Post on 22-Oct-2021
PEJABAT PELAKSANAAN GST
KEMENTERIAN KEWANGAN 1
GST SEMINAR FOR
AUTOMOTIVE INDUSTRIES
2014
SPECIAL SCHEMES
KHILMIE BIN GHAZALI
Unit Khas GST, JKDM, Putrajaya.
Venue : Grand Bluewave, Shah Alam.
Date : 25 March 2014
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APPROVED TRADER SCHEME (ATS)
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APPROVED TRADER SCHEME (ATS)
• Approved Trader Scheme (ATS) Sec. 71 (1)-(2)
DG is allowed to suspend the payment of tax chargeable on goods imported by any taxable person
Approved person who is granted approval for ATS is
allowed to suspend GST on the importation of goods GST due on all goods imported in a particular month
would be accounted for in that month (the month where importations take place)
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Overseas
person
Approved
person
ATS - Concept
Malaysia ATS
Approved person under ATS imports goods
1.
GST is
suspended
Customs no.1
2. Makes declaration
on imported goods
GST-03
Amount of GST
Suspended
3. Approved person declares the total amount of GST suspended in a taxable period
APPROVED TRADER SCHEME (ATS)
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AA Pte Ltd
overseas
Malaysia
Port (December 20XX)
Value of imported
Goods (CIF + Duty
Import )= RM100000
GST 6%= RM6000
XX Sdn Bhd
ATS approval
GST-03 (December
20XX)
Customs no.1
GST is
suspended
Total value of goods
imported under ATS
= RM100,000
Total value of GST
suspended= RM6000
ATS - Concept
APPROVED TRADER SCHEME (ATS)
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Persons eligible for ATS:
Companies located within Free Industrial Zone (FIZ)
Licensed Manufacturing Warehouse (LMW)
International Procurement Centre (IPC)
Regional Distribution Centre (RDC)
Toll manufacturers under ATMS
Jewellery manufacturers under AJS
Companies with turnover above RM25 million and at least 80% of their supplies made are zero-rated
Any other person approved by the Minister
APPROVED TRADER SCHEME (ATS)
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Approval subject to the following criteria: Must be registered under Sec. 20 of the GST Act 20XX
Participant must make wholly taxable supply
Must be a registered user of electronic service
Must submit monthly GST return
Must makes declaration on the importation of goods
electronically
Must have good compliance record as a GST payer
Must have good accounting and internal control system
Must furnish security if required; and Any other conditions as may be determined by DG
APPROVED TRADER SCHEME (ATS)
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Goods Not Eligible under ATS -
Liquor, beer, wine and spirits
Tobacco and tobacco products
Any goods to which input tax credit is disallowed (blocked input tax)
Goods for personal use and non-business use
APPROVED TRADER SCHEME (ATS)
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ATS – Group Registration A company registered under group registration is allowed
to apply for this scheme
Representative member responsible to declare the amount of tax suspended in GST return
Goods imported under ATS must be used for business
Imported goods cannot be sold or distribute among other
members
APPROVED TRADER SCHEME (ATS)
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Administratively the RMC will monitor the approval
Application can be made in a Special Scheme Form
Status of the applicants
Sales turnover and the details of zero-rated supplies per annum
Approval would be given for a period of 2 years
Approval subject to renewal and notices would be sent 2 months before
expiry date. Second notice will be issued 14 days before expiry date
The approval of this scheme will be revoked by DG if
provided false, misleading or inaccurate declaration
ceased to satisfy any eligibility requirements
failed to comply any conditions imposed
applied to deregister by the approved person
APPROVED TRADER SCHEME (ATS)
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APPROVED TOLL MANUFACTURER
SCHEME (ATMS)
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APPROVED TOLL MANUFACTURER SCHEME (ATMS)
• Approved Toll Manufacturer Scheme Sec. 72(1)-(8)
Any taxable person (TM) are allowed to disregard the supply of goods (processed goods) and the supply of services for and to his overseas principal (who is belongs in a country other than Malaysia)
Any person (belongs in Malaysia) who receives the
processed goods from the TM shall account and pay tax as if he had himself supply the goods and acquired the goods in the course of furtherance his business
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APPROVED TOLL MANUFACTURER SCHEME (ATMS)
Recipient accounting
ATMS - concept
Overseas
Principal
Local Customer Toll Manufacturer
TM imports
consigned goods
from the overseas
principal (ATS)
TM drop-ships finished
goods to local customer
of overseas principal
Malaysia
Overseas principal
invoices local customer
on finished goods
received
TM invoices overseas
principal for value-
added services
(disregard) 1.
