SEMINAR GST UNTUK PERSATUAN VETERINAR MALAYSIA (VAM) ACCOUNTING FOR GST

Transcription

1 SEMINAR GST UNTUK PERSATUAN VETERINAR MALAYSIA (VAM) ACCOUNTING FOR GST Presenter :SABARIAH BINTI MD YUSOF Venue : Holiday Villa Subang Date : 20 November

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3 Responsibilities and Obligations As a registered person, what are my responsibilities? Must comply with the requirements under the GST legislation as follows: i. issue tax invoice ii. account for GST on taxable supplies made and received iii.submit GST return (GST-03) and pay tax not later than the last day of the following month after the taxable period; 3

4 Responsibilities and Obligations iv. inform Customs of the cessation of business within thirty days from the date of business cessation; v. inform Customs on any changes of address, taxable activity, accounting basis and taxable period; and vi. keep adequate records of business transactions relating to GST in the National or English language for seven years. 4

5 Briefing Agenda 1. Charging Output Tax 2. Entitlement of Input Tax 3. Apportionment Rules 4. GST Adjustments 5. Taxable period 6. Submission of GST Return 7. Payment of Tax 8. Record Keeping 5

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7 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 7

8 Input tax and Output tax INPUT Things you buy / services received Medical Equipment Utilities expenses (telco, water, electricity) Rental Office equipment, furniture and stationaries Vaccine, medicines Animal food Business OUTPUT Thing you sell/services you provide surgery Vaccination Animal hotel Selling medicines GST on inputs = Input tax Claimed input tax GST on outputs = Output tax 8

9 Price (GST Exclusive) Total GST payable is stated in the tax invoice and is shown separately. example: Display price RM1,000 (GST exclusive). GST = Price x GST rate = RM1,000 x 6% = RM60 Output tax Consumer pays RM1,000 + RM60 (GST) = RM1,060 and RM60 supplier has to pay to Customs (output tax). If the consumer is registered person, he can claim RM60.00 as his input tax. 9

10 In retailing sector, price displayed is normally inclusive of GST. The tax invoice should state the price inclusive of GST. example : the price of a bag of fertilizer RM (GST inclusive). GST = price x tax fraction = RM x 6/106 = RM8.50 the buyer has pay RM and the supplier has to pay GST RM8.50 to Customs. Output Tax 10

11 Tax Fraction Tax fraction is the amount of GST payable towards consideration received. Tax fraction = GST rate GST rate = Example: Price of Goods RM (GST Inclusive) GST Amount : RM x 6/106 GST = RM10.20 Output Tax Price of Goods = RM RM

12 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

13 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 13

14 Imported Services Malaysia IT Tex_.UK ABC Sdn.Bhd (Taxable person) Value of Services = RM10, GST = 6% X RM10,000 = RM600 GST-03 OUTPUT TAX = RM600 Port overseas INPUT TAX = RM600 14

15 Output Tax Supplies which may not be subject to GST cash donation or grants where a person does not get benefits compensation or liquidated damages disbursements, dividends, loan repayments or capital injection transfer of going concern (TOGC) contribution to pension, provident or social security fund supplies by any society or similar organisation supplies excluded from input tax credit 15

16 Output Tax 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 16

17 Tax Invoice Types of tax invoice when making taxable supplies full tax invoice S33(1) simplified tax invoice S33(3) self-billed invoice S33(5) 17

18 TAX INVOICE Supplier s name, address and GST identification number Customer s name & address AUTO PARTS AND SERVICESE SDN.BHD. Lot 123, Jalan Pengkalan, Lahat, Perak (GST ID No : /2015) Tel : To : Syarikat Car Care Sdn. Bhd. No. 27, Jalan Maju Jaya, Ipoh, Perak Serial TAX INVOICE No. Description Quantity Unit Price (RM) Invoice No: Date : 25 Jun 2015 D/O No : S Total (RM) Tax Invoice serial number Date of Tax Invoice The words Tax Invoice clearly indicated Car Accessories SS1201 Auto Parts SS1210 Lubricant SP , , , Total amount payable, excluding GST Description of goods supplied 10% Total before GST 4, (485.00) 4, Total amount of GST charged Add 6% Total Sales 4, Total amount payable, inclusive of GST Quantity of goods supplied Rate of GST AUTO PARTS AND SERVICES SDN.BHD. 1 8

