Customs` Malaysia GST Seminar Slides

SEMINAR GST
GST Treatment
S14(2) Industry
Date : 18 June 2014
Venue: Pullman, Putrajaya
Agenda
1
Charging Output Tax
2
Tax invoice
3
Entitlement of Input tax
4
GST Treatment
Transitional Period
5
7
Taxable Period
Submission of GST Return
8
Business Preparation
6
2
1
3
Input tax and Output tax
INPUT
OUTPUT
Goods (raw materials,
machines and other
goods)
Services (rental
telephone and
insurance)
Business
Utilities
(electricity and
water)
GST on inputs
= Input tax
Goods (e.g.
furniture,
tableware,
television)
Services ( IT,
Consultancy)
Claimed
input tax
GST on outputs
= Output tax
4
Output Tax
Scope and charge
• GST is charged on
 the taxable supply of goods and services
 made by a taxable person
 in the course or furtherance of business
 in Malaysia
• GST is charged on imported goods & services
5
Output Tax
GST charged on
taxable supplies (sales of goods / services)
deemed supplies
 disposal of business assets
 private use of business asset
 imported services
 goods sold in satisfaction of a debt
 gifts costing more than RM 500
6
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
7
Imported Services
Malaysia
IT Tex_.UK
ABC Sdn.Bhd
(Taxable person)
Value of Services = RM10,000.00
GST = 6% X RM10,000 = RM600
GST-03
OUTPUT TAX
=
RM600
INPUT TAX
=
RM600
Port
overseas
8
2
9
Tax Invoice
Issuance of Tax Invoice
Tax invoice shall be issued by every registered person who
makes any taxable supply in the course or furtherance of any
business in Malaysia
Tax invoice can be issued to the customer either :
 Hard copy
 Electronic
Must issue within 21 days after supply has taken place
(Time of supply)
Containing prescribed particulars
10
Tax Invoice
Types of tax invoice when making taxable
supplies
 full tax invoice
 simplified tax invoice
11
Tax Invoice – Full Tax Invoice
The following particulars are required in the full tax invoice;
(a) the words “tax invoice” in a prominent place;
(b) the tax invoice in serial number;
(c) the date of issue of the tax invoice;
(d) name of supplier, address and GST identification number;
(e)the customer’s name (or trading name) and address;
(f)a description sufficient to identify the goods or services supplied
(g) for each description distinguish the type of supply for standard rate, zero rate
and exempt, the quantity of goods or the extent of the services and amount
payable, excluding GST;
(h) any discount offered;
(i) the total amount payable excluding GST, the rate of tax and the total
tax chargeable shown as a separate amount;
(j) total amount payable including the GST charged; and
(k) any amounts referred to (i) and (j) must be expressed in Malaysian currency.
12
Example of Full Tax Invoice
Supplier’s name, address
and GST identification
number
KILANG KASUT SEDAP PAKAI SDN.BHD.
Lot 123, Jalan Pengkalan, 31500 Lahat, Perak
(GST ID No : 100001/2015)
Tel : 05-3349876
Customer’s name &
address
To : Syarikat Kasut Ali Sdn. Bhd.
No. 27, Jalan Maju Jaya,
31400 Ipoh, Perak
Invoice No: 0001111
TAX INVOICE
Description
Date : 25 Jun 2015
D/O No : S000345
Date of Tax Invoice
The words “Tax Invoice”
clearly indicated
Serial
No.
Tax Invoice serial
number
Quantity
Unit Price
Total
(RM)
(RM)
1.
School Shoes SS1201
200
8.00
1,600.00
2.
School Shoes SS1210
200
10.00
2,000.00
3.
Sport Shoes SP2315
50
25.00
1,250.00
4,850.00
Quantity of goods or
extent of the services
supplied
Discount @ 10%
(485.00)
Total before GST
4,365.00
Add GST @ 6%
261.90
4,626.90
Total Sales
Rate of GST
…………………………………………………………
KILANG KASUT SEDAP PAKAI SDN.BHD.
Total amount
payable, excluding
GST
Total amount of GST
charged
Total amount payable,
inclusive of GST
3
14
Allowable Input Tax
Supplies
 taxable supplies
 standard rated or zero rated supplies
 disregarded supplies (supplies within group, supplies
made in warehouse, supplies between venture operator
and venturers and supplies between toll manufacturer
and overseas principal)
 supplies made outside Malaysia which would be taxable
supplies if made in Malaysia
 any other prescribed supply (Fixed Input Tax Recovery)
15
Input Tax Credit
Prerequisite for ITC:
 Claimant must be a taxable person
 Must have a valid tax invoice





