUT TAX
Meaning of Input Tax
Section 2
“Input tax” means ---
(a) any tax on any taxable supply of goods or services to a
taxable person; or
(b) any tax paid or to be paid by a taxable person on any
importation of goods,
and the goods or services are used or are to be used for the purposes
of any business carried on or to be carried on by the taxable person:
How the GST works?
GST is accounted and paid by taxable persons.
The taxable person pays GST or input tax on his business purchases.
He then adds value to those goods
and services. When the goods
are sold or services are
provided, GST or output tax
is collected based on
the selling price.
Lots of paper
work eh!!!!!!
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Entitlement To Claim Input Tax
Entitled to claim input tax if he is making a
taxable supply and satisfies the following:
input tax has been incurred;
input tax is allowable;
he is a taxable person;
goods or services acquired for business;
and
made in Malaysia
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Input Tax Credit
Input Tax Mechanism
Tax paid on inputs to be offset against the output tax in
the relevant taxable period
Subject to a time limit of 6 years from the date of return
required to be made
Apportionment rule to apply for a mixed supply
Refund to be offset against other unpaid GST, customs
and excise duties
Net tax to be refunded within
14 working days for on-line submission
28 working days for manual submission
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Input Tax Credit
Prerequisite for ITC: Claimant must be a taxable person
Must have a valid tax invoice full tax invoice
simplified tax invoice - claim the input tax up to a limit of RM30.00 if name and addressof recipient is not stated in invoice
invoice issued by approved person under Flat Rate Scheme
Customs No 1 /Customs 9 (imported goods)
document to show claimant pays imported services
Invoice issued under the name of the claimant
Goods and services acquired are not subject to any inputtax restriction e.g., motorcars
Good and services are acquired for the purpose of makingtaxable supply
Blocked input tax
passenger motor cars including hiring of car
goods or services relating to repair, maintenance and
refurbishment of a passenger car
family benefits
club subscription fee
medical and personal accident insurance
medical expenses
entertainment expenses for family members
and potential clients
Non Allowable Input Tax
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Non Allowable Input Tax
Blocked input tax
passenger motor cars including hiring of car
goods or services relating to repair,
maintenance and refurbishment of a passenger
car
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Blocked Input Tax
Family benefits
any benefits (including hospitality of any kind)
provided by the taxable person for the benefit of any
person who is the wife, husband, child or relative of
any person employed by the taxable person for the
purposes of any business carried on or to be carried
on by the taxable person
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Blocked Input Tax
Club subscription fee
any joining fee, subscription
fee, membership fee, transfer
fee or other consideration
charged by any club,
association, society or
organization established
principally for recreational or
sporting purposes or by the
transferor of the membership
or such club, association,
society or organization
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Blocked Input Tax
Medical and personal accident insurance
Any payment or contribution for insurance
contracts:-
►To insure and cover the cost of medical
treatment as well as cost of personal accident in
which the insured is any person employed by the
taxable person
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Blocked Input Tax
Medical expenses
any medical expenses in connection
with the provision of medical treatment
to any person employed by a taxable
person
Entertainment expenses
Spouse or family members
Potential clients
Employees
Clients
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Criteria To Claim Input Tax
Must hold valid document:
tax invoice
tax invoice issued by approved person for FlatRate Scheme
Customs No 1 for imported goods
Customs No 9 for goods removed from bondedwarehouse
document to show claimant pays importedservices
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For the purpose of claiming ITC :
simplified tax invoice can be used to claim input
tax.
But for an approved tax invoice without the name
and address of the recipient, the allowed input tax
amount claimable is RM30 or less.
Therefore, request for a tax invoice with name and
address of the recipient to enable him to claim the
full input tax if it is more than RM30.