19 Example of Full Tax Invoice (Standard Rated Supply) HACHIKO ANIMAL CLINIC NO.5, JALAN PINGGIRAN PUTRA, KAJANG TAX INVOICE To: Alisha binti Ahmed Invois No : A No. 2, Jalan P11/2, GST No. : Putrajaya Invoice Date: 01/04/2015 NO. DESCRIPTION UNIT PRICE (RM) TOTAL (RM) Patient name : Bobby Reference : Dr. Danish Imran 1 Medication Pain relief injection Dentistry Vaccination GST (6 %) 8.76 TOTAL AMOUNT PAYABLE INCLUSIVE OF GST

20 FULL TAX INVOICE (GOODS & SERVICES) Supplier s name, address and GST identification number MOTOR MART SERVIS SDN. BHD. Lot 123, Jalan Meru, Klang, Selangor Tel : (GST Reg No : /2012) Tax Invoice No : Date : 25 Januari 2016 Tax Invoice serial number Customer s name & address Description of goods Syarikat Al Amin Sdn. Bhd. No. 27, Jalan Kapar, Klang, Selangor (GST Reg No : /2012) TAX INVOICE The words Tax Invoice clearly indicated Date of Tax Invoice Serial No. Description Total (RM) Description services supplied 1 unit Premium battery 4 unit Premium tyres (RM175 per unit) Repairs and body works on car No. WC111 Auto spray/paint on car No. WC111 Total (excluding GST) GST 6% Total Amount Payable Rate of GST Total amount of GST charged ,000 3,000 5, , Total Charge made, excluding GST Total charge made, including GST... MOTOR MART SDN. BHD. 8

21 TAX INVOICE Simplified Tax Invoice Director General may allow a registered person to issue simplified tax invoice Registered person is required to apply in writing to the Director General if certain prescribed particulars are to be omitted in the tax invoice issued by him For example, a registered person applies to the DG to allow him to exclude in his tax invoice, the following prescribed particulars: the words tax invoice ; the name and address of the recipient; and the price and tax for each item to be shown separately This simplified invoice may be allowed to be issued provided it contains particulars as approved by DG. Example of such simplified invoice with the approved particulars is as follows: 2 1

22 Supplier s name, address and GST identification number TAX INVOICE ELLA VET SHOP GF1-03, Kompleks Sinisana,Jalan Kenangan, Klang, Selangor. (GST ID No : /2015) Tel : TAX INVOICE Tax invoice serial number Inv No: A00295 Date : Date of Tax Invoice Description of goods or services supplied Description Qty Total (RM) Feed supplement -antioxidants 1 box set vaccine equipment I set Total amount TOTAL payable including * GST * Price payable includes GST 6% Rate of GST Total amount of GST charged 22

23 TAX INVOICE Simplified Tax Invoice and Input Tax Claim Simplified tax invoice can be used to claim any amount of input tax credit provided it contains the name and address of the recipient Simplified tax invoice which does not have the name and address of the recipient : the maximum of input tax to be claimed must not exceed RM If the amount of GST payable is more than RM 30.00, the recipient can only claim input tax RM Recipient must request to include his name and address in the simplified tax invoice to enable him to claim the full amount of input tax if GST payable is more than RM

24 Application For Simplified Tax Invoice

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33 ENTITLEMENT OF INPUT TAX

34 Section 2 Meaning of Input Tax Input tax means --- (a) any tax on any taxable supply of goods or services to a taxable person; or (b) any tax paid or to be paid by a taxable person on any importation of goods, and the goods or services are used or are to be used for the purposes of any business carried on or to be carried on by the taxable person:

35 How the GST works? GST is accounted and paid by taxable persons. The taxable person pays GST or input tax on his business purchases. He then adds value to those goods and services. When the goods are sold or services are provided, GST or output tax is collected based on the selling price. Lots of paper work eh!!!!!!

