GST IMPLIMENTATION IN MALAYSIA - Impact to Logistic Industry Zuraini - - PowerPoint PPT Presentation

GST IMPLIMENTATION IN MALAYSIA

• Impact to Logistic Industry

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Date : 5 November 2014

Zuraini binti Othman Unit Penguatkuasaan Pendaftaran GST Bahagian GST Ibu Pejabat JKDM

• Also known as Value Added Tax (VAT)
• Implemented by 160 countries
• Broad based and multistage consumption tax to

replace sales tax and service tax

• A consumption tax in the form of value added tax
• GST incurred on inputs is allowed as a credit to

the registrant – offset against output tax

• Imposed on goods and services at every stage of

the production and distribution chain

What is GST?

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What is GST?

Business

GOODS

• r

SERVICES

INPUT OUTPUT

GST on inputs

= Input tax

• utput tax - input tax

GST on outputs

= Output tax

Raw materials Consumable goods, machines etc. Services (rental, insurance, etc.) Utilities (electricity and water)

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Malaysian GST model

5%, 6%, 10%, 20% & specific rate Various threshold Rate = 6 % Threshold = RM500,000

• To replace current tax system
• GST is charged on goods and services that

are  supplied in Malaysia  Imported into Malaysia

TYPES OF SUPPLY OUTPUT TAX INPUT TAX

Standard rated 6% Claimable Zero rated 0% Claimable Exempt No GST charged Not claimable

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Malaysian GST model

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SST vs. GST

Sales Tax Service Tax GST

Date of introduction 1972 1975 1 April 2015 Scope of charge Imposed on selected goods at manufacturing level and on importation Imposed on selected taxable supplies Supplies of all goods, services and Imports Rate 5%, 10%, specific rate for petroleum 6%, specific rate for credit card 0%, 6% Exempt supply Facilities Acquisition of raw materials/component free from sales tax

• Input Tax credit

Various scheme Threshold RM 100,000.00 Various threshold up to RM 3 mil RM500,000.00

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GST Treatment For Logistic Industry

SERVICES SUPPLIED ZERO RATED

Freight transportation including courier services i. All International Transportation ii. Local Transportation services which is part of international journey provided that it is Same supplier Ancillary transportation services including loading, unloading and cargo handling services Services to:

• i. any goods in airport if it is provided by airport
• perator
• ii. Imported and exported goods by the same

supplier for the international transport services Storage services Storage services is zero rate to any goods which is carried or to be carried in an aircraft in airport area if it is supplied by the airport operator Leased of container Aircraft Unit Load Devices conforms to International Air Transport Association standard and used or to be used for transportation of goods.

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COURIER SERVICES

SUPPLY SERVICE TAX GST Freight transportation services i. Courier services for packages of less than 30 kg each in Malaysia ii. Other than courier services i. Taxable ii. Non Taxable i. Taxable ii. Taxable Freight transportation services/Courier services by the same supplier from: i. inside Malaysia to out side Malaysia ii.

• utside Malaysia to inside

Malaysia iii.

• utside Malaysia to outside

Malaysia Non Taxable Zero rated supply Courier services by different supplier from: i. inside Malaysia to in side Malaysia ii.

• utside Malaysia to inside

Malaysia i. Taxable ii. Non Taxable i. Standard Rated Supply ii. Zero Rated Supply

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Supply by Forwarding Agent

SUPPLY SERVICE TAX GST Documentation services: i. all customs forms ii. manifest i. Taxable ii. Non taxable i. Taxable ii. Taxable Handling/Forwarding fee Taxable Taxable Attending Customs examination Taxable Taxable Present for customs seal Taxable Taxable EDI customer in Free Zone Non Taxable Taxable Overtime charge for customs clearance Taxable Taxable

GST Treatment : Standard rated supply but can be zero rated if supplied by the same supplier who supplied the international freight transportation.

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Handling Services

Stevedoring and porterage Loading, unloading, reloading, stowing, securing and shifting cargo Survey of cargo (including damage cargo) Cargo security services Presenting goods for customs clearance Preparing and amending customs declaration Preparing or amending bills

• f lading, airway bills and

certificates of shipment. Sorting, opening for inspection, repairing, weighting and tarring, taping and sealing, erasing and remarking, labeling and numbering, tallying, checking, sampling, measuring or gouging of goods.

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FREE COMMERCIAL ZONE

• FCZ is treated as a place located in Malaysia
• Operators in FCZ are allowed to register under

GST

• Records are not required to be submitted

monthly but must be made available as and when required by Customs

• Auditing by Customs will be done at random

based on a risk management system

Place of supply Goods Services Outside Malaysia to FCZ Not subject to GST Standard Rated FCZ to Outside Malaysia Zero rated Zero rated FCZ to PCA Standard Rated (importation) Standard Rated Within FCZ Not subject to GST Standard Rated

GST Treatment – FCZ

Registration for GST

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LIABE TO BE REGISTER

NOT LIABLE BUT MAY REGISTER VOLUNTARILY BUT MUST REMAIN FOR AT LEAST 2 YEARS

Disposal of capital assets Imported services Disregarded supplies (Warehousing Scheme or DA)

Proprietorship Local Authority Statutory Body Public Authority Company Individual Association Partnership

May apply exemption for registration if 100% zero rate

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Accounting for Tax

Account for tax

Charge GST

• n taxable

supplies Issues tax invoice – as prescribed in the regulations. Claim input tax Time of supply rule Make Adjustment

• Credit note
• Debit note
• Payment not

received > 6 months

Submit return

DISBURSEMENT

You acted for your client when paying the third party. The client actually received and used the goods or services provided by the third party. The client knows that the goods or services would be provided by the third party. The client authorized you to make payment on his behalf. The payment is separately itemized when invoicing the client. You recover only the exact amount which you paid to the third party. The goods and services paid for are clearly additional to the supplies which you make to the client.

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DISBURSEMENT

• not subject to GST as it is not a supply subject to conditions.

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End End of

• f

Pre Presentatio sentation

Tax Review Panel Ministry of Finance