2.
3. 4.
Local supplier
Local supplier deliver
goods on behalf of OP (ZR)
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Eligibility for approved under the ATMS Any toll manufacturer (a taxable person) who has contract(s) with
overseas principal (not a taxable person) He carried out value added activities with the overseas principal:
worth RM2 million or more (excluding the cost of raw materials supplied or belonging to the overseas principal) per annum; and 80% of the processed goods must be exported;
What types of value added activities are allowed under ATMS?
related to manufacturing, treatment, processing, finishing, assembling and other manufacturing-related works on consigned goods
APPROVED TOLL MANUFACTURER SCHEME (ATMS)
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Upon
Application
of ATMS
(principal)
Expected
drop shipment
under toll
manufacturing
per annum
Other
taxable
supplies
In Malaysia
per annum
Total
Turnover
for
registration
(exclude
supplies
under TM)
Liability for
registration
Eligibility for
ATMS
P1 RM 300,000.00 - 0 No Yes
P2 RM300,000.00 RM100,000 RM100,000 No Yes
P3 RM600,000.00 - 0 No Yes
P4 RM400,000.00 RM200,000 RM200,000 No Yes
P5 RM400,000.00 RM500,001 RM500,001 Yes No
Approval under ATMS subject to:
The taxable supplies made by overseas principal other than toll manufacturing
activities are below the threshold
Eligibility to apply for ATMS
APPROVED TOLL MANUFACTURER SCHEME (ATMS)
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Approval
under
ATMS
Years Drop shipment
under ATMS
Other taxable
supplies in
Malaysia
Liability for
registration
Eligible of ATMS
ATMS P1 Year 1 RM300,000 0 No Yes
Year 2 RM500,000 0 No Yes
Year 3 RM700,000 0 No Yes
ATMS P2 Year 1 RM300,000 0 No Yes
Year 2 RM500,000 RM200,000 No Yes
Year 3 RM700,000 RM600,000 Yes No longer eligible for
ATMS
Eligibility of approval under ATMS depends on the status of overseas principal
If taxable supplies made by overseas principal other than the supplies made under ATMS
exceeded the threshold, he is liable to be registered
Not eligible for ATMS
Eligibility under Approved Toll Manufacturer Scheme
APPROVED TOLL MANUFACTURER SCHEME (ATMS)
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APPROVED TOLL MANUFACTURER SCHEME (ATMS)
Accounting of GST under ATMS
The supply is made by overseas principal
Local customer (registered person & non-registered person ) will account for output tax on the processed goods received by way of “Recipient Accounting”
Registered person – GST return (GST-03)
Non-Registered person – prescribed form (GST-04) Time of supply to account for GST under ATMS
The tax on the supply of the treated or processed goods received need to be accounted for based on the following (whichever is earlier): (a) When a payment in respect of the supply is made; or (b) When the recipient receives an invoice from overseas
principal relating to the supply
ATMS – Time of Supply
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APPROVED TOLL MANUFACTURER SCHEME (ATMS)
Example: “Recipient Accounting”
Toll Manufacturer (A) delivers processed goods on behalf of overseas principal to the
local customer (B) on 30 April 2015
Overseas principal issued an invoice to local Customer (B) with the amount of
RM200,000.00 on 5 May 2015
If the local customer is a registered person, he has to account GST amounting
RM12,000 (6%XRM200,000.00)
If Local customer not registered under GST? OUTPUT TAX = RM12,000 INPUT TAX = RM12,000 Net Tax = 0
GST Return - May 2015(GST-03)
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APPROVED TOLL MANUFACTURER SCHEME (ATMS)
GST No.4 (May 2015)
Value of supply RM200,000.00
GST amount payable RM12,000.00
If local customer is not a registered person
he has to account GST amounting RM12,000.00 (RM200,000 X 6%) in a prescribed form (GST-04)
he is not eligible to claim the tax paid as input tax credit the GST needs to be accounted not later than the last day of the
subsequent month from the month in which the supply is made
ATMS - Recipient Accounting
Prescribed Form
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APPROVED TOLL MANUFACTURER SCHEME (ATMS)
Approval subject to the following criteria:
Must be registered under Sec. 20 of the GST Act
Must be a registered user of electronic service
Must submit monthly GST return
Must have good compliance record as a GST payer