36 Entitlement To Claim Input Tax Entitled to claim input tax if he is making a taxable supply and satisfies the following: input tax has been incurred; input tax is allowable; he is a taxable person; goods or services acquired and for business; made in Malaysia 36

37 Input Tax Mechanism Input Tax Credit 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 37

38 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 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 38

39 Blocked input tax passenger motor cars including hiring of car goods or services relating to repair, maintenance and refurbishment of a passenger car family benefits Non Allowable Input Tax club subscription fee medical and personal accident insurance medical expenses entertainment expenses for family members and potential clients 39

40 Non Allowable Input Tax Blocked input tax passenger motor cars including hiring of car goods or services relating to repair, maintenance and refurbishment of a passenger car 40

41 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 41

42 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 Blocked Input Tax 42

43 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 43

44 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 44

45 Criteria To Claim Input Tax Must hold valid document: tax invoice tax invoice issued by approved person for Flat Rate Scheme Customs No 1 for imported goods Customs No 9 for goods removed from bonded warehouse document to show claimant pays imported services 45

46 Criteria To Claim Input Tax For the purpose of claiming ITC : simplified tax invoice can be used to claim input tax. But for an approved tax invoice without the name and address of the recipient, the allowed input tax amount claimable is RM30 or less. Therefore, request for a tax invoice with name and address of the recipient to enable him to claim the full input tax if it is more than RM30. 46

47 Criteria To Claim Input Tax tax invoice in the name of the taxable person not in the name of the third party such as employees or directors tax invoice is lost get certified copy no matching of input to output can claim input tax if holds valid document 47

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49 Apportionment Rules Apportionment rules (first level) Apportionment between business and non-business Apportionment rules (second level): Applicable when goods and services are used for both taxable and exempt supplies (mixed supplier) 49

50 Apportionment Rules No apportionment if can attribute wholly full input tax if wholly attributable to taxable supplies no input tax if wholly attributable to exempt supplies Apportionment rules applicable when goods and services are used for both taxable and non-taxable supplies 50

51 Apportionment Rules Inputs used Wholly attributable to taxable supplies Wholly attributable to exempt supplies Claim 100% input tax Attributable to both taxable and exempt supplies Cannot claim input tax Apportionment rules apply 51

52 Apportionment Rules DIRECT ATTRIBUTE INPUT A Claimable PROCESS Taxable OUTPUT A INPUT B Not Claimable PROCESS Exempt OUTPUT B INDIRECT ATTRIBUTE - Apportionment INPUT A Apportion PROCESS OUTPUT A OUTPUT B 52

53 Apportionment Rules Mechanism for input tax apportionment Turnover-based method as a standard method for apportioning any residual input Taxable portion = Value of taxable supplies Value of all supplies round up or down to the nearest two decimal places Input tax claimable = Taxable portion X Residual input tax 53

54 Apportionment Rules Example: Taxable supplies = RM300,000 Exempt supplies = RM250,000 Residual input tax = RM8,000 RM300,000 Taxable portion = RM300,000 + RM250,000 = % = 54.55% (2 decimal places) Input tax claimable = 54.55% X RM8,000 = RM4,364 54

55 Apportionment Rules De Minimis Limit Exempt input tax can be recovered in full if the total value of exempt supply is less than a prescribed amount Prescribed amount total value of the exempt supplies does not exceed Example: an average of RM5,000 per month and not exceeding 5% of the total value of total supplies (all taxable and exempt supplies) made in that period Factory provides transport (workers bus) to his workers for a charge 55

56 De Minimis Limit Example 1 : A manufacturing company provides bus transportation to its workers and charges them. Activity Taxable Exempt % Value (RM) 150,000 4, Full recovery of input tax allowed 56

57 De Minimis Limit Example 2 : A manufacturing company provides bus transportation to its workers and charges them. Activity Taxable Exempt % Value (RM) 500,000 10, Full recovery of input tax are not allowed, have to apply apportionment rule on ITC Residual Input Tax Taxable Supplies Exempted Supplies ITC Claimable Total Input Tax RM500 RM500,000 RM10,000 98% RM

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59 Adjustments Adjustments to input tax and output tax when the taxable person issues debit notes or credit notes In relation to bed debt, payment not received after 6 months debtor has become insolvent before expiry of 6 months payment not made for supply after six months 59

60 Adjustments Credit note & Debit note Adjustments due to credit note issued credit note is issued when the amount previously invoiced is reduced or a transaction is cancelled Supplier, already accounted for output tax, reduces output tax in the return for the taxable period in which the credit note was issued buyer, already claimed input tax, reduces input tax in the return for the taxable period in which he received the credit note Adjustments due to debit note issued debit note is issued when the amount previously invoiced is increased supplier has to increase output tax in the return for the taxable period in which the debit note was issued buyer has to increase input tax in the return for the taxable period in which he received the debit note 60

