SST IMPLEMENTATION

SALES TAX & SERVICE TAX

IMPLEMENTATION MODEL
CHAN TEK KAI
SENIOR ASSISTANT DIRECTOR OF CUSTOMS I
18-SEPT-2018

Royal Malaysian Customs Department

 GST SST

SST
GST Started GST Zero Rated
1 September
• 1 April 2015 • 1 June 2018 – 2018
31 August
2018
3 Months Tax
Holiday

1 April 2015 1 June 2018 1 September 2018

to to
31 May 2018 31 August 2018
 CONTENT OF BRIEFING

ADVANTAGES OF SST
• Legislation • Sales Tax Valuation
• Scope And Charge • Registration
• Sales Tax & Service Tax • Returns / Payment
Mechanism • Exemption & Facilities
• Interpretation Of Manufacture • Special Rules
• Taxable Person • Accounting
• Taxable Goods & Taxable • Miscellaneous
Services • Transitional Issues
• Rate Of Tax

3
 1: SMALLER COVERAGE UNDER SST

Tax coverage under CPI Basket

GST
GST
60%

SST
SST
38%

0% 10% 20% 30% 40% 50% 60%

SST GST
 2: BIGGER SAFETY NET UNDER SST

Goods exempted under Sales Tax

6000

 GST (0%) - 545 items

5000  SST (exempted) – 5,443
items
4000

3000 10
X
2000

1000

545 5443
0
GST SST
 EXEMPTED ITEMS(e.g)
Live animals Construction services

• Live horses
• Live sheep and goats Construction materials
• Live fish • Bricks
• Cement
Food items • Sand

• Rice Most Capital goods

• Beef, mutton and chicken
• Seafood eg fish, prawn, squid
• Vegetables e.g. tomato, cauliflower, cucumber) General goods
• sardine • Newspaper
• Cooking oil • Books
• Drinks eg coffee • Wheelchair
• Bread and cereal products • Sanitary pads
• Fish ball/ fish cake • Baby diapers
• Pasta/ noodle/ Spaghetti • Adult diapers
• Soya sauce • Baby carriages
• Chili Sauce/ Tomato Sauce
Vehicle
Medicine
• Bicycle
• Motorcycle below 250 cc
• Fork-lifts and crane
 TAXABLE ITEMS (e.g)
PROCESSED FOODS FURNITURE BIG TICKET ITEMS

• Sofa • Aeroplane
• Processed fruits • Mattress • Helicopter
• Fruit juice
• Yacht
• Butter, jams and cheese
• Snowboarding equipment
• Cod liver oil PERSONAL ITEMS • Luxury ships
• Ferries
OTHER • Spacecraft
• Shampoo
• Toothpaste
• Engine oil for cars and motorcycle • Shower gel
MOTOR VEHICLES
• Brake fluid
• Sanitary equipment eg toilet bowl and ELECTRICAL APPLIANCES
sinks
• Tobacco products • Washing machine • Passenger motorcars
• Alcoholic beverages • Television • Motorcycles > 250cc
• Construction material eg. Tiles, ceramic • Radio
wares, window and door framed • Electronic devices
• Smartphones
• Computer devices
FOOD & DRINKS • Printer

• Fizzy drinks (Pepsi, 100+) WATCHES/CAMERAS/SPECTACLES

• Chocolate
• Ice cream
 3: SMALLER COVERAGE OF GOODS UNDER SST

GOODS SUBJECT TO SST

12,000
11,197
10,000

8,000

6,000 5,612

4,000

2,000
793
-
GST 6% SST 10% SST 5%
 4:SMALLER COVERAGE OF SERVICES UNDER SST

COVERAGE OF SERVICES GST vs SST

70.00%
64.83%
60.00%

50.00%

40.00% 43.49%

30.00%

20.00%

10.00%

0.00%
GST - 6% SST - 6%
 5: SINGLE STAGE SST VS MULTI-STAGE GST

NUMBER OF REGISTRANTS

GST GST GST

500,000

450,000 472,000

400,000

350,000 Manufacturer Wholesaler Retailer

Peruncit Consumer
Pengguna

300,000 SST

250,000

200,000

150,000

100,000
95,000
50,000 NO MORE COMPLIANCE COST
TO ABOUT 80% OF TRADERS
-

GST SST
 6: NO MORE OUTSTANDING REFUND

MANY TRADERS IMPUTED REFUNDS INTO

THEIR PRICING BACAUSE OF THE DELAY

GST GST GST

Refund Refund Refund

Manufacturer Wholesaler Retailer Consumer

SST
SALES TAX
MODEL

12
 Sales Tax Legislation
Act
•Sales Tax Act 2018

Regulations
•Sales Tax Regulations 2018
•Sales Tax (Customs Ruling) Regulations 2018
•Sales Tax (Compounding of Offences) Regulations 2018
•Sales Tax (Determination of Sale Value of Taxable Goods) Regulations 2018

