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Malaysian Institute of Accountants www.mia.org.

my
welcome to
Concurrent
Session 1D
Goods & Services Tax
GST! Su""ly #
Time$ %lace and &alue
Aaron 'romley
'(u"inder Sing(
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Customs & Indirect Tax
Bhupinder Singh
Executive Director, Ernst & Young
Aaron Bromley
Senior Manager, Ernst & Young
GST & SUPPLIES:
TIME, PLACE & VALUE
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GST
OV!VI"
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Scope of Tax
GST is imposed on$
supply o% goods and ser&ices in 'alaysia
importation o% goods into 'alaysia ( GST is charged on importation
importation o% ser&ices into 'alaysia ( GST is charged )y using
*re&erse charge+ mechanism ,e-g- consultancy. technical ser&ices. etc-/
GST
Import o% Goods
0hysical mo&ement o%
Goods into 'alaysia
Import o% Ser&ices
!e&erse charge
mechanism
Supply o% Goods 1
Ser&ices in 'alaysia
2Belonging Concept 1 "here
Supplier is 3ocated4
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Scope of Tax
Supply$
all %orms o% tangi)le goods or intangi)le ser&ices-
xamples include the sale or disposition. )arter. exchange.
license. rental. lease. right to use. entry into o)ligations-
E.g. Manufacture and sale of goods - - treated as a supply
Delivery of services - - another supply
anything 6hich is not a supply o% goods 6ill )e treated as a
supply o% ser&ice-
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Types of Supplies
All supplies fall within 4 categories:
Stanar rate !axa"le Supplies
#ero rate !axa"le Supplies
Exempt $o %S! &input tax not
recovera"le'
(ut)of)Scope $o %S!
*nput tax
recovera"le
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Types of Supplies
Examples of suppl+ uner each categor+:
Stanar rate ,ocal suppl+ of goos - services
#ero rate Export sales - international services
Exempt .ertain financial services, healthcare services,
eucation services, omestic transportation
of passengers for mass pu"lic transport, sales -
lease - rental of resiential lan - propert+
(ut)of)Scope !ransfer of "usiness as going concern, sales
of propert+ outsie Mala+sia, thir countr+ sales
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TI' O: S;003<
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Time of Supply / Tax Poin
As a general rule, %S! has to "e accounte for at the earliest of the following:
/0 1asic tax point
:or goods$

at the time of removal, or

at the time the goos are mae availa"le to the customer0



:or ser&ices$

performance of the service0


20 !ax invoice is issue
30 4hen pa+ment &all or part' is receive
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Excepion: !"#$ay %ule
I% the GST in&oice is issued 6ithin ># days o% the )asic tax point and no payment
has )een recei&ed. then the time o% supply is the date o% the GST in&oice. unless
the taxa)le person elects not to use this >#@day rule-
20 Jun 2007 25 Aug 2667
Goods
Aeli&ered
Bormal !ule
26 8un 2667 1 Jul 2004
Goods
Aeli&ered
Tax In&oice
Issued
"hen do you pay GSTC
>#@Aay !ule
0ayment
'ade
"hen do you pay GSTC
>>
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03AC O: S;003<
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Place of Supply
0lace o% supply is important as GST is charges on supply o% goods 1
ser&ices made in the country ,i-e- 'alaysia/
0lace o% supply %or$

Goods A suppl+ of goos is treate as mae in Mala+sia if the suppl+


originates from a place in Mala+sia0 !he place of suppl+ is where the goos are
remove or mae availa"le to the customers0