Criteria To Claim Input Tax
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Criteria To Claim Input Tax
tax invoice in the name of the taxable
person
not in the name of the third party such as
employees or directors
tax invoice is lost
get certified copy
no matching of input to output
can claim input tax if holds valid
document
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Apportionment rules (first level)
Apportionment between business and
non-business
Apportionment rules (second level):
Applicable when goods and services are used for both taxable and exempt supplies (mixed supplier)
Apportionment Rules
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Apportionment Rules
No apportionment if can attribute wholly
full input tax if wholly attributable to taxable
supplies
no input tax if wholly attributable to exempt
supplies
Apportionment rules
applicable when goods and services areused for both taxable and non-taxablesupplies
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Apportionment Rules
Claim 100%
input tax
Inputs
used
Attributable to
both taxable and
exempt supplies
Wholly attributable
to taxable suppliesWholly attributable
to exempt supplies
Apportionment
rules apply
Cannot claim
input tax
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Apportionment Rules
INPUT A PROCESS
DIRECT ATTRIBUTE
Taxable
INPUT B
OUTPUT A
ExemptOUTPUT B
Claimable
Not
Claimable
INDIRECT ATTRIBUTE - Apportionment
PROCESSINPUT A OUTPUT A
OUTPUT B
Apportion
PROCESS
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Apportionment Rules
Mechanism for input tax apportionment
Turnover-based method as a standard method forapportioning any residual input
round up or down to the nearest two decimalplaces
Value of taxable supplies
Value of all supplies Taxable portion =
Input tax claimable = Taxable portion X Residual input tax
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Apportionment Rules
Example:
Taxable supplies = RM300,000
Exempt supplies = RM250,000
Residual input tax = RM8,000
RM300,000
RM300,000 + RM250,000Taxable portion =
= 54.5454%
= 54.55% (2 decimal places)
Input tax claimable = 54.55% X RM8,000
= RM4,364
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Apportionment Rules
De Minimis Limit
Exempt input tax can be recovered in full if the total value of
exempt supply is less than a prescribed amount
Prescribed amount
total value of the exempt supplies does not exceed
an average of RM5,000 per month and
not exceeding 5% of the total value of total supplies
(all taxable and exempt supplies) made in that period
Example:
Factory provides transport (workers bus) to his workers for a
charge
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De Minimis Limit
Example 1 :
A manufacturing company provides bus
transportation to its workers and charges
them.
Activity Taxable Exempt %
Value (RM) 150,000 4,000 2.6
Full recovery of input tax allowed
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De Minimis Limit
Example 2 :
A manufacturing company provides bus
transportation to its workers and charges
them.
Activity Taxable Exempt %
Value (RM) 500,000 10,000 2.0
Full recovery of input tax are not allowed, have to apply
apportionment rule on ITC
Residual Input Tax
Taxable Supplies
Exempted Supplies
ITC Claimable Total Input Tax
RM500 RM500,000 RM10,000 98% RM490.00
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Adjustments to input tax and output tax
when the taxable person issues debit notes or credit notes
In relation to bed debt,
payment not received after 6 months
debtor has become insolvent before expiry of 6 months
payment not made for supply after six months
Adjustments
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Adjustments due to credit note issued credit note is issued when the amount previously invoiced is reduced or
a transaction is cancelled
Supplier, already accounted for output tax, reduces output tax in the return for the taxable period in which the credit note was issued
buyer , already claimed input tax, reduces input tax in the return for the taxable period in which he received the credit note
Adjustments – Credit note & Debit note
Adjustments due to debit note issued debit note is issued when the amount previously invoiced is increased
supplier has to increase output tax in the return for the taxable period in which the debit note was issued
buyer has to increase input tax in the return for the taxable period in which he received the debit note