Order
•Sales Tax (Amount Of Sale Value Of Taxable Goods Manufactured) Order 2018
•Sales Tax (Rates Of Tax) 2018
•Sales Tax (Goods Exempted From Tax) Order 2018
•Sales Tax (Person Exempted From Payment of Sales Tax) Order 2018
•Sales Tax (Exemption From Registration) Order 2018
•Sales Tax (Imposition of Tax In Respect Of Designated Areas) Order 2018
•Sales Tax (Imposition Of Tax In Respect Of Special Areas) Order 2018
•Sales Tax (Appointment of Date of Coming Into Operation) Order 2018

13
 SCOPE AND CHARGE of Sales Tax

Sales tax is a tax charged and levied –

 on taxable goods manufactured in Malaysia by a registered

manufacturer and sold, used or disposed by him;
 on taxable goods imported into Malaysia.

Sales tax is not charged on:

 goods listed under Sales Tax (Goods Exempted From Sales Tax)
Order;
 certain manufacturing activities are exempted by Minister of
Finance through Sales Tax (Exemption From Registration)
Order.

Note : Malaysia excludes designated area and special area

14
 HOW SALES TAX WORKS?

Manufacturer Wholesaler Retailer Consumer

Element of sales
Govt collects tax tax embedded in
at the manufacturer’s the price paid
level only by consumer

15
 INTERPRETATION

• Manufacture defines as a conversion of materials by

manual or mechanical means into a new product by
changing the size, shape, composition, nature or quality
of such materials and includes the assembly of parts into a
piece of machinery or other products. However, manufacture
does not include the installation of machinery or equipment
for the purpose of construction.

• In relation to petroleum, any process of separation,

purification, conversion, refining and blending.

16
 TAXABLE PERSON

Taxable person is a person who manufactures taxable

goods and is:

- liable to be registered;
• reached sales threshold
 Manufacturer - RM 500,000.00
 Sub-contractor – RM 500,000.00

- registered under Sales Tax Legislation.

• mandatorily registered
• voluntarily registered

17
 TAXABLE GOODS AND RATES OF TAX

Goods which are not exempted by Minister of Finance

through Sales Tax Exemption Order will be charged sales tax
at various rates prescribed.

Sales tax is an ad valorem tax and different rates apply (5%

and 10%) based on group of taxable goods as indicated in the
provision.

Sales tax for petroleum is charged on a specific rate which is

different from other taxable goods.
(Eg: Proposed 2707.10.0000 – Benzol-Benzene
Sales Tax Rate is at RM0.29/litre)
18
 SALES TAX VALUATION

Sales value of locally manufactured goods will be determined

based on Proposed Sales Tax (Determination Of Value Of
Taxable Goods) Regulations 2018.

Sales value of taxable good imported into Malaysia represent

the sum of the followings:

• The customs value;

• The amount of customs duty paid or to be paid;
• The amount of excise duty paid or to be paid.

19
 TRANSFER PRICING

FULL ABSORPTION COST FOR CONNECTED PERSONS

UNDER COMPUTED METHOD
Material Cost
Labour Cost
Assists
Engineering, Development Work, Art Work, Design Work, Plans or Sketches
Royalties & License Fees
Excise Duty, And Other Taxes
Factory Overhead
Depreciation
Profit Reported by Others in the Similar Industry
 SALES TAX REGISTRATION
Liability To Register

• Taxable goods manufacturers are required / liable to be registered

when;

– SALES VALUE OF TAXABLE GOODS has exceeded RM500,000 for

12 months period;

• Manufacturers who carry out sub-contract work on taxable goods

where the VALUE of work performed exceeds RM500,000 for 12
months period.

– Taxable goods belong to:

Registered manufacturer, non registered manufacturer and
manufacturer in special area (FIZ and LMW).

Note : Registered Person will be known as Registered Manufacturers

21
 SALES TAX REGISTRATION
Others Registration

• Voluntary registration

– Taxable goods – below threshold.

– Persons who are exempted from registration.