Must have good accounting and internal control system
Must furnish security if required; and
Any other conditions as may be determined by DG
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APPROVED TOLL MANUFACTURER SCHEME (ATMS)
Administratively the RMC will monitor the approval
• Application can be made in a Special Scheme Form Details of the Toll Manufacturer Details of overseas principals and the contracts Details of the local customers
• Approval would be given for a period of 2 years • Approval subject to renewal and notices would be sent 2 months before expiry
date. Second notice will be issued 14 days before expiry date • The approval of this scheme will be revoked by DG if
provided false, misleading or inaccurate declaration ceased to satisfy any eligibility requirements failed to comply any conditions imposed applied to deregister by the approved person
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WAREHOUSING SCHEME (WS)
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WAREHOUSING SCHEME (WS)
• Under WS
Importer/owner of the imported goods is allowed to suspend the payment of GST at the time of importation on goods imported and deposited in a warehouse.
The imported goods will be subject to GST when it triggers the duty point that is the time when such imported goods are taken out from the warehouse. The value of the imported goods is its customs value.
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WAREHOUSING SCHEME (WS)
• GST on goods deposited into the warehouse to be suspended • GST on goods moved from one warehouse to another warehouse to
be suspended • Intermediate supplies within a warehouse to be disregarded • The last supply is subject to GST (trigger the duty point) • Goods released to local market to be subjected to GST • Goods released to overseas market to be zero- rated • All goods and services consumed in warehouse to be standard-rated
WS - GST Treatment
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WAREHOUSING SCHEME (WS)
• GST on goods deposited suspended
• Supplies within warehouses disregarded
Warehouse 1
• GST on supplies received suspended
• Supplies within warehouses disregarded
Warehouse 2 • GST on supplies received suspended
• GST on supplies release from warehouse will trigger the duty point
Warehouse 3
• Goods released to local Markets to be subjected to GST
• Goods released to overseas Markets to be zero- rated
goods and services consumed in warehouse are standard rated
Imported
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WAREHOUSING SCHEME (WS)
Type of warehouses license under Customs Act 1967: Customs warehouse
Licensed warehouse
Duty free shops
Inland clearance depot
Determining the value and calculating GST:
The value of the last supply shall be treated as including any duties (whether customs duty or excise duty or both, if any)
The tax on the supply shall be payable at the duty point, together with the duty (if any).
Type of warehouses
• The last supply => the supply which is to be taken out from a warehouse, i.e. the supply that triggers the duty point
• Duty point => the time when the goods are removed from the warehousing scheme
Warehousing Scheme WAREHOUSING SCHEME (WS)
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WAREHOUSING SCHEME (WS)
Example Daim Sdn Bhd keeps his imported goods in a warehouse approved under section 65 of the Customs Act. One of his customers has agreed to buy certain goods at RM10, 000.00 and the goods are to be taken out from the warehouse. How does his customer determine the value of the last supply? (Prevailing import duty rate = 10% and GST = 6%)
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WAREHOUSING SCHEME (WS)
Value of supply = RM 10,000.00 Rate of import duty = 10% Total duty import payable = RM1000.00 (10%X RM10,000.00) Daim Sdn Bhd’s customer needs to declare the following amount: Value for customs purposes = RM 10,000.00 Import duty (10%) = RM 1,000.00 Total value for calculating GST = RM 11,000.00 GST Payable (6% x RM11,000) = RM 660.00
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MARGIN SCHEME (ATMS)
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MARGIN SCHEME (MS)
Normal rule - GST is chargeable on the full value of
goods sold.
Margin Scheme
Margin scheme – allows GST on margin
avoids double taxation as second-hand goods re-enter
the economic cycle.