61 Credit note & Debit note adjustment Adjustment Supplier Recipient In relation to Adjustment method When: In GST Return for Adjustment method When: In GST Return for Credit note Reduce output tax The taxable period where CN is issued Reduce input tax Taxable period where CN is issued Debit note Increase output tax The taxable period where DN is issued Increase input tax Taxable period where DN is issued 61

62 BAD DEBT

63 Bad Debt Concept: Supply Tax paid Claimed relief Payment received 6 months elapsed GST has to be accounted to JKDM 6 years period for claiming bad debt relief 63

64 Bad Debt Relief Bad Debt Relief entitle to relief on bad debts if the taxable person has not received any payment or part of payment in respect of the taxable supplies Conditions to apply relief GST has been paid has not received any payment or part payment 6 months from the date of supply or the debtor has become insolvent before the period of 6 months has elapsed sufficient efforts have been made to recover the debt Shall make adjustment in the GST return for bad debt relief claim 64

65 Bad Debt Relief Adjustments due to bad debts supplier is entitled to bad debts relief supplier claims as input tax in the return for the taxable period in which the bad debts are given relief input tax amount to be claimed is computed as follows: A1 input tax = x C B where A1 is the payment not received in respect of the taxable supply B is the consideration for the taxable supply C is the tax due and payable on the taxable supply buyer account as output tax in the return for the taxable period in which the bad debts are given relief 65

66 Bad Debt Relief Example: Invoice 10 July 2015 RM53,000 (inclusive GST RM3,000) GST 03 : RM3,000 (output) 5 September 2015 Payment RM42,400 Balance of RM10,600 unpaid after 6 months from date of invoice input tax claimable = Supplier transaction RM10,600 RM53,000 = RM600 x RM3,000 66

67 Bad Debt Relief If buyer who is a taxable person fails to pay his supplier the consideration (wholly / part) on the supply after the period of six months :- Need to account for GST on the outstanding amount owed to the supplier, if already claimed the input tax Deemed to be his output tax (RM600 in the previous example) Account the output tax in the taxable period after the period of six months in his GST Return If he had ceased to be a registered person and had claim the input tax, account the tax in GST-03 form 67

68 Bad Debt Recovery Adjustments due to payment received in respect of bad debts customer makes payment in respect of bad debts (relief has been claimed by supplier) supplier accounts as his deemed output tax in the return for the taxable period in which the payment is made output tax amount to account A2 output tax = x C B where A2 is the payment received in respect of the taxable supply B is the consideration for the taxable supply C is the tax due and payable on the taxable supply customer account as input tax in the return for the taxable period in which the payment is made 68

69 Bad Debt Recovery SUPPLIER Based on the earlier example: On 5 March 2016, the customer pays RM8,000. The balance of RM2,600 is still unpaid. RM8,000 output tax to be accounted = RM53,000 = RM x RM3,000 69

70 Bad Debt Recovery Customer Allowed to claim the RM452.83:- If he is a Registered person claim as input tax in GST Return (GST-03) If he ceased to be a registered person claimed input tax by amending GST-03 70

71 Adjustments Bad debts Adjustment Supplier Recipient In relation to Adjustment method When: In GST Return for Adjustment method When: In GST Return for Bad debt relief (Payment NOT received) Increase input tax The taxable period when bad debt relief is claimed Increase output tax The taxable period where the 6 th months from time of supply occurred Recovery of bad debt (Payment received) Increase output tax The taxable period when payment is received Increase input tax The taxable period when payment is made 71

72 TAXABLE PERIOD

73 Taxable Period Regular interval period where a taxable person accounts and pays GST to the government To determine at the time when the GST registration is approved quarterly basis for businesses with taxable turnover not exceeding RM5 million in the period of 12 months monthly basis for businesses with taxable turnover exceeding RM5 million in the period of 12 months 73

74 Filing of GST Returns When to submit GST Return monthly taxable period quarterly taxable period 74

75 GST RETURNS AND PAYMENT OF TAX

76 GST Returns and Payment GST returns and payments must be submitted not later than the last day of the month following the end of the taxable period Electronic filing is encouraged 76