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Credit note & Debit note adjustment
Adjustment Supplier Recipient
In relation
to
Adjustment
method
When:
In GST Return
for
Adjustment
method
When:
In GST Return
for
Credit noteReduce
output tax
The taxable
period where
CN is issued
Reduce
input tax
Taxable period
where CN is
issued
Debit noteIncrease
output tax
The taxable
period where
DN is issued
Increase
input tax
Taxable period
where DN is
issued
BAD DEBT
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6 years period for claiming bad debt relief
Supply Claimed relief
Tax paid
Payment
received
GST has to be accounted
to JKDM
6 months elapsed
Concept:
Bad Debt
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• Bad Debt Relief entitle to relief on bad debts if the taxable person has not
received any payment or part of payment in respect of thetaxable supplies
• Conditions to apply relief GST has been paid
has not received any payment or part payment 6 months fromthe date of supply or the debtor has become insolvent beforethe period of 6 months has elapsed
sufficient efforts have been made to recover the debt
• Shall make adjustment in the GST return for bad debtrelief claim
Bad Debt Relief
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Adjustments due to bad debts supplier is entitled to bad debts relief
supplier claims as input tax in the return for the taxable period in which the bad debts are given relief
input tax amount to be claimed is computed as follows:
where
A1 is the payment not received in respect of the taxable supply
B is the consideration for the taxable supply
C is the tax due and payable on the taxable supply
buyer account as output tax in the return for the taxable period in which the bad debts are given relief
A1
Binput tax = x C
Bad Debt Relief
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Example:
Bad Debt Relief
10 July 2015
RM53,000 (inclusive
GST RM3,000)
GST – 03 : RM3,000
(output)
5 September 2015
RM42,400
Balance of RM10,600 unpaid
after 6 months from date of
invoice
Invoice
Payment
RM10,600
RM53,000input tax claimable = x RM3,000
= RM600
Supplier transaction
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If buyer who is a taxable person fails to pay his supplier theconsideration (wholly / part) on the supply after the period of sixmonths :-
Need to account for GST on the outstanding amount owed to thesupplier, if already claimed the input tax
Deemed to be his output tax (RM600 in the previous example)
Account the output tax in the taxable period after the period ofsix months in his GST Return
If he had ceased to be a registered person and had claim theinput tax, account the tax in GST-03 form
Bad Debt Relief
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Adjustments due to payment received in respect ofbad debts customer makes payment in respect of bad debts (relief has been
claimed by supplier)
supplier accounts as his deemed output tax in the return forthe taxable period in which the payment is made
output tax amount to account
where
A2 is the payment received in respect of the taxable supply
B is the consideration for the taxable supply
C is the tax due and payable on the taxable supply
customer account as input tax in the return for the taxableperiod in which the payment is made
A2
Boutput tax = x C
Bad Debt Recovery
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SUPPLIER
Based on the earlier example:
On 5 March 2016, the customer pays RM8,000. The balance of RM2,600 is still unpaid.
RM8,000
RM53,000output tax to be accounted = x RM3,000
= RM452.83
Bad Debt Recovery
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CustomerAllowed to claim the RM452.83:-
If he is a Registered person – claim asinput tax in GST Return (GST-03)
If he ceased to be a registered person –claimed input tax by amending GST-03
Bad Debt Recovery
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Adjustment Supplier Recipient
In relation toAdjustment
method
When:
In GST Return for
Adjustment
method
When:
In GST Return for
Bad debt relief
(Payment NOT
received)
Increase input
tax
The taxable period
when bad debt
relief is claimed
Increase output
tax
The taxable period
where the 6th
months from time of
supply occurred
Recovery of bad
debt
(Payment received)
Increase output
tax
The taxable period
when payment is
received
Increase input tax
The taxable period
when payment is
made
Adjustments – Bad debts
TAXABLE PERIOD
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Regular interval period where a taxable person