(Exempted manufacturing Activities). Sales Tax
(Exemption From Registration) Order 2018

22
 SALES TAX REGISTRATION
Determination of Turnover

• Manufacturers should calculate the sales value of taxable goods

for a period of 12 months using the following methods:

i. Historical Method;

The total value of taxable goods in that month and the 11

months immediately preceding the month;

ii. Future Method;

The total value of taxable goods in that month and the 11

months immediately succeeding the month.

23
 SALES TAX REGISTRATION
Exemption from Registration

• Manufacturer of non taxable goods*.

• Manufacturer below threshold.

• Sub-contractor manufacturer below threshold.

• Manufacturing activities that have been exempted from

registration. E.g.:
– Tailoring
– Installation incorporation of goods into building
– Jeweller, optician

* Not eligible for voluntary registration

24
 SALES TAX REGISTRATION
Transitional Registration

• Manufacturer who is liable to be registered is required to register before

1st September 2018.
– Registration commencement date will be on 1st September 2018.

• Automatic Registration
– Manufacturers who are GST Registered Persons which have been
identified and fulfilled the required criteria will be registered
automatically as Registered Manufacturer under Sales Tax.
– Registered Manufacturer need to charge tax beginning 1st September
2018.

• Persons Not Registered Automatically

– Person who fulfilled the required criteria to be registered but were not
registered by 1st September 2018 need to apply for registration within
30 days from the commencement date.
25
 RETURN

o Registered manufacturer has to declare SST return every

two months according to the taxable period.

o SST return has to be submitted not later than the last day
of the following month after the taxable period ended.

o SST Return has to be submitted regardless of whether

there is any tax to be paid or not.

o SST Return has to be submitted electronically or by post to

SST Processing Centre.

26
 PAYMENT

o Payment of SST has to be made

 Electronically; or
 By cheque, bank draft and posted to SST Processing
Centre.

o Late payment penalty on the amount of sales tax not paid

 10% - first 30 days period.
 15% - second 30 days period
 15% - third 30 days period
Note:
Maximum penalty 40% after 90 days
27
 EXEMPTION AND FACILITIES
Exemption from Sales Tax:
• Goods – Sales Tax (Goods Exempted From Sales Tax) Order 2018
• E.g. Live animals, unprocessed food, vegetables, medicines, machinery,
chemicals, etc. (List of Goods Exempted From Sales Tax)

• Person – Sales Tax (Person Exempted From Sales Tax) Order 2018
• Schedule A: class of person, e.g. Ruler of States, Federal or State Government
Department, Local Authority, Inland Clearance Depot, Duty Free Shop
• Schedule B: Manufacturer of specific non taxable goods – exemption of tax on
the acquisition of raw materials, components, packaging to be used in
manufacturing activities
• Schedule C: Registered Manufacturer – exemption of tax on the acquisition of
raw materials, components, packaging to be used in manufacturing of taxable
goods (replacing CJ5, CJ5A, CJ5B)

Exemption from Registration:

Sales Tax (Exemption From Registration) Order 2018
• Manufacturing activities exempted from registration regardless of turnover
 E.g. Tailor, Jeweler, Optician, engraving, varnishing table top, etc. 28
 Schedule A
Class of person Goods Exempted
Any Federal or All goods excluding petroleum and
State Government Department imported motor cars

Any international airline Ground equipment,

instructional materials and training aids

(i) Malaysia Airlines Berhad; (i) Ground equipment and instructional materials;
(ii) Maswings Sdn. Bhd.; (ii) training aids;
(iii) Firefly Sdn. Bhd.; (iii) spare parts;
(iv) Air Asia X Sdn Bhd (iv) equipment for aircraft;
(v) MAB Kargo Sdn. Bhd.; (v) store for aircraft
(vi) Aero Darat Sdn. Bhd.

Air Asia Berhad (i) Ground equipment and instructional materials;

(ii) training aids;
(iii) spare parts;
(iv) equipment for aircraft;
29
 SCHEDULE B
 Schedule B: Manufacturer of specific non taxable goods – exemption of tax
on the acquisition of raw materials, components, packaging to be used in
manufacturing activities
 Specific Item :-
• Item 1: Control Item
• Item 2: pharmaceutical (chapter 30)
• Item 3: Milk product
• Item 4: non taxable goods for export

30
 SCHEDULE C
Class of person Goods Exempted
1. Any registered Raw materials, components and
manufacturer other than packaging materials excluding
PREVIOUSLY
petroleum manufacturer petroleum
KNOWN AS
CJ5
2. Any registered Raw materials, components and
petroleum manufacturer packaging materials

3. Any person acting on Raw materials, components and

behalf of registered packaging materials
manufacturer other than
PREVIOUSLY
petroleum manufacturer KNOWN AS
CJ5A
4. Any person acting on Raw materials, components and
behalf of registered packaging materials
petroleum manufacturer
PREVIOUSLY
5. Transfer of semi-finished or finished taxable goods delivered from KNOWN AS
a registered manufacturer to another registered manufacturer who is CJ5B
subsequently brought back to the registered manufacturing 32
company.
 APPLICATION FOR SALES
TAX EXEMPTIONS

Application for exemptions under Schedule A, B and C of

Sales Tax (Person Exempted From Payment of Tax) Order
2018

 made online through MySST System.