full tax invoice
simplified tax invoice - claim the input tax up to a limit of RM30.00 if name and address
of recipient is not stated in invoice (GST at 6%)
invoice issued by approved person under Flat Rate Scheme
Customs No 1 /Customs 9 (imported goods)
document to show claimant pays imported services
 Invoice issued under the name of the claimant
 Goods and services acquired are not subject to any input
tax restriction e.g., motorcars
 Good and services are acquired for the purpose of making
taxable supply
16
Input Tax Credit
Input Tax Mechanism
 Tax paid on inputs to be offset against the output tax in the
relevant taxable period
 Subject to a time limit of 6 years from the date of return
required to be made
 Apportionment rule to apply for a mixed supply
 Refund to be offset against other unpaid GST, customs and
excise duties
 Net tax to be refunded within
 14 working days for on-line submission
 28 working days for manual submission
17
Non Allowable Input Tax
Blocked input tax
 passenger motor cars including hiring of car
 family benefits
 club subscription fee
 medical and personal accident insurance
 medical expenses
 entertainment expenses for family members
and potential clients
18
Blocked Input Tax
Passenger motor car
•
adapted for carrying not more than 9 passengers including
the driver
•
unladen weight of which does not exceed 3000kg
Exclusion

public service or tourism motor cars

hire and drive cars or cars for sale by second hand dealers

cars used for driving instructional purposes

cars forming part of stock in trade

cars used exclusively for business purposes approved by
Director General
19
Blocked Input Tax
Family benefits

any benefits (including hospitality of any kind)
provided by the taxable person for the benefit of any
person who is the wife, husband, child or relative of
any person employed by the taxable person for the
purposes of any business carried on or to be carried
on by the taxable person
20
Blocked Input Tax
Club subscription fee

any joining fee, subscription
fee, membership fee, transfer
fee or other consideration
charged by any club,
association, society or
organization established
principally for recreational or
sporting purposes or by the
transferor of the membership
or such club, association,
society or organization
21
Blocked Input Tax
Medical and personal accident insurance
Any payment or contribution for insurance
contracts:►To insure and cover the cost of medical
treatment as well as cost of personal accident in
which the insured is any person employed by the
taxable person
22
Blocked Input Tax
Medical expenses

any medical expenses in connection
with the provision of medical treatment
to any person employed by a taxable
person
Entertainment expenses
Spouse or family members
Potential clients
Employees
Clients
23
4
24
Exemption under s14(2) CA 1967
14.(2) The Minister may in any particular case—
(a) exempt any person from the payment of the whole or
any
part of the customs duties or any other prescribed fees
or charges which may be payable by such person on any
goods; or
(b) direct the refund to any person of the whole or any
part
of the customs duties or any other prescribed fees or
charges which have been paid by such person on any
goods,
25
Different Treatment
Treatment
Exemption
Goods
Current
GST
Import Duty
Import Duty
Sales Tax
GST payable
Raw
Raw
material/components material/components
Machine
Machine
26
Facilities under GST
Special schemes:
Special schemes are introduced to alleviate negative cash flow
impact to businesses
 Approved Trader Scheme (ATS)
27
Approved Trader Scheme (ATS)
•
Under ATS
 ATS participants are allowed to suspend GST on the importation
of goods
 Goods imported is used in the course or furtherance of business
 The amount of GST suspended needs to be declared in the GST
return for the taxable period to which the suspension relates
• GST Regulation provides :