accounts and pays GST to the government
To determine at the time when the GSTregistration is approved
quarterly basis
• for businesses with taxable turnover not
exceeding RM5 million in the period of 12
months
monthly basis
• for businesses with taxable turnoverexceeding RM5 million in the period of 12months
Taxable Period
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When to submit GST Return
monthly taxable period
quarterly taxable period
Filing of GST Returns
GST RETURNS AND
PAYMENT OF TAX
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GST Returns and Payment
GST returns and payments
must be submitted not later
than the last day of the
month following the end of
the taxable period
Electronic filing is
encouraged
GST FORM NO.3 (PAYMENT FORM)
GST FORM NO.3 (PAYMENT FORM)
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Submission of GST Returns
GST Return must be submitted for any condition as follows:
Payment : output tax > input tax
Refund : output tax < input tax
No payment : output tax = input tax
no output tax, no input tax
(nil return)
Late filing return commits an offence and be liable to a fine not
exceeding fifty thousand ringgit or to imprisonment not
exceeding 3 years or to both
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Example (payment) :
Calculation of output tax
• Value of taxable supplies made
• Output tax
Calculation of input tax
• Value of taxable supplies received
• Input tax
Net tax payable/refundable
• GST payable (2 – 4)
• GST refundable (4 – 2)
RM1,000,000 1
RM 40,000 2
RM 600,000 3
RM 24,000 4
RM 16,000 5
6
Filing of GST Returns
81
Example (refund):
Calculation of output tax
• Value of taxable supplies made
• Output tax
Calculation of input tax
• Value of taxable supplies received
• Input tax
Net tax payable/refundable
• GST payable (2 – 4)
• GST refundable (4 – 2)
RM1,000,000 1
RM 40,000 2
RM1, 600,000 3
RM 64,000 4
RM 24,000
5
6
Filing of GST Returns
82
14 working days for electronic submission
28 working days for manual submission
Late registration :
pay net tax if output tax exceeds input
tax
refund if input tax exceeds output tax
GST Refund
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Payment of tax must be made not later than the last
day on which he is required to furnish the return
Payment of tax may be made:
1. at JKDM office, in person
cheque, bank draft, postal order, money order
2. over the counter at dedicated bank
cheque, bank draft
3. by post
cheque, bank draft, postal order
4. by electronic means
Internet banking, FPX (financial processing exchange)
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Submission of Tax Return
Register for GST
1. Click the [Register For GST] hyperlink
87
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Bahasa Malaysia or English
7 years
can be kept in soft or hard copy
to be kept in principal place of
business
Record Keeping
89
Failure to Keep Records
Any person who contravenes Section 36
GST Act 2014, commits as offence and shall,
on conviction, be liable to a fine:
not exceeding fifty thousand ringgit; or
to imprisonment for a term not exceeding
three years; or
to both
Record Keeping
90
Records relating to registration
SSM records – Form A, B, C, 8,9 and etc.
Records relating business activities
tax invoices, invoices, receipts,
debit note, credit note
delivery order, purchase order
Bank slip, bank statement, voucher and etc.
Contract, agreement
Records relating to accounting (hard copy)
Financial statement – Profit & Loss, Balance Sheet, Trial Balance
Account payable, account receivable, General ledger, Sales, Purchase ,
stock, cash and etc.
Record Keeping
91
Records relating to taxation
Customs forms – K1, K2, K9 and etc
GST – GST returns, registration and etc
GST adjustment sheet
Income tax declaration
Records relating to electronic form
Accounting software manual
Accounts chart, access code, program documentation
Audit trail
Purchase, Sales, GL Listing (e.g standard, exempt, disregard, out of
scope, deemed supply etc)
GAF File (GST Accounting Software)
Management Information Report (MIS) reportOther data / records keep in accounting / business software
Record Keeping
Thank you
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Livestock
Zero rate Products (0%)
• Live bovine animals
-cattle, sheep, goats, swine, poultry
• Meat of bovine animals, birds’ eggs (fresh, salted,
Standard rate products (6%)
• Supplies of livestock products that are not listed in the above such as deer meat, turkey, quail, goose.