33
CERTIFICATE OF EXEMPTION
• Certificates of exemption is generated through MySST system once
the application is approved.

• The generated certificate has a certificate number.

• The exemption from payment of sales tax on such persons and

goods will take effect when;
 the said certificate/ certificate number is produced to the proper
officer of Customs upon the importation; or
 in respect of locally manufactured goods, at the time when the
said certificate/ certificate number is produced to the registered
manufacturer. (certificate number need to be mention in invoice)

34
CERTIFICATE OF EXEMPTION

• Proper officer of Customs may access MySST system

for verification on persons and goods approved based on
the certificate number provided.

• Registered manufacturer who sells taxable goods to

persons claiming exemption is required to verify the
persons and goods approved by accessing MySST
system using the certificate number provided.

35
 CONDITIONS
Any person who has been granted exemption shall be subject to the
following conditions:

• Any goods given exemption shall not be disposed of, sold,

transferred locally or not accounted for, on the conditions that the
payment of the tax has been made;

• Any person given exemption shall keep record or accounts of the

goods imported or purchased and the records or account is made
available for inspection by any proper officer of Customs at any time.

• Registered manufacturer shall declare the total value of goods

purchased without sales tax on the acquisition on raw materials,
components and packing materials in the SST-02 return.
36
 CONDITIONS
• Any person who is granted the exemption is responsible
to comply with the prescribed conditions.

• Any person who fails to comply with any conditions to

which the exemption relates, any sales tax that has been
the subject of the exemption shall become due and
payable by the person on the date on which any of the
conditions failed to be complied with.

37
 SPECIAL RULES
Treatment in Designated Area (DA)

Designated Area Labuan, Langkawi and Tioman

(not deemed outside
Malaysia)
Manufacturing activities Proposed Sales Tax Act does not apply to DA except for
in DA petroleum

Importation into DA Exemption from Sales Tax except:

(world to DA) - Rokok & Minuman Keras
- Langkawi: Importation of marble and anchovies
- Tioman: Importation of motor vehicles
Removal of Goods - From PCA to DA – deemed export, no sales tax
- From DA to PCA – deemed import, subject to sales tax
- To/from DA to DA – no sales tax
- To/from DA to SA* – no sales tax

* Special Area = Free Zone, Licensed Warehouse, Licensed Manufacturing Warehouse

and Joint Development Area (JDA) 38
** Treatment for services will be discussed in Service Tax briefing
 SPECIAL RULES
Treatment in Special Area (SA)

Special Area Free Zone, Licensed Warehouse, Licensed

(not deemed outside Manufacturing Warehouse and Joint Development Area
Malaysia) (JDA)
Manufacturing activities in Proposed Sales Tax Act does not apply to SA
SA
Importation into SA Generally not subject to Sales Tax except for goods in
(world to SA) the free zone which may be subjected to Sales Tax
provided in the Proposed Special Area Order
Removal of Goods - From PCA to SA – deemed export, no sales tax
- From SA to PCA – deemed import, subject to sales
tax
- To/from SA to SA – no sales tax
- To/from SA to DA – no sales tax
** Treatment for services will be discussed in Service Tax briefing
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 ACCOUNTING

Issuance of Invoices
 Mandatory for registered manufacturer who sells taxable
goods.
 Hard copy or electronically
 Containing prescribed particulars
 Bahasa Melayu or English

Credit Notes and Debit Notes

 registered manufacturer is allowed to issue
 shall make an adjustment in his return
 shall contain the prescribed particulars

40
ACCOUNTING BASIS AND TAXABLE PERIOD

Accounting Basis
 Sales Tax
 Accrual basis
 Sales Tax required to be accounted:-
 At the time when the goods are sold, disposed or first used

Taxable Period
 Bimonthly basis (every 2 months)
 Specific basis
Filing Frequency Taxable Period

