Malaysia GST

Malaysia Hotline: +603- 2141 8908

Malaysia GST is Malaysia Goods and Services Tax (GST), it was implemented since 1 April 2015. It has the purpose of replacing the sales and services tax which has been levied for several years in the country. The 6% GST now replaces the sales-and-service tax which was between 5-10%.

Malaysia GST (Goods and Services Tax) is charged on the taxable supply of goods and services produced in the course of business in Malaysia by a taxable person. In addition, GST is also levied on the importation of goods and services. It is important to note that GST can be charged only if the business is registered under Malaysia Goods and Services Tax (GST).

Malaysia GST (Goods and Services Tax) is considered to be a multi-stage consumption tax on goods and services. This means that GST is charged on the supply of goods and services at each stage of supply chain from the supplier up to the retail stage of the distribution. Although GST is imposed at each level of supply chain, it does not turn into the part of the product’s cost since GST paid on the business inputs is claimable.

The supply of good is divided into the following:

1.       Standard-rated supplies

Standard-rated supplies are taxable supplies of goods and services which are subject to a proposed rate of 6%. A taxable person who is registered under GST has to collect GST on the supply and is eligible to claim input tax credit on his business inputs in making taxable supplies.

2.       Zero-rated supplies

Zero-rated supplies are taxable supplies of goods and services which are subject to GST at zero percent rate. In this respect, businesses do not collect any GST on their supplies but are entitled to claim credit on inputs used in the course of furtherance of the business.

Out-of-Scope supplies are supplies which do not fall within the charging provision of the GST Act include non-business transactions, sale of goods from a place outside Malaysia to another place outside Malaysia as well as services provided by the Government sector.

3.       Exempt supplies

Exempt supplies are supplies of goods or services which are not subject to GST. In this context, businesses do not collect any GST on their supplies and are not entitled to claim credit on his business inputs.

Businesses act as intermediaries by collecting and paying the GST to the government. If the output tax collected exceeds input tax claimed, then businesses have to pay the difference. If the input tax claimed exceeds output tax collected, then businesses can choose to refund or bring forward the GST refund.

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