• Pet animals – cat, dog, and hamster
• All birds
• All process meat
• example: burger, nugget
95
Fisheries Industry
Zero Rate (0%) products
• Supply of fish whether marine or aquaculture which is used as foods for human consumption
• Fish fry
• Crustaceans-lobster, crabs, oysters, scallops, mussels
Produk berkadar standard (6%)
• Fish ornamental
• Fish for aquaria
• Fish pond
• Fish use as a bait
• Fish balls, fish cake, fish fillets, canned sardines, tuna or mackerel
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SERVICES
Veterinary Services:
1.Veterinary hospitals
2.Clinics
3.Veterinary pharmacy
4.Animal hotels
5.Other related services
-testing
-supply of diagnostic test kits
- supply of vaccination
equipment services
- supply feed additives
Standard rated supply
Subject to GST 6%
Input tax claimable
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Purpose
A facility to reduce cost of production i.e. GST incurred by small scale
farmers
Scheme
Approved person (those below threshold and not registered under GST)
to charge a flat rate addition to his registered buyers but does not have
to remit the amount to the authority (RMC)
The registered buyer is allowed to claim input tax based on the flat rate
addition charged by the approved person
Prescribed Activities
growing of crops, market gardening or horticulture,
livestock farming, or
fishing including aquaculture
Flat Rate Scheme
PURCHASE FROM SALE TOAPPROVED PERSON FRS
(non-registered person)Registered person GST
i.e. animal food
RM 10,000.00
RM30,000.00
=> GST 6% = RM600.00
=>charged ‘flat rate addition’ 2% = RM600.00
(to his registered buyer - keep the FRA)=>Buyer can claim RM600.00 from Govt as his input tax credit
Registered person GST
Flat Rate Scheme (FRS)
Concept
• Rate of flat rate addition:
The rate is determined by the Minister, i.e. 2% as stipulated in GST Regulations
The rate is charged only on the value of taxable goods supplied relating to prescribed activities
Also allowed to be imposed on zero-rated supplies. For example, on sale of vegetables by the approved person
Flat Rate Scheme
A person is eligible to apply for this scheme subject to the following conditions:
He is not a registered person
He is a member of an association or body which is regulated by the relevant authority as prescribed in GST Regulations
He is carrying on a business relating to the prescribed activities
At least 80% of his total supply of goods in a year involves one or more prescribed activities
He has not in three years preceding the date of his application for approval—
Been convicted of any of any offence under the Act;
Accepted any offer of compound; or
Had his approval revoked under this scheme .
Flat Rate Scheme
Relevant Authorities under FRS:
1. Department of Agriculture
2. Department of Fisheries
3. Department of Veterinary Services
4. Fisheries Development Authority of Malaysia
5. Malaysia Palm Oil Board
6. Malaysia Rubber Board
7. Malaysia Cocoa Board
8. Malaysia Pepper Board
9. National Kenaf and Tobacco Board
10. Farmers’ Organisation Authority
11. Kemubu Agricultural Development Authority
Flat Rate Scheme
Cont…
Relevant Authorities under FRS:
12. Muda Agricultural Development Authority
13. Malaysia Pineapple Industry Board
14. Department of Agriculture Sarawak
15. Sabah Rubber Industry Board
16. Ministry of Agriculture and Food Industry State of Sabah
Flat Rate Scheme
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Requirements for the FRS:
• Must issue invoices on the supplies of prescribed activities
• Must not include flat rate addition for supply which is not under prescribed activities or supply to a non-registered person
• Must submit annual sale statement
Note
• It is an offence if flat rate addition is included in the supply to a non-registered person
Flat Rate Scheme
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ONLINE
KLIK DISINI
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Before GST
Payment received/invoice issued
After commencement of GST
Goods supplied/delivered to the buyers
Invois
Jualan
……………
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Transitional Period
Transitional Period
Goods sent before GST but payment
received after commencement of GST
Transitional Period
Before GST
*Prepaid phone card sold
(Subject to Service Tax)
After GST
Card be used for the
telecommunication services
*Kad telefon tertakluk
kepada SST 6%
Prepaid Card
Before GST
Flight ticket sold
After GST commencement
The services rendered
Transitional Period
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What is supply spanning GST?