First Taxable Period - Bimonthly Sept –Oct 2018

Nov-Dec, Jan-Feb, Mar-Apr, May-Jun,

Subsequent Taxable Period
Jul-Aug, Sep-Oct, ……

Specific Basis subject to an approval from the Director General

41
 BAD DEBTS

Bad Debts Claim

 Can be claimed by a registered manufacturer or a person who
ceased to be registered manufacturer.
 Shall claim within 6 years from the date the taxable goods is
sold
 Subject to conditions & satisfaction of the DG
 May claim according to the formula

Bad Debts Recovery

 Has claimed and received the sales tax refund
 Payment received from the debtor after bad debts claimed
 Repay to DG in his return
 Repay according to the formula
42
 RECORDS KEEPING

Records keeping:
 7 years
 Bahasa Melayu or English
 To be kept in Malaysia, except permitted by DG
to kept outside Malaysia
 Can be kept in soft or hard copy

43
 Miscellaneous

Other general provisions provided in the

Proposed Sales Tax Act:

 refund of overpaid tax

 remission
 drawback
 penalty for late payment of tax
 other penalty for offences

44
TRANSITIONAL
ISSUES

45
 Repeal of GST Act 2014

From the effective date (1/9/2018 – implementation of SST)

 LIABILITY incurred on GST tax due, overpaid or erroneously
paid

COLLECTION REMISSION

REFUND ENFORCEMENT

46
FH
 Repeal of GST Act 2014

 No GST on or after effective date (1.9.2018)

 Furnishing of final return, pay GST (if any) within
120 days from effective date
 Failure to submit final GST return is an offence
under the GST Act 2014
 Failure to pay GST (if any) in the final return will
subject to penalty under the GST Act 2014

47
FH
 GST Final
Return

48
FH
 Submission of Final GST return
When to submit GST-03 Final Return
SST Effective 120 days Last date of
date submission

1st Aug 2018 1st Sept 2018 29th Dec 2018

or such date DG
may determine
Taxable Period Normal GST return Final GST return
monthly August August
Three monthly June - August Jun – August
July - September July – August
August - October August
Assigned period Eg. 15th August – 14th September 15th August – 31st August
August - September August

49
FH
 Repeal of GSTA 2014

Final return
 Furnish to the Director General
 Output tax for the last taxable period
• Supply in last taxable period
• Deemed supply – paragraph 8 Schedule 1, GSTA

 Input tax claim for the last taxable period and any
input tax incurred in other taxable periods which has
not been claimed

50
FH
 Repeal of GSTA 2014

Refund
 Input tax claim
 Final return
 Will be considered as final ITC claim

 ITC claim will be subjected to verification &

audit
 Refund will be made within 6 years

51
FH
 Appeal

52
FH
 Repeal of GSTA 2014

GST appealable matters

• Appeal under GST Appeal Tribunal will be handled by
Customs Appeal Tribunal
• Any appeal which is pending will be continued to be
heard by Customs Appeal Tribunal

53
FH
 Repeal of GSTA 2014
GST appealable matters
SST Effective
date 30 days

Scenario 1:

1st Sept 2018

Aggrieved person appeal to
DG’s Decision CUSTOMS APPEAL TRIBUNAL

SST Effective 30 days

date
Scenario 2:

1st Sept 2018 Aggrieved person appeal to

DG’s Decision
CUSTOMS APPEAL TRIBUNAL

54
FH
 Instalment

55
FH
 Repeal of GSTA 2014

Instalment payment (s.51 GSTA)

• Instalment payment should proceed as schedule

• If default in payment on due date, outstanding
balance shall become due and payable on that date
 Subject to surcharge 10% on the balance due
 Shall be recoverable as due and payable

56
FH
 Supply Spanning

57
FH
 Supply spanning - Goods

Before 1/9/2018 On or after 1/9/2018 Implication

Taxable goods sold and Payment received / Invoice Not subject to sales tax
delivered issued
Invoice issued / payment Taxable goods sold and Subject to sales tax
from 1st June 2018 delivered
GST paid before 1st June Taxable goods delivered Not subject to sales tax
2018
Taxable goods sold and Taxable goods sold and Subject to sales tax for
delivered delivered goods sold on or after
1/9/2018