Definition
Application for approval
Eligibility for ATS
Goods not eligible for the scheme
Commencement and expiry of the scheme
Revocation of approval
28
28
Approved Trader Scheme
Malaysia
AA Pte Ltd
ATS approval
XX Sdn Bhd
GST-03 (June 2015)
Total value of goods
imported under ATS
= RM100,000
Port (June 2015)
Value of imported
Goods (CIF + Duty
Import )= RM100000
GST 6%= RM6000
overseas
Customs no.1
Total value of GST
suspended= RM6000
SPL1122334455
GST is
suspended
29
GST Return
30
ATS
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; or
• Any other person approved by the Minister
31
ATS
Approval subject to the following criteria:
•
•
•
•
•
•
•
•
•
Must be registered under Sec. 20 of the GST Act 20XX
Must make wholly taxable supply
Must be a registered user of electronic service
Must submit monthly GST return
Must make 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
32
ATS
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
33
5
34
Agenda
A
SUPPLY SPANNING GST
B
REGISTRATION
35
Supplies Spanning GST
What is supply spanning GST?
 Payment or invoice before appointed date and supply takes place on
and after appointed date or vice versa e.g. sales of goods, airline
tickets and cinema
General Rule
 Any supply before appointed date is not subject to GST
 Any supply on or after appointed date is subject to GST
Exception to general rule
 Supply of warranty
 Provision of goods where sales tax has been charged
 Provision of services where service tax has been charged
 Non-reviewable contracts
36
Payment / invoices on supply of goods
BEFORE GST
ON OR AFTER GST
IMPLICATION ON GST
Taxable goods supplied
(available / removed)
Payment received /
Invoice issued
Subject to SALES TAX
Invoice issued with sales
tax
Taxable goods
supplied
Subject to sales tax
Full Payment received / part Taxable goods
payment received with
supplied
sales tax paid
Subject to sales tax on the whole supply
or part of the supply that relates to
payment of sales tax
Invoice issued / Payment
received by non-licensee
Taxable goods
supplied
Value of supply deemed inclusive of
GST and account in the 1st taxable
period after the appointed date
Invoice issued / Payment
received
Supply non-taxable
goods under Sales Tax
Act 1972.
Value of supply deemed inclusive of
GST and account in the 1st taxable
period after the appointed date
37
Supplies spanning GST
Before GST
On or After GST
Prescribed Services
supplied
Payment received
Payment received /
service tax charged
or paid
Prescribed Services
supplied
Payment received /
invoice issued
Goods imported
Non-prescribed
services supplied
Prescribed services
supplied by nonlicensee
Release from customs
control
Implication on GST
Not subject to GST
Subject to service tax
Not subject to GST
Subject to service tax
Value of supply deemed inclusive
of GST and account in the 1st
taxable period after the appointed
date
Subject to GST and date of
importation is when released from
customs control
38
Registration

Mandatory:

Calculation of taxable turnover for registration is based
on total value of taxable supplies for 12 mths period.
Voluntary Registration
Registration of Branches
Group registration