77 GST FORM NO.3 (PAYMENT FORM)

78 GST FORM NO.3 (PAYMENT FORM)

79 Submission of GST Returns GST Return must be submitted for any condition as follows: Payment Refund No payment : output tax > input tax : output tax < input tax : 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 79

80 Filing of GST Returns Example (payment) : Calculation of output tax Value of taxable supplies made Output tax Calculation of input tax Value of taxable supplies received Input tax Net tax payable/refundable GST payable (2 4) GST refundable (4 2) RM1,000,000 1 RM 40,000 2 RM 600,000 3 RM 24,000 4 RM 16,

81 Filing of GST Returns Example (refund): Calculation of output tax Value of taxable supplies made Output tax Calculation of input tax Value of taxable supplies received Input tax RM1,000,000 1 RM 40,000 2 RM1, 600,000 3 RM 64,000 4 Net tax payable/refundable GST payable (2 4) GST refundable (4 2) RM 24,

82 GST Refund 14 working days for electronic submission 28 working days for manual submission Late registration : pay net tax if output tax exceeds input tax refund if input tax exceeds output tax 82

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84 Payment of tax must be made not later than the last day on which he is required to furnish the return Payment of tax may be made: 1. at JKDM office, in person cheque, bank draft, postal order, money order 2. over the counter at dedicated bank cheque, bank draft 3. by post cheque, bank draft, postal order 4. by electronic means Internet banking, FPX (financial processing exchange) 84

85 Submission of Tax Return 85

86 1. Click the [Register For GST] hyperlink Register for GST

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88 Record Keeping Bahasa Malaysia or English 7 years can be kept in soft or hard copy to be kept in principal place of business 88

89 Record Keeping Failure to Keep Records Any person who contravenes Section 36 GST Act 2014, commits as offence and shall, on conviction, be liable to a fine: not exceeding fifty thousand ringgit; or to imprisonment for a term not exceeding three years; or to both 89

90 Record Keeping Records relating to registration SSM records Form A, B, C, 8,9 and etc. Records relating business activities tax invoices, invoices, receipts, debit note, credit note delivery order, purchase order Bank slip, bank statement, voucher and etc. Contract, agreement Records relating to accounting (hard copy) Financial statement Profit & Loss, Balance Sheet, Trial Balance Account payable, account receivable, General ledger, Sales, Purchase, stock, cash and etc. 90

91 Record Keeping Records relating to taxation Customs forms K1, K2, K9 and etc GST GST returns, registration and etc GST adjustment sheet Income tax declaration Records relating to electronic form Accounting software manual Accounts chart, access code, program documentation Audit trail Purchase, Sales, GL Listing (e.g standard, exempt, disregard, out of scope, deemed supply etc) GAF File (GST Accounting Software) Management Information Report (MIS) report Other data / records keep in accounting / business software 91

92 Thank you

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94 Livestock Zero rate Products (0%) Live bovine animals -cattle, sheep, goats, swine, poultry Meat of bovine animals, birds eggs (fresh, salted, Standard rate products (6%) Supplies of livestock products that are not listed in the above such as deer meat, turkey, quail, goose. Pet animals cat, dog, and hamster All birds All process meat example: burger, nugget 94

95 Fisheries Industry Zero Rate (0%) products Supply of fish whether marine or aquaculture which is used as foods for human consumption Fish fry Crustaceans-lobster, crabs, oysters, scallops, mussels Produk berkadar standard (6%) Fish ornamental Fish for aquaria Fish pond Fish use as a bait Fish balls, fish cake, fish fillets, canned sardines, 95

96 SERVICES Veterinary Services: 1.Veterinary hospitals 2.Clinics 3.Veterinary pharmacy 4.Animal hotels 5.Other related services -testing -supply of diagnostic test kits - supply of vaccination equipment services - supply feed additives Standard rated supply Subject to GST 6% Input tax claimable 96

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98 Flat Rate Scheme Purpose A facility to reduce cost of production i.e. GST incurred by small scale farmers Scheme Approved person (those below threshold and not registered under GST) to charge a flat rate addition to his registered buyers but does not have to remit the amount to the authority (RMC) The registered buyer is allowed to claim input tax based on the flat rate addition charged by the approved person Prescribed Activities growing of crops, market gardening or horticulture, livestock farming, or fishing including aquaculture 98

