Main Features of Goods and Services Tax (GST)

Our Prime Minister, Datuk Seri Najib Razak announced the introduction of the

Goods and Services Tax (GST) in Budget 2014 on 25th October 2013. GST will be

effective on April, 2015 and replace the current sales and services tax.

GST also known as value-added concept, which is multi-stage tax. GST will

be charged on all taxable supplies of goods and services trading in Malaysia by a

taxable resident. GST is tax neutral to businesses. GST charged to all intermediaries

in the production and distribution chain. Businesses which have registered for GST

are allowed to claim input tax credit. GST also is a broad-based tax since all supplies

of goods and services will involve GST. Exemption is given to zero-rated supplies

and exempt supplies, or those fall within particular special schemes. Besides that,

imported services will be subject to GST.

Standard-rated Supplies

Standard rate supply those goods and services that are charged GST at a fixed

rate. GST is collected by the seller and paid back to government. They can recover

back the difference between the input and output tax when their input tax is higher

than their output tax.

Zero-rated Supplies

Businesses can claim input tax credit in purchasing these supplies. Customer

will be charged at zero rate of GST. Most basic food items such as meats, fish,

cooking oil, rice, sugar, salt, vegetables and first 200 units of electricity supply used

monthly for domestic consumers are classified into this category.

Exempt Supplies

These businesses cannot claim tax credit in purchasing these supplies. At the

same time, output tax is not allowed to change to consumer. Certain financial

services, private healthcare services, domestic passenger transportation, education

services, agriculture land supply and residential properties will be exempted from

GST based on the draft proposal of exemption supplies list in the Budget 2014.

Reference

http://www.yycadvisors.com/overview -of-gst-malaysia.html

www.wongpartners.com/files/.../WP/al_wp_goodservicestax_nov13.pdf

http://www.gstcustoms.gstmalaysia.org/images/Basic-Understanding-of-GST-

Customs-Malaysia.pdf

http://www.klsfea.org.my/sites/default/files/Salient%20KLSFEA%202-1.pdf

http://www.smecorp.gov.my/vn2/sites/default/files/Salient%20Features%20of

%20GST.pdf