Sales tax is a single-stage tax charged and levied:
i. on taxable goods manufactured in Malaysia by a taxable person and sold by
him (including used or disposed off) ; and
ii. on taxable goods imported into Malaysia.
Goods which are NOT listed under the Sales Tax (Goods Exempted From Sales Tax) Order 2018 is subject to sales tax
Manufacture means
i. a conversion of materials by manual or mechanical means into a new product
by changing the size, shape, composition, nature or quality of such materials
and includes the assembly of parts into a piece of machinery or other
products. However, manufacture does not include the installation of
machinery or equipment for the purpose of construction.
ii. In relation to petroleum, any process of separation, purification, conversion,
refining and blending.
Taxable person is a person who manufactures taxable goods and is liable to be registered if the annual turnover has exceeded RM500,000.00 threshold. Such person is required to be registered under MySST system
The sales tax rate is at 5%,10% or on a specific rate.
Taxable person is required to be registered, issue invoice and charge sales tax on the sales, maintaining a proper records and account for the tax by submitting bi–monthly returns to RMCD.
Registration is process online through by MySST system. You will be notified of registration or in the absence of a notification, you may need to apply individually online using MySST system.
You will be informed by email .For the existing GST registrant who automatically liable to be registered under sales tax, they will be informed through a letter.
No, you will be receiving notification through your personal/business email from 1st August 2018
Yes, you may apply in writing to the Director General.
Yes, you can register voluntarily provided that you are manufacturing taxable goods.
Branch registration is not allowed
Group registration is not allowed.
When the GST Act 2014 is repealed, you are automatically ceased to be a GST registered person. You are not required to apply for deregistration. However, you are required to submit the final GST return within 120 days from the Act being repealed.
A registered manufacturer is required to issue invoices in Bahasa Melayu or English containing prescribed particulars either in hard copy or electronically.
You are allowed to make adjustments in your sales tax return for credit or debit notes.
You are required to account on accrual basis
i. Registered manufacturer has to declare sales tax return (SST-02) every two months according to the taxable period. You may apply to the Director General for a specific taxable period e.g. in line with your financial year end.
ii. sales tax return has to be submitted not later than the last day of the following month after the taxable period ended.
iii. sales tax return has to be submitted regardless of whether there is any tax to be paid or not.
iv. sales tax return has to be submitted electronically or by post to Customs Processing Center (CPC).
You can make payment: a. Electronically (FPX); or b. By cheque and posted to Customs Processing Center (CPC).
Late payment penalty is applicable: i. 10% - first 30 days period. ii. 15% - second 30 days period. iii. 15% - third 30 days period.
You should keep the proper records for 7 years. Records must be kept: i. in Bahasa Melayu or English ii. In Malaysia, except permitted by DG to be kept outside Malaysia iii. In soft or hard copy
Yes. You may claim bad debts:
i. within 6 years from the date the taxable goods is sold
ii. subject to conditions determined by the DG
iii. according to a prescribed formula
The exemption provisions are:
A. Exemption on goods and persons:
i. Goods - Proposed Sales Tax (Goods Exempted From Sales Tax) Order 2018
ii. E.g. Live animals, unprocessed food, vegetables, medicines, machinery, chemicals, etc. (List of Goods Exempted FromSales Tax)
iii. Person - Sales Tax (Person Exempted From Sales Tax) Order 2018
iv. Schedule A: class of person, e.g. Ruler of States, Federal or State Government Department, Local Authority, Inland Clearance Depot, Duty Free Shop
v. Schedule B: Manufacturer of specific non taxable goods - exemption of tax on the acquisition of raw materials, components, packaging to be used in manufacturing activities
vi. Schedule C: Registered Manufacturer - exemption of tax on the acquisition of raw materials, components, packaging to be used in manufacturing of taxable goods (replacing CJ5, CJ5A, CJ5B)
B. Exemption from Registration:
i. Manufacturing activities exempted from registration regardless of turnover
> E.g. Tailor, Jeweler, Optician, engraving, vanishing table top, etc.
C. Special treatment for specific areas
1. Designated area:
| Designated (not deemed outside Malaysia) | Labuan, Langkawi and Tioman |
| Manufacturing activities in DA | Sales Tax Act does not apply to DA except for petroleum |
| Importation into DA (world to DA) | Exemption from Sales Tax except: - Langkawi: Importation of marble, petroleum and anchovies - Tioman: Importation of petroleum and motor vehicles - Labuan: Importation ofpetroleum |
| Removal of Goods | - From PCA to DA - deemed export, no sales tax - From DA to PCA - deemed import, subject to sales tax - To/from DA to DA - no sales tax - To/from DA to SA* - no sales tax |
| Special Area(not deemed outside Malaysia) | Free Zone, Licensed Warehouse, Licensed Manufacturing Warehouse and Joint Development Area (JDA) |
| Manufacturing activities in DA | Sales Tax Act does not apply to SA |
| Importation into SA (world to SA) | Generally not subject to Sales Tax except for goods in the free zone w hich m ay be subjected to Sales Tax provided in the Special Area Order |
| Removal of Goods | - From PCA to DA - deemed export, no sales tax - From DA to PCA - deemed import, subject to sales tax - To/from DA to DA - no sales tax - To/from DA to SA* - no sales tax |
You are allowed to claim input tax credit within 120 days after the effective date of SST
GST registered persons must account for GST at 0% and declare the output tax in their final GST-03 return.
Such schemes under GST will not be applicable under SST.
GST is charged at standard rate of 0% on the value of the removal of goods.
Sales Tax is charged at 10% on the value of the goods removed.
The registered manufacturer is allowed to claim for input tax on the stock in hand in the final GST-03 return
GST is charged at standard rate of 0% on the part of work performed until 31 August 2018. Meanwhile, the balance of the work completed on 15 October 2018 shall be charged with Sales Tax at 10%
Big Ticket Items under GST regime will be included in the petroleum upstream Master Exemption List (MEL) and the importer of such items that is petroleum upstream operator will be given an exemption from sales tax subject to prescribed conditions as stated in the Sales Tax (Person Exempted from Sales Tax) Order 2018.
You must account for sales tax at 10% when issue an invoice to your customer. In a case where invoice has been issued, you may issue;
i. a credit note to cancel that invoice and subsequently issue a new invoice with sales tax at 10%; or
ii. a debit note bearing the amount of sales tax at 10%
After 1st September 2018, audits for closure purposes would be carried out on GST registered entities