58
FH
 Supply Spanning
GST – Sale Tax

59
FH
Supply spanning example: goods

Scenario 1

1st June 2018 1st Sept. 2018

GST rate 6% GST rate 0% Sale Tax

Transaction GOODS

Payment RM

Tax treatment: Subject to GST 6%

Legend: RM Full payment received

60
FH
Supply spanning example: goods

Scenario 2

1st June 2018 1st Sept. 2018

GST rate 6% GST rate 0% Sale Tax

Transaction GOODS

Payment RM

Tax treatment: Subject to GST 6%

Legend: RM Full payment received

61
FH
Supply spanning example: goods

Scenario 3

1st June 2018 1st Sept. 2018

GST rate 6% GST rate 0% Sale Tax

Transaction GOODS

Payment RM

Tax treatment: Subject to ST

Legend: RM Part payment received

62
FH
Supply spanning example: goods

Scenario 4

1st June 2018 1st Sept. 2018

GST rate 6% GST rate 0% Sale Tax

Transaction GOODS GOODS

Payment RM

Tax treatment: GST 0%

Tax treatment: Subject to ST

Legend: RM Full payment received

63
FH
Supply spanning example: goods

Scenario 5

1st June 2018 1st Sept. 2018

GST rate 6% GST rate 0% Sale Tax

Transaction GOODS

Payment RM

Tax treatment: Subject to GST 6%

Legend: RM Full payment received

64
FH
Supply spanning example: goods

Scenario 6

1st June 2018 1st Sept. 2018

GST rate 6% GST rate 0% Sale Tax

Transaction GOODS GOODS

Payment RM

Tax treatment: Subject to GST 6%

Legend: RM Full payment received

65
FH
Supply spanning example: goods

Scenario 7

1st June 2018 1st Sept. 2018

GST rate 6% GST rate 0% Sale Tax

Transaction GOODS GOODS

Payment RM

Tax treatment:
Subject to GST 6% Tax treatment:
Subject to GST 0%

Legend: RM Full payment received

66
FH
SERVICE TAX
MODEL

67
 SCOPE OF (TAXABLE) PERSONS
A. Hotel H. Credit or charge card
B. Food and beverage I. Others Provider
C. Night Club • Insurance and Takaful
D. Private Club • Telecommunication /Pay-TV
• Customs Agent
E. Golf Club • Parking Operator
F. Betting & Gaming • Motor vehicle service or repair
G. Professional • Courier Service
• Lawyer • Hire Car & Drive Car
• Accountant • Advertising
• Surveyor/ Valuer • Electricity Provider
• Engineer • Domestic Passenger Air
• Architect Transportation
• Consultant
• IT Services
• Management Services
• Employment Agency
68
• Private Agency (Security)
 LIST OF TAXABLE SERVICES
SERVICE PROVIDER
GROUP A : Accommodation
Accommodation: hotel, inns, lodging house, service
apartment, homestay and any other similar
establishment. Exclude provided by :-
1. Federal Government
2. Statutory body or local authority
3. private higher educational institutions
4. employer as a facility to his employees
5. religious or welfare body
GROUP B : Food & Beverage
1. Operator of restaurant, bar, snack bar, canteen,
coffee house or any place which provides food and
drinks:-
1. eat-in or take-away
2. Exclude canteen in an educational
institution or operated by a religious
institution or body
2. Caterer
3. Food court operator
TAXABLE SERVICES
(a) Provision of accommodation premises.
(b) Provision of any other taxable service specified in other Groups in
this Schedule.
(c) Provision of other services within the accommodation premises.
(d) Provision or sale of tobacco products and alcoholic and non-
alcoholic beverages.
(a) Provision of prepared or served food or drink.
(b) Provision of any other taxable service specified in other Groups in
this Schedule.
(c) Provision of other services within the accommodation premises.
(d) Provision or sale of tobacco products and alcoholic and non-
alcoholic beverages.
69
 LIST OF PROPOSED TAXABLE SERVICES
SERVICE PROVIDER
GROUP C : Night Club
Night club, dance hall, cabaret First, second or third
class public house or first or second class beer house
Health or wellness centre Massage parlour or similar
places
GROUP D: Private Club
Any person operating private club
including a club house to which
entry is restricted by membership,
profession or class.
GROUP E : Golf Club & Diving Range
Golf club and driving range
TAXABLE SERVICES
(a) Provision of all services within the establishment.
(b) Provision of any other taxable service specified in
other Groups in this Schedule.
(c) Provision or sale of tobacco products and alcoholic
and non-alcoholic beverages.
(a) Provision of all services within the private club.
(b) Provision of any other taxable service specified in
other Groups in this Schedule.
(c) Provision or sale of tobacco products and alcoholic
and non-alcoholic beverages.
(a) Provision of a golf club or golf driving range or
services related to golf or golf driving range.
(b) Provision of any other taxable service specified in
other Groups in this Schedule
(c) Provision of any other services within the golf club
or golf driving range.
(d) Provision or sale of food, tobacco products and
alcoholic and non-alcoholic beverages.
70
 LIST OF PROPOSED TAXABLE SERVICES
SERVICE PROVIDER
GROUP F : Betting & Gaming
Betting and gaming provider involving bettings,
sweepstakes, lotteries, gaming machines or
games of chance.
GROUP G: Professionals
1. Advocates, solicitors and syarie lawyer
2. Public accountant
3. Surveyors including registered valuers,
appraisers or estate agents
4. Professional engineer
TAXABLE SERVICES
(a) Betting and gaming services involving bettings,
sweepstakes, lotteries, gaming machines or games of
chance.
(b) Conducting tournaments involving bettings,
sweepstakes, lotteries, gaming machines or games of
chance.
(c) Conducting or allowing the conduct of a card game or