Ser&ices A suppl+ of services is treate as mae in Mala+sia if the


supplier has a "usiness esta"lishment or fixe esta"lishment in Mala+sia
otherwise if his usual place of resience is in Mala+sia0
Goods manufactured and sold in Malaysia - - Standard Rated
Goods manufactured in Malaysia and exported - - Zero Rated
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GST Considerations$
Drop Shipment
.o+ A
&Mala+sia'
.o+ A
&Mala+sia'
.ustomer
&Mala+sia'
.ustomer
&Mala+sia'
.o+ 1
&8apan'
.o+ 1
&8apan'
Delivery of
Goods
Inoice ! "S#10$000
Inoice ! "S#%$000
Shoul .o+ A Shoul .o+ A
&Mala+sia' impose &Mala+sia' impose
%S! on this invoice9 %S! on this invoice9
*s .o+ 1 &8apan' re:uire to "e *s .o+ 1 &8apan' re:uire to "e
registere for %S! in Mala+sia9 registere for %S! in Mala+sia9
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GST Considerations$
EPC Contracts Supply and Installation of Goods
.o+ A
&8apan'
.o+ A
&8apan'
.ustomer
&Mala+sia'
.ustomer
&Mala+sia'
.o+ 1
&Mala+sia'
.o+ 1
&Mala+sia'
#eliery of Goods
and Supply of
Installation
Serices
&roide Installation or
'onstruction Serices
Su(-'ontract for Installation
or 'onstruction Serices
4hat are the %S! issues9 4hat are the %S! issues9
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GST Considerations$
!D Design Services
.o+ A
&Mala+sia'
.o+ A
&Mala+sia'
.ustomer
&Mala+sia'
.ustomer
&Mala+sia'
.o+ 1
&8apan'
.o+ 1
&8apan'
&erform R)#
Serices for
Goods *ocated
in Malaysia
Inoice ! "S#+0$000
Shoul .o+ A impose %S! on the Shoul .o+ A impose %S! on the
;&D esign services performe in ;&D esign services performe in
Mala+sia "ut "ill to .o+ 1 &8apan'9 Mala+sia "ut "ill to .o+ 1 &8apan'9
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GST Considerations$
"arranty Issues Provide epair Services
.o+ A
&Mala+sia'
.o+ A
&Mala+sia'
.ustomer
&Mala+sia'
.ustomer
&Mala+sia'
.o+ 1
&8apan'
.o+ 1
&8apan'
Re,uires 'oy - to proide repair
serices to defects in Malaysia
.ac/-to-.ac/
0arranty
.ac/-to-.ac/
0arranty
Inoice ! "S#200$000
&rice of 1oods sold 2inclusie of 3arranty4
'5ar1e GS6 to 'oy . in Japan 7 not recoera(le
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VA3; O: S;003<
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GST is charged on the &alue o% supply o% goods and
ser&ices 6hene&er time o% supply conditions are met-
Value o% supply can )e %or a consideration in either$

money ,GST exclusi&e &alue D GST/< or

open marEet &alue ,inclusi&e o% GST/0


Value of Supply
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Example: Suppl+ of %oos
2x 4igets = ;M/66066 each ;M266066
Deliver+ of 4igets ;M 26066
%S! >Exclusive ?alue ;M226066
%S! = 5@ ;M //066
?A,AE (B SACC,Y ;M233066
Taxa&le Supply # Value
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Example: DBoo .o0E agrees to provie DStaium .o0E with free prouct
provie it can place avertising "oars at the Staium uring
matches0
Suppl+ of Crouct &;M/656 %S!)incl MarFet ?alue'
Boo .o0: D;/666 &Ac:uisitions'
D; 56 &*nput !ax'
.;/666 &;evenue'
.; 56 &(utput !ax'
Taxa&le Supply ' Value ()on#Monea*y Consi+e*aion,
Boo .o0
Staium .o0
Suppl+ of Avertising &;M/656 %S!)incl MarFet ?alue'
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Impo*aions # Value
*mport of motor vehicle:
.*B ?alue ;M/66,666
*mport Dut+ =G6@ ;M G6,666
;M/G6,666
Excise Dut+ =H6@ ;M/6G,666
;M2GG,666
%S! =5@ ;M /4,466
!(!A, !'3?2.#??
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-%e.e*se C/a*0e1 on Impo*e+ Se*.ices # Value
(verseas *nvoice: AASI/6,666
Mala+sian ;M = 20G ;M2G,666
%S! = 5@ ;M /,466
D; %S! *nput .ost /,466
.; %S! (utput .ost /,466
$et %S! Cosition &wholl+ taxa"le entit+' 6
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T/an2 you3
I% you ha&e any Fuestions. please contact $
Bhupinder Singh
Tel $ ,7/?3 2?98 ##?5
:ax $ ,7/?3 2?=5 8?#3
@mail$ )hupinder-singhGmy-ey-com