37
11 January 2014 1 Goods and Services Tax (GST) Lee Hooi Seng Chartered Accountant
| Date post: | 18-Jul-2016 |
| Category: |
Documents |
| Upload: | bongdaniel |
| View: | 4 times |
| Download: | 0 times |
11 January 2014
1
Goods and Services
Tax (GST)
Lee Hooi Seng
Chartered Accountant
11 January 2014
2
GST - background
• To be effective from 1 April 2015 in Malaysia
• Also known as Value Added Tax (VAT) in other
countries
• 160 countries have GST/VAT
• Malaysia, Myanmar & Brunei are the only 3
ASEAN countries yet to implement GST/VAT
11 January 2014
3
GST - background
• Initially mentioned in the Budget 15 years ago
as Sales and Service Tax, but never took off
• GST was announced in Budget 2005, but has
been put on hold in year 2006
• GST is to replace Sales Tax and Service Tax
from the effective date
11 January 2014
4
Why GST ?
• Need to reduce reliance on petroleum revenue
• Weaknesses of Sales Tax & Service Tax
• GST compliments Income Tax revenue
• More stable source of revenue to Government
• Self policing and enhance tax compliance
11 January 2014
5
GST in operation
• Consumption tax in the form of value added tax
for each stage of business transactions up to
the retail stage of distribution
• GST incurred on inputs (Input Tax) is allowed
as a credit to offset against GST on outputs
(Output Tax) i.e. accrual basis, not receipt basis
11 January 2014
6
GST in operation 6%Supplier
Manufacturer
Consumer
Retailer
Wholesaler Kastam Malaysia
RM 100 + 6 = 106
RM (9 - 6)
RM 3 GST
RM 6 GST
RM 300 + 18 = 318
RM 200 + 12 = 212
RM 150 + 9 = 159
Total GST collected = RM 6 + 3 + 3 + 6 = 18
RM (18 - 12)
RM 6 GST
RM (12 - 9)
RM 3 GST
11 January 2014
7
GST
Scope
11 January 2014
8
GST Scope
• GST is levied on SUPPLIES (not merely sales)
including gifts, samples, promotion items etc
• Certain items are not treated as SUPPLIES e.g.
gifts to the same person in the same year
where costs to the donor is <= RM 500
11 January 2014
9
GST Scope
• GST is charged on
taxable supply of goods & services
made by a taxable person
in the course of furtherance of business
in Malaysia
• GST is also charged on imported goods &
services
11 January 2014
10
GST Scope
• GST is also charged on deemed supplies:
- disposal of business assets
- private use of business assets
- imported services
- goods sold in satisfaction of a debt
- gifts costing more than RM 500
11 January 2014
11
Supplies
&
Person
11 January 2014
12
Supply
• GST bill defines a supply as “all forms of
supply” includes imported services
• done for ‘consideration’
• anything which is not supply of goods is supply
of services
• does not include supply of money
11 January 2014
13
Supply not subject to GST
• Cash donation or grants
• Compensation or liquidated damages
• Disbursements, dividends, loan repayments or
capital injection
• Transfer of business as a going concern
• Contribution to pension, EPF or Socso
11 January 2014
14
Meaning of Person
• Individual including legal person
• Sole proprietor & partnership
• Company, club, association, society, co-
operative, trade union, non profit body and
unincorporated body
• Trust, trustee, executor, administrator & joint
venture
11 January 2014
15
Meaning of Person
• Federal Government, State Government,
Statutory body & local authority
11 January 2014
16
Place of Supplies
• In Malaysia
• Goods from an overseas location to another
overseas location (although transit in Malaysia)
= Out of Scope, thus no GST
• Supply of services is deemed in Malaysia if
supplier is in Malaysia
11 January 2014
17
Time of Supplies
• Earlier of the following dates:
1. Goods removed/made available or services
performed
2. Payment received/invoice issued
• Tax Invoice is deemed time of supply where it is
issued within 21 days after time of supplies of
item (1) unless payment has been received
before issuing of the tax invoice
11 January 2014
18
Value of Supply• Consideration in money
Value = Consideration in money - GST portion
GST portion = Consideration x 6/106
11 January 2014
19
Value of Supply
• Consideration not in money = open market
value
• Value of imported goods = value for customs
duty + any customs duty paid + any excise duty
paid
• Value of imported services = payment paid
• Value of supply not for consideration = open
market value of supply
11 January 2014
20
Type of Supplies
• Standard-rated at 6% (threshold RM 500,000)
- eligible to claim input tax credit on business inputs
• Zero-rated supplies at 0%
- eligible to claim input tax credit on business inputs
• Exempt supplies
- not eligible to claim input tax credit on business inputs
11 January 2014
21
Registration
of GST
11 January 2014
22
Registration of GST
• Determination of threshold taxable turnover
• Includes standard rated supplies, zero rated
supplies and deemed supplies such as private
use etc
• Excludes exempt supplies, sales of capital
assets, imported services, out of scope
supplies and supplies to designated areas
11 January 2014
23
Registration of GST
• Any person who makes taxable supply of goods
and services in Malaysia
• Registration is mandatory for businesses with
turnover that has exceeded the prescribed
threshold of RM 500,000
• Calculation of turnover for registration is based
on the total value of the taxable supplies for a
rolling 12 month period
11 January 2014
24
Registration of GST
• Based on historical turnover or future turnover
• To apply for registration within 28 days from the
end of the relevant month
• Effective date of registration will be on the 1st
day of the following month
11 January 2014
25
Registration of GST• Voluntary registration
business below threshold may apply for voluntary registration
once registered must remain in the system for at least 2 years
11 January 2014
26
Registered Person
• Account for GST on taxable supplies made and
received
• Submit GST return (GST-03) and pay tax not
later than the last day of the following month
after the taxable period
• Issue tax invoice
11 January 2014
27
Registered Person
• Inform Customs of the cessation of business
within 30 days from the date of cessation
• Inform Customs of any changes of address,
taxable activity, accounting basis and taxable
period
• Keep adequate records of business
transactions relating to GST in English or BM
language for 7 years
11 January 2014
28
Registration of GST• Other types of registration
Branches or divisional registration
Group registration for group of companies
Registration for non-resident (appointment of agent)
Joint venture registration for petroleum exploration activity
11 January 2014
29
Payment of GST
• Monthly if turnover exceeding RM 5 million
• Quarterly if turnover RM 5 million or less
• A taxable person may apply to be placed in any
other category other than the pre-determined
taxable period
11 January 2014
30
Payment of GST• 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
11 January 2014
31
TAX
Invoice
11 January 2014
32
Tax Invoice
• Types of tax invoice when making taxable
supplies:
- Full tax invoice
- Simplified tax invoice
(amount claimable restricted to RM 20)
• Only registered person can issue tax invoice
11 January 2014
33
Full Tax Invoice
• The word “Tax Invoice” in a prominent place
• Supplier name, address and company number
• Invoice serial number
• Invoice date
11 January 2014
34
Full Tax Invoice
• Name and address of person being supplied
• Sufficient description of the transaction
• Total amount payable excluding GST, the GST
rate, GST amount and total amount payable
including GST (separately shown)
11 January 2014
35
Simplified Tax Invoice
• Invoice date
• Sufficient description of the transaction
• Total amount payable including GST
11 January 2014
37
Thank You