Payment or invoice before appointed date and supply takes place on
and after appointed date or vice versa e.g. sales of goods, airline
tickets and cinema
General Rule
Any supply before appointed date is not subject to GST
Any supply on or after appointed date is subject to GST
Exception to general rule
Supply of warranty
Provision of goods where sales tax has been charged
Provision of services where service tax has been charged
Non-reviewable contracts
Supplies Spanning GST
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BEFORE GST ON OR AFTER GST IMPLICATION ON GST
Taxable goods supplied
(available / removed)
Payment received /
Invoice issued
Subject to SALES TAX
Invoice issued with sales
tax
Taxable goods
supplied
Subject to sales tax
Full Payment received / part
payment received with
sales tax paid
Taxable goods
supplied
Subject to sales tax on the whole supply
or part of the supply that relates to
payment of sales tax
Invoice issued / Payment
received by non-licensee
Taxable goods
supplied
Value of supply deemed inclusive of
GST and account in the 1st taxable
period after the appointed date
Invoice issued / Payment
received
Supply non-taxable
goods under Sales Tax
Act 1972.
Value of supply deemed inclusive of
GST and account in the 1st taxable
period after the appointed date
Payment / invoices on supply of goods
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Before GST On or After GST Implication on GST
Prescribed Services
supplied Payment received
Not subject to GST
Subject to service tax
Payment received /
service tax charged
or paid
Prescribed Services
supplied
Not subject to GST
Subject to service tax
Payment received /
invoice issued
Non-prescribed
services supplied Value of supply deemed inclusive
of GST and account in the 1st
taxable period after the appointed
date
Prescribed services
supplied by non-
licensee
Goods importedRelease from customs
control
Subject to GST and date of
importation is when released from
customs control
Supplies spanning GST
If the invoice for renting a hall is
issued before GST
implementation date, prior to an
event which would only take
place on or after 1.4.2015:
The services will not be
subjected to GST but subject to
service tax.
Supplies Spanning GST
Tickets sold before GST
implementation but
services perform on or after 1,4,2015
eg. admission tickets to theme park
Subject to GST;
Amount paid to be GST inclusive eg:
Ticket price at RM100 x GST @ 6% to
be shown as RM106.00
(not separated)
Supplies Spanning GST
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Non-reviewable contract
Written contract with no provision to review consideration
for the supply until a review opportunity arises
AND
24 months before the date of GST implementation
(1.4.2015)
Non-Reviewable Contract
What is long-term non reviewable contract for GST
purpose?
written long-term contract entered into not less than 2 years
before 1.4.2015 with no provision to review consideration for
the supply until a review opportunity arises; and
supplies can be zero-rated (charged with GST at 0%) for a
period of five years from 1.4.2015 or the duration of the
contract, whichever is the earlier
Non-reviewable contract
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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 1.4.2015 , renegotiation or
alteration of consideration, or
conduct a review before 1.4.2015, renegotiation or
alteration of the consideration
Non-Reviewable Contract
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1st. April, 2015
(Appointed Date) 5 years after AD
Review
Opportunity
Non-Reviewable Contract
Review
Opportunity
Zero rate supply for 5 years after 1.4.2015 or when a
review opportunity arises whichever is the earlier
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Zero rate supply for 5 years after 1.4.2015 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 full input tax on
the supplies he makes
After 5 years period, revert to either standard rate or zero
rate
For all other contracts that span GST implementation, the
portion of the supply that is attributable to post GST
implementation is chargeable to tax.