any other game by the casino operator.
1. Legal services and other charges in connection to
such services
2. Accounting, auditing, book keeping, consultancy or
other professional services and other charges in
connection to such services
3. Surveying services including valuation, appraisal,
estate agency or professional consultancy services
and other charges in connection to such services
4. Engineering consultancy or other professional
services and other charges in connection to such
services
71
 LIST OF PROPOSED TAXABLE SERVICES
SERVICE PROVIDER
GROUP G: Professionals
5. Architect
6. Consultancy services excluding
research and development
companies
7. Information technology (IT) services
provider
8. Management services excluding
such services provided by:
a. The developer, joint
management body or
management corporation to
the owners of a building held
under a strata title; or
b. asset and fund managers
TAXABLE SERVICES
5. Architectural services including professional consultancy
services and other charges in connection to such services
6. Professional consultancy services and other charges in
connection to such services excluding:
a. Consultancy services relating to medical and surgical
treatment provided by private clinics or specialist clinics;
or
b. Consultancy services in connection with goods or land
outside Malaysia or where the subject matter relates to a
country outside Malaysia
7. All types of IT services excluding:
a. Sale of goods in connection with the provision of IT
services;
b. IT services in connection with goods or land outside
Malaysia or where the subject matter relates to a country
outside Malaysia.
8. Management services and other charges in connection to the
provision of management services including project
management or project coordination
72
 LIST OF PROPOSED TAXABLE SERVICES
SERVICE PROVIDER
GROUP G: Professionals
9. Employment agency
10. Private agency
GROUP H : Credit Card &
Charge Card
Credit card or charge card
services provider regulated by
Bank Negara Malaysia
TAXABLE SERVICES
9. Employment services excluding:
a. Secondment of employees or supplying employees to work for
another person for a period of time; or
b. Employment outside Malaysia
10. Provision of guards or the protection or security of person, property or
business excluding such services to guard or protect the above which is
situated outside Malaysia
Provision of credit card or charge card services through the issuance of a
principal credit card, principal charge card, supplementary credit card or
supplementary charge card, whether or not annual subscription or fee is
imposed excluding fuel card and charge card in a closed community e.g.
education institution or a sports club by its students or members
73
 LIST OF PROPOSED TAXABLE SERVICES
SERVICE PROVIDER
GROUP I : Others
1. Insurer or takaful operator
2. Telecommunication and paid
television service provider
3. Customs agent
4. Parking operator
5. Operator of motor vehicle service or
repair centre or provider of motor
vehicle service or repair
TAXABLE SERVICES
1. General insurance or takaful B2B and general insurance or
takaful B2C excluding medical
Excludes
a. Insuring or takaful coverage of risks relating to the
transport of passengers or goods outside Malaysia
b. Insuring or takaful coverage of risks incurred on granting
credit relating to the export of goods, services or
investments outside Malaysia
c. Insurance contract or takaful certificate to cover risks
outside Malaysia
2. Telecommunication and related services excluding provisions of
services to another Telco provider ;
-Paid television broadcasting services
3. Services of clearing goods from customs control
4. Provision of parking spaces for motor vehicles where parking
charges are imposed
5. Provision of general servicing, engine repairs and tuning,
changing, adjusting and fixing of parts, wheel balancing, wheel
alignment or body repairs including knocking, welding or
repainting of motor vehicles
74
 LIST OF PROPOSED TAXABLE SERVICES
SERVICE PROVIDER
GROUP I : Others
6. Courier service operator
7. Hire-and-drive passenger motor
vehicle and hire-passenger motor
vehicle licensed by Land Public
Transport Commission, Commercial
Vehicles Licensing Board Act 1987
and Tourism Vehicles Licensing Act
1999
8. Advertising
9. Transmission and distribution of
electricity provider
TAXABLE SERVICES
6. Courier delivery services for documents or parcels not
exceeding 30 kilograms each excluding such services for
documents or parcels:
i. from a place outside Malaysia to a place outside
Malaysia;
ii. from a place within Malaysia to a place outside Malaysia;
or
iii. from a place outside Malaysia to a place within Malaysia
and includes the provision of courier delivery services
within Malaysia that forms parts of the service referred to
in subparagraphs (ii) and (iii) where the service is
provided by the same person
7. Provision of hire-and-drive or hire-passenger motor vehicle
services including hire of passenger motor vehicle with or
without chauffeur
8. Provisions of all advertising services excluding provision of
such services for promotion outside Malaysia
9. Provision of electricity to any domestic consumer excluding for
the first 600 kWh for a minimum period of twenty-eight days per
billing cycle consumed by that consumer
75
 LIST OF PROPOSED TAXABLE SERVICES