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MARGIN SCHEME (MS)
Eligibility
A taxable person - who is in the business of buying
and selling second-hand motor vehicles.
approval given by the Royal Malaysian Customs
Department (RMCD)
For GST purposes, used motor vehicle is any used
motor vehicle which has been registered with the Road
Transport Department in Malaysia.
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MARGIN SCHEME (MS)
Under the Margin Scheme
there is no input tax to be claimed on the purchase
(input tax not claimable)
A registered person who does not wish to use the
margin scheme for eligible goods must account for
GST in the normal way.
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MARGIN SCHEME (MS)
GOODS QUALIFYING UNDER THE MARGIN SCHEME
The scheme is applicable for
used motor vehicles (includes vehicles which were
initially subject to sales tax before GST comes into
force)
Goods which were not subject to sales tax before
GST era can qualify under this scheme if the first
sale takes place within GST era. Examples of goods
that fall under this category are motorcycles with
certain c.c. and tractors
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MARGIN SCHEME (MS)
CONDITIONS IMPOSED UNDER THE SCHEME
Any person may apply for this scheme subject to the
following conditions:
(a) must be a GST registered person.
(b) the goods must be previously purchased from an
individual or a non-GST dealer (no GST was
incurred on the purchase); or the goods were
previously bought from a GST MS registered person
who uses the Margin Scheme; or input tax blocked
goods purchased from GST registered person.
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MARGIN SCHEME (MS)
CONDITIONS IMPOSED UNDER THE SCHEME
(c) the goods purchased and sold under the margin
scheme must be substantially the same goods.
However, repair, alterations, refurbishment and
renovations which do not affect the nature and the
essential character of the goods are allowed.
(d) no tax invoice to be issued by the approved person
(supplier) under this scheme and hence no input tax
to be claimed by the purchaser. He must meet the
record keeping requirements of the scheme
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MARGIN SCHEME (MS)
The stock book or similar records that need to be maintained and
kept is as follows:
(a) Purchase details
(i) stock book number;
(ii) date of transaction;
(iii) purchase invoice number;
(iv) seller’s name and address;
(v) vehicle registration, engine and chassis numbers;
(vi) model and make;
(vii) total purchase price.
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MARGIN SCHEME (MS)
(b) Sales details
(i) date of sale;
(ii) sales invoice number;
(iii) buyer’s name and address;
(iv) total sale price;
(v) vehicle registration, engine and chassis numbers;
(vi) model and make.
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MARGIN SCHEME (MS)
(c) Accounting details
(i) purchase price;
(ii) selling price;
(iii) margin in sale;
(iv) tax rate on the date of the sale;
(v) GST due.
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MARGIN SCHEME (MS)
Scenario 1
Down payment > Margin
Scenario 2
Down payment < Margin
Selling Price RM50,000
(inclusive of GST)
RM50,000
(inclusive of GST)
Down payment RM10,000 RM10,000
Loan RM40,000 RM40,000
Cost Price to dealer RM45,000 RM35,000
Margin RM(50,000 – 45,000)
= RM5,000.00
RM(50,000 – 35,000)
= RM15,000.00
GST chargeable
on the sale
6/106 x RM5,000
= RM283.00
6/106 x RM15,000
= RM849.05
GST on
down payment
6/106 x RM10,000
= RM566.03
6/106 x RM10,000
= RM566.03
GST to be
accounted
RM283.00
This amount will be
accounted wholly from
down payment as GST
chargeable on the sale is
limited to RM283.00 only.
RM849.05
This amount will be
accounted partly from
down payment
(RM566.03) and partly
from loan (RM283.02)
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DESIGNATED AREA (DA)
DESIGNATED AREA
What is DA?
• PART XIV of the GST Act(Sections 161-167)
• Refers to Labuan, Langkawi and Tioman
• For the purpose of this Part, ‘Malaysia’ excludes
the designated areas.