Non reviewable contract
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Stocks on Hand
• Special sales tax refund to be given subject to conditions
claimant is a GST registered person
claimant on the appointed date holds the goods for the purpose of making a taxable supply
goods subject to sales tax and the sales tax has been paid
invoice is available
• Actual amount of sales tax to be refunded
if the amount of sales tax paid was shown clearly on the invoice or import documents
Special Refund
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Entitle to special refund of sales tax if:
100% sales tax claimable
claimant is a registered (mandatory) person on AD
hold goods on AD for making taxable supply (goods or
services)
goods are subject to sales tax
holds relevant invoices, import document to show sales tax
has been charged
goods where sales tax has been paid before AD
holds payment documents (cheque, payment voucher, etc.)
to show sales tax has been paid
Special refund on goods held on hand
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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 STA 1972
(credit system)
Special Refund
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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
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Reduce special refund to 20%
(20% method)
purchased goods from non licensed manufacturers
goods are subject to sales tax
hold invoices which does not show sales tax has been
charged
claimant is mandatory registered under GST
hold goods for making taxable goods on GST
implementation date
Special Refund
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20% method
reduce the actual purchase price by 80% for goods held on
hand on GST implementation date
Special refund = actual price x 20% x sales tax rate
Example:
Purchased RM15,000 of raw materials but holds RM10,000
on GST implementation date
Special refund = RM10,000 x 20% x 10%
= RM200
Special Refund
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GST Treatment on Goods Returned
• If a GST registered person has claimed a special
refund on goods held on hand and subsequently
returned the goods to the supplier (a licensed
manufacturer under the Sales Tax Act), he shall
account the amount of special sales tax refund as his
output tax
Transitional Period
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Matters to consider
price display
GST inclusive
tax invoice to show GST chargeable
GST Implementation Day
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Business Preparation for GST
GST
Readiness
Human
Resource
Sales &
Marketing
System
& Processes
Accounting
& Finance
Purchasing
& supply chain
Government
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GST Implication on System
review system and processes
perform complete mapping of transactions to identify
required changes
GST liability on every transaction and deadlines
use of online submissions of GST returns
computerised system
ready made software
upgrading present system
Business Preparation for GST
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GST Implication on Registration
is required to be in the GST system
can volunteer to be in the GST system
voluntary registration
input tax consideration
consumer profile
Business Preparation for GST
Areas GST Implications
Pricing
Policies
Change in selling price to reflect GST replacing
SST
Negotiate with suppliers/vendors on prices of raw
materials/trading stocks
Input tax claimable
Review procurement policy to avoid cascading
effect
To assess customers reaction on price
Anti Profiteering Act will come in force
Stock
Management Monitor business stocks (e.g. raw materials)
- Special sales tax refund
conduct stock take
Business Preparation for GST
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Areas GST Implications
Cash Flow Need to analyze cash flow impact
to assess the need to create a one time
fund to cater for GST payment up-front
cash may be recovered from customer
before GST is due
Credit Terms Need to review credit terms and issuance of
invoice
timing differences may impact cash flow of
business
may result in making payment of GST
before collection from customers
Business Preparation for GST
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Areas GST Implications
Invoicing Identify type of each supply - Standard Rate,
Zero Rate, exempt or out of scope
Pricing– GST inclusive / exclusive
Full Tax invoice necessary
Simplified Tax invoice
Accounting system – able to capture and keep
track of GST in financial year
Systems /
software
Online submission of GST returns to Customs
Department
Enhance existing system
Business Preparation for GST
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Areas GST Implications
Staff Training To upgrade understanding of GST
To avoid unnecessary mistake
False/wrong information declared may open for audit
case
Monitor business stocks (e.g. raw materials)
- Conduct stock take
- Special sales tax refund
- Computerised accounting system
Contract Legal advice with regards to contract
Avoid long term contract without legal review
Advertising Requirement to show price as GST inclusive
Business Preparation for GST
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Pusat Pemprosesan GST
Jabatan Kastam Diraja Malaysia
Kompleks Kastam WPKL
No.22 Jalan SS 6/3 Kelana jaya
47301 Petaling Jaya
Selangor Darul Ehsan
No.Tel : 03-7884 0856
No.Fax : 03-7880 1808
ii) GST PORTAL
www.gst.customs.gov.my
iii) Customs Call Centre (CCC)
Tel: 03- 78067200 @ 1-300-888-500
Fax: 03- 78067599
Email: [email protected]
PUSAT PEMPROSESAN GST (GPC)