Provide taxable supplies of goods and services and
taxable turnover has reach threshold of RM 500,000
How to Access TAP?
1. Through Customs Portal (www.customs.gov.my)
How to Access TAP?
2. Through GST Portal (www.gst.customs.gov.my)
Click Here
Register for GST
1. Click the [Register For GST] hyperlink
Register for GST
1. Click [Next] to continue to the next step
6
45
Taxable period
• Regular interval period where a taxable person accounts and
pays GST to the government
• The taxable period will be determined at the time when the GST
registration is approved
→ quarterly basis
 for businesses with annual turnover not exceeding RM5 million
→ monthly basis
 for businesses with annual turnover exceeding RM5 million
• A taxable person may apply to be placed in any other category
other than his pre-determined taxable period
46
7
47
Submission of GST Returns
Filing of Returns
 GST returns must be
submitted not later
than the last day of
the month following
the end of the taxable
period
 Electronic filing is
encouraged
48
Submission of GST Returns
GST Return must be submitted for any condition as follows:
 Payment
: output tax > input tax
 Refund
: output tax < input tax
 No payment
: output tax = input tax
 no output tax, no input tax
(nil return)
Late filing return commits an offence and be liable to a fine not
exceeding fifty thousand ringgit or to imprisonment not
exceeding 3 years or to both
49
Submission of GST Returns
When to submit GST Return
 monthly taxable period
 quarterly taxable period
50
Submission of GST Returns
GST charged on
taxable supplies
Output Tax
less
GST paid on
business purchases
Input Tax
equal
minus (-)
Refund to
taxable person
Net GST
plus (+)
Pay GST to
Government
51
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52
BUSINESS PREPARATION FOR GST
Government
Human
Resource
Sales &
Marketing
System
& Processes
GST
Readiness
Accounting
& Finance
Purchasing
& supply chain
Special
Refund
53
BUSINESS PREPARATION FOR GST
GST Implication on System
 review system and processes
 perform complete mapping of transactions to
identify required changes
 GST liability on every transaction and deadlines
 use of online submissions to tax agency
 computerised system
 ready made software
 upgrading present system
54
BUSINESS PREPARATION FOR GST
GST Implication on the Repeal of Sales Tax and Service
Tax
 Chargeability
 Facilities under the taxes repealed
 Taxable goods and services
 Non taxable goods and services
 Invoices issued and payment received before implementation date
 Invoices issued or payment received after implementation date
 Obligation to submit return and pay tax
 Invoice issued deemed inclusive of GST
55
BUSINESS PREPARATION FOR GST
GST Implication on Registration
 can choose to be in the GST system
 are required to be in the GST system
 pre-registration
 registration exercise begins 6 months before date of GST implementation
 mandatory registration
 to register 3 months before date of GST implementation
 voluntary registration
 input tax consideration
 consumer profile
56
BUSINESS PREPARATION FOR GST
Areas
GST Implications
Pricing
Policies
 Change in selling price to reflect GST replacing
SST
 Negotiate with suppliers/vendors on prices of raw
materials/trading stocks
 Input tax claimable
 Review procurement policy to avoid cascading
effect
 To assess customers reaction on price
 Anti Profiteering Act will come in force
Stock
Management
 Monitor business stocks (e.g. raw materials)
- Special refund
 conduct stock take
- Deregistration
57
BUSINESS PREPARATION FOR GST
Areas
Cash Flow
GST Implications
 Need to analyze cash flow impact
 to assess the need to create a one time
fund to cater for GST payment up-front
 cash maybe recovered from customer
before GST is due
Credit Terms
 Need to review credit terms and issuance of
invoice
 timing differences may impact cash flow of
business
 may result making payments of GST before
collection from customers
58
BUSINESS PREPARATION FOR GST
Areas
GST Implications
Bad debts
 Ensure a proper matching of payment of tax to
government and payment received from
customers
 Ensure GST compliance by reviewing the
accounting / recording system
 Bad debt claims evidence of ‘reasonable efforts’
to recover the debt
Advertising
 Requirement to show price as GST inclusive
59
BUSINESS PREPARATION FOR GST
Areas
Invoicing





Systems /
software
GST Implications
Identify type of each supply - Standard Rate,
Zero Rate, exempt or out of scope
Pricing– GST inclusive / exclusive
Simplified Tax invoice
Full tax invoice necessary
Accounting system – able to capture and keep
track GST in financial year
 On line submission to Customs Department
 Enhance existing system
60
BUSINESS PREPARATION FOR GST
Areas
Staff Training
Contract
GST Implications
 To upgrade understanding of GST
 To avoid unnecessary mistake
 False/wrong information declared may
open for audit case
 Monitor business stocks (e.g. raw
materials)
- Special refund
- conduct stock take
 Computerised accounting system
 Legal advice with regards to contract
 Avoid long term contract without legal
review
61
Thank you
62
INQUIRY
1
Ketua Setiausaha,
Perbendaharaan Malaysia
Panel Kajian Semula Cukai
Komplek Kementerian Kewangan,
No.5, Persiaran Perdana,
Pusat Pentadbiran Kerajaan Persekutuan Malaysia,
62596 PUTRAJAYA.
Tel : 03-88823000
2
Customs Call Centre (CCC)
Tel:
03- 78067200
Fax: 03- 78067599
Email: [email protected]
3
GST PORTAL
gst.customs.gov.my
63