Service tax is a tax charged on:-

i. any provision of taxable services;
ii. made in the course or furtherance of any business;
iii. by a taxable person; and in Malaysia.

service Tax

Taxable person is a person who provides taxable services in the course or furtherance of business in Malaysia and is liable to be registered or is registered under the Service Tax Act 2018.

The proposed rate of tax is 6% and a specific rate for credit/charged card

a)Hotel includes:
i. lodging house
ii. service apartment
iii. homestay
iv. Inn
v. rest house
vi. boarding house o Service tax charged on actual value of taxable service provided

b) Insurance and Takaful includes:
i. All insurance B2B
ii. All B2C general insurance or takaful excluding medical insurance or medical takaful is subject to service tax.
Service tax charged on actual premium paid

c) Service of food and beverage preparation includes:
i. restaurant
ii. cafe
iii. catering
iv. take-away
v. food truck
vi. retail outlet
vii. hawkers
viii. etc.
Service tax charged on actual value of taxable service provided

d) Provision of electricity:
i. B2C; more than 600kWh
Service tax charged on actual value of taxable service provided

e) Clubs includes:
i. Night club
ii. Private club
iii. Golf club and golf driving range o Service tax charged on actual
value of taxable service provided

f) Gaming includes:
i. Casino
ii. Game of chance
iii. Sweepstakes
iv. Gaming machines
v. Lottery
vi. Betting o Service tax charged on collection, based on formula

g) All provision of telecommunication services by telco provider are subjected to Service Tax. Examples are IDD call, telex, video conference, roaming, fax, VoIP, lease line, MVNO, bandwidth service, billing and collection services, maintenance of facilities, installation, etc.

Taxable Services / Supply When service tax is due and payable
a) Provision of services involving number forecasting, lottery and game of chance excluding Raffle At the time when the numbers are drawn
b) Provision of services involving sweepstakes At the time when the race takes place
c) Provision of services by gaming machine At the time when collection is removed from the machine or at the time when transaction is recorded by the machine (if more than one machine, then total collection removed from all the machines)
d) Provision of services involving casino At the last day of the taxable period (calculate total gaming machine)
e) Provision of services involving betting and gaming in tournament (horse racing, casino games, etc) At the time the participant pays the tournament fee / contest fee

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 service 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 supplies taxable services

Branch registration is 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.

Taxable Service Provider 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 service tax return for credit or debit notes.

You are required to account on payment basis

i. Registered person has to declare service 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. Service tax return has to be submitted not later than the last day of the following month after the taxable period ended.
iii. Service tax return has to be submitted regardless of whether there is any tax to be paid or not.
iv. Service 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.

Maximum penalty 40% after 90 days

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

A. Contra System
Registered person is allowed to deduct service tax in his return for any cancellation and termination of services or any other reasons such as reducing premiums or discounts.

1. Designated area:

Designated (not deemed outside Malaysia) Labuan, Langkawi and Tioman
Services provided between and within DA Not subject to service tax except prescribed by Minister
Provisions of services - From PCA to DA - subject to service tax except prescribed by Minister
- From DA to PCA - subject to service tax
- To/from DA to SA* - no service tax

2. Special area:
Special Area(not deemed outside Malaysia) Free Zone, Licensed Warehouse, Licensed Manufacturing Warehouse and Joint Development Area (JDA)
Services provided between and within SA Not subject to Service Tax except presribed by Minister
Provisions of services - From PCA to SA - subject to service tax except prescribed by Minister
- From SA to PCA - subject to service tax
- To/from SA to DA - no service tax
- From PCA(other than SA) to FZ or LMW - subject to service tax
- From PCA(other than SA) to JDA- not subject to service tax

You are allowed to claim input tax credit within 120 days after the effective date of SST

GST should be charged at 0% up to 31 Aug 2018. From 01 Sept 2018, Service Tax should be charged at the rate of 6% if the recipient of the services is a domestic consumer and the usage is more than 600kWh

The provision of that service is not subjected to service tax.

GST should be charged at 0% on the proportion of the supply made before 1 Sept 2018. While the proportion made after 1 Sept 2018 will be subject to 6% service tax.

The provision of services for the month of August is subject to GST at 0% and the period 1 September 2018 to 15 September 2018 is subject to service tax.

Provision of food preparation services by any cafeteria is subject to service tax if the sales value of services exceeded RM 1,500,000.00

The flight service is not subjected to 6% service tax.

The Rural Air Services (RAS) is aviation services conducted for travels within the interior of Sabah and Sarawak by government appointed air service provider under Rural Air Service Agreement. RAS is not subject to service tax.

GST should be charged at 0% on the proportion of the supply made before 1 Sept 2018. While the proportion made after 1 Sept 2018 will be subject to 6% service tax.

GST should be charged at 0% on the proportion of the supply made before 1 Sept 2018. While the proportion made on and after 1 Sept 2018 is subject to 6% service tax

The existing effective period of the card will not be subject to service tax of RM25 until the next annual renewal