Designated area refers to Free Ports ( Langkawi, Labuan and Tioman)
Supply GST Treatment
DA to DA : Goods and services
*No GST chargeable
within the DA: Goods and services
*No GST Chargeable
World to DA: Goods and Services
*No GST chargeable
DA to World: Goods and services
Zero Rated
* Except for petroleum and other goods as prescribed by the Minister
of Finance
DESIGNATED AREA
Supply GST Treatment
PCA to DA:
Goods
Services
*Zero-rated
Standard rated
DA to PCA:
Goods
Services
Standard rated
Standard rated
* Except for petroleum and other goods as prescribed by the Minister
of Finance
DESIGNATED AREA
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OTHER TRANSACTIONS
Gifts
Samples
Warranty
Disposal of assets
Goods lost/destroyed
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Gift
Gift of goods not more than RM500 made in the course or furtherance of business to the same person in the same year :
not subject to GST
Samples
Imported trade sample given relief under GST Relief
Order
Trade samples given for promotion not subject to GST
on conditions
packed differently and labelled ‘sample’ or ‘not for
sale’
samples not packed differently is subject to
business gift rules of RM500
OTHER TRANSACTIONS
Manufacturer’s warranty normally includes:
after–sale services and repairs -not
subject to GST
any replacement of spare-parts free of
charge during the warranty period -not
subject to GST
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WARRANTY
OTHER TRANSACTIONS
48
OTHER TRANSACTIONS
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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Goods Lost / Destroyed Imported goods lost while under customs control subject to GST may apply for remission from the DG
Goods lost while not under customs control if the incident happened before sales took place and proven with
supporting document (such as police report, insurance claim etc) no GST
if unable to prove with relevant documents, Customs has the power to assess and collect GST
Goods lost during delivery
if supply has not taken place - no GST
if supply has taken place (goods made available) - subject to
GST
OTHER TRANSACTIONS
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BUSINESSES’ PREPARATION
51
BUSINESSES’ PREPARATION
GST Implication on Prices
identify existing suppliers
talk to small suppliers to get them registered
review procurement policy to avoid tax cascading
negotiate prices with suppliers to pass on savings
review sales price
pass on savings
absorption of GST
Price Control and Anti Profiteering Act 2011
52
GST Implication on Stock Management
special refund
physical stock take on hand
documents to support refund
audit certificate
BUSINESSES’ PREPARATION
53
GST Implication on Cash Flow
need to analyse cash flow impact
cash recover from customer before GST is due
assess the need to provide for one time fund to cater
for GST payment upfront
review credit terms to customers
review requirement to apply for special schemes
BUSINESSES’ PREPARATION
54
GST Implication on Bad Debts
ensure a proper matching of GST payment to
government and payment received from
customers
monitor payment from customers
understand evidence of ‘reasonable efforts’
BUSINESSES’ PREPARATION
55
GST Implication on Invoicing
identify whether standard rate, exempt, zero rate or
out of scope supply
issuance of full and simplified tax invoice
requirement not to issue tax invoice for imported
services and second hand goods under margin
scheme
21 days rule
self billed invoice
BUSINESSES’ PREPARATION
56
GST Implication on Output Tax
gifts > RM500 subject to GST
commercial samples in a form not ordinarily
available for sale to the public not subject to GST
deemed supply eg, private use and disposal of
business assets subject to GST
supplies to connected persons
BUSINESSES’ PREPARATION
57
GST Implication on Input Tax
blocked inputs not claimable
incidental financial supplies
claim > RM500 to be supported by full tax invoice
De Minimis rule
BUSINESSES’ PREPARATION
58
GST Implication on Contracts
avoid long term contract without legal review
absorption of GST
pricing strategy to pass on savings
GST Implication on Human Resource
enhance staff understanding of GST
avoid unnecessary mistakes
false information may open to audit case
review policy on employee benefits
BUSINESSES’ PREPARATION
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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
use of online submissions to the Customs
computerised system
ready made software
upgrading present system
BUSINESSES’ PREPARATION
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FORMS NO. TITLE
GST-01 Application for Goods and Services Tax Registration
GST-02 Application for group / Joint ventures registration
GST-02A Group member or venturer registration
GST-02B Notice of Change of representative member or venture operator
and removal of group member or venturer
GST-03 Goods and Services Tax Return
GST-04 Goods and Services Tax Declaration for non-registrant
GST-04A AUCTION OR SALE IN SATISFACTION OF DEBT DETAILS FOR
GST REGISTERED PRINCIPAL
GAZETTED FORMS
GST FORMS
End of Presentation Royal Malaysian Customs
(gst.customs.gov.my)
Thank You
GST Unit