SERVICE PROVIDER TAXABLE SERVICES

GROUP I : Others 10. Domestic passenger air transport service and all services in
10. Airline operator licensed under connection with such services excluding the air transport route
section 35 of Malaysian Aviation as specified under the Rural Air Services Agreement
Commission Act 2015 [Act 771] or
air service permit under section 36
of Malaysian Aviation Commission
Act 2015

76
 SPECIAL RULES
Treatment in Designated Area (DA)

Designated Area Labuan, Langkawi and Tioman

(not deemed outside
Malaysia)
Services provided
between and within DA
Provisions of services
Not subject to Service Tax except :
- Telecommunication services
- Passenger Air Transport
- Accommodation Services
- Food & Beverages
- From PCA to DA – subject to service tax
- From DA to PCA – subject to service tax
- To/from DA to SA* – no service tax

* Special Area (SA) = Free Zone, Licensed Warehouse, Licensed Manufacturing

Warehouse and Joint Development Area (JDA) 77
 SPECIAL RULES
Treatment in Special Area (SA)

Special Area Free Zone, Licensed Warehouse, Licensed

(not deemed outside Manufacturing Warehouse and Joint Development Area
Malaysia) (JDA)
Services provided between Not subject to Service Tax except :
and within SA - Telecommunication services
- Passenger Air Transport
- Accommodation Services
- Food & Beverages
- Customs Agent
Provisions of services - From PCA to SA – subject to service tax
- 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
* Special Area (SA) = Free Zone, Licensed Warehouse, Licensed Manufacturing
Warehouse and Joint Development Area (JDA) 78
 SPECIAL RULES
Treatment in DA & SA
TAXABLE SERVICES TAXABLE PERSON
Provision of passenger air transport Any person who is granted an air service licence under section 35 of
Services provided between and within the Malaysian Aviation Commission Act 2015 [Act 771] or air service
designated areas (DA) & special areas permit under section 36 of the Malaysian Aviation Commission Act
(SA) :- 2015.
i) Between DA
ii) Between SA
iii) DA to SA
iv) SA to DA
Provision of Telecommunication Any person providing telecommunication services and any content
Services provided between and within applications service provider who is registered under the
designated areas (DA) & special areas Communications and Multimedia Act 1998 [Act 588] or licensed
(SA) :- under the Communications and Multimedia (Licensing) Regulations
i) Between DA 2000 [P.U. (A) 129/2000].
ii) Between SA
iii) DA to SA
iv) SA to DA

79
 SPECIAL RULES
Treatment in DA & SA
TAXABLE SERVICES TAXABLE PERSON
Provision of accommodation Any person operating accommodation premises including hotel,
Premises in special areas (SA). inns, lodging house, service apartment, homestay and any other
similar establishment, excluding accommodation premises—
a) provided by—
i. Federal Government;
ii. any statutory body or local authority; or
iii. any private higher educational institutions
b) provided by an employer as a facility to his employees;
c) provided by any religious or welfare body
Provision of foods and beverages in 1. Any person operating restaurant, bar, snackbar, canteen, coffee
special areas (SA). house or any place which provides food and drinks, whether
eat-in or take away excluding—
a. canteen located in an educational institution; and
b. canteen operated by a religious institution or body.
2. Any person providing catering services.
3. Any person operating a food court

80
 SPECIAL RULES
Treatment in SA
TAXABLE SERVICE TAXABLE PERSON
Provision of services for clearing Any person who is given permission to act as an agent
goods from customs control in under section 90 of the Customs Act 1967 [Act 235].
special areas (SA).

81
 MYSST PORTAL
1

• https://mysst.customs.gov.my/ 82
Thank You

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