99 Flat Rate Scheme (FRS) Concept PURCHASE FROM Registered person GST i.e. animal food APPROVED PERSON FRS (non-registered person) SALE TO Registered person GST RM 10, => GST 6% = RM RM30, =>charged flat rate addition 2% = RM (to his registered buyer - keep the FRA) =>Buyer can claim RM from Govt as his input tax credit

100 Flat Rate Scheme Rate of flat rate addition: The rate is determined by the Minister, i.e. 2% as stipulated in GST Regulations The rate is charged only on the value of taxable goods supplied relating to prescribed activities Also allowed to be imposed on zero-rated supplies. For example, on sale of vegetables by the approved person

101 Flat Rate Scheme A person is eligible to apply for this scheme subject to the following conditions: He is not a registered person He is a member of an association or body which is regulated by the relevant authority as prescribed in GST Regulations He is carrying on a business relating to the prescribed activities At least 80% of his total supply of goods in a year involves one or more prescribed activities He has not in three years preceding the date of his application for approval Been convicted of any of any offence under the Act; Accepted any offer of compound; or Had his approval revoked under this scheme.

102 Flat Rate Scheme Relevant Authorities under FRS: 1. Department of Agriculture 2. Department of Fisheries 3. Department of Veterinary Services 4. Fisheries Development Authority of Malaysia 5. Malaysia Palm Oil Board 6. Malaysia Rubber Board 7. Malaysia Cocoa Board 8. Malaysia Pepper Board 9. National Kenaf and Tobacco Board 10. Farmers Organisation Authority 11. Kemubu Agricultural Development Authority

103 Flat Rate Scheme Cont Relevant Authorities under FRS: 12. Muda Agricultural Development Authority 13. Malaysia Pineapple Industry Board 14. Department of Agriculture Sarawak 15. Sabah Rubber Industry Board 16. Ministry of Agriculture and Food Industry State of Sabah

104 Flat Rate Scheme Requirements for the FRS: Must issue invoices on the supplies of prescribed activities Must not include flat rate addition for supply which is not under prescribed activities or supply to a non-registered person Must submit annual sale statement Note It is an offence if flat rate addition is included in the supply to a non-registered person 10 4

105 ONLINE KLIK DISINI 10 5

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114 Transitional Period Before GST Payment received/invoice issued After commencement of GST Goods supplied/delivered to the buyers Invois Jualan..

115 Transitional Period Goods sent before GST but payment received after commencement of GST

116 Transitional Period Prepaid Card Before GST *Prepaid phone card sold (Subject to Service Tax) After GST Card be used for the telecommunication services *Kad telefon tertakluk kepada SST 6%

117 Transitional Period Before GST Flight ticket sold After GST commencement The services rendered

118 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 12 2

119 Payment / invoices on supply of goods BEFORE GST ON OR AFTER GST IMPLICATION ON GST Taxable goods supplied (available / removed) Invoice issued with sales tax Full Payment received / part payment received with sales tax paid Invoice issued / Payment received by non-licensee Invoice issued / Payment received Payment received / Invoice issued Taxable goods supplied Taxable goods supplied Taxable goods supplied Supply non-taxable goods under Sales Tax Act Subject to SALES TAX Subject to sales tax Subject to sales tax on the whole supply or part of the supply that relates to payment of sales tax Value of supply deemed inclusive of GST and account in the 1 st taxable period after the appointed date Value of supply deemed inclusive of GST and account in the 1 st taxable period after the appointed date 12 3

120 Supplies spanning GST Before GST On or After GST Implication on GST Prescribed Services supplied Payment received Not subject to GST Subject to service tax Payment received / service tax charged or paid Prescribed Services supplied Not subject to GST Subject to service tax Payment received / invoice issued Non-prescribed services supplied Prescribed services supplied by nonlicensee Value of supply deemed inclusive of GST and account in the 1 st taxable period after the appointed date Goods imported Release from customs control Subject to GST and date of importation is when released from customs control 12 4

121 Supplies Spanning GST If the invoice for renting a hall is issued before GST implementation date, prior to an event which would only take place on or after : The services will not be subjected to GST but subject to service tax.

122 Supplies Spanning GST Tickets sold before GST implementation but services perform on or after 1,4,2015 eg. admission tickets to theme park Subject to GST; Amount paid to be GST inclusive eg: Ticket price at RM100 x 6% to be shown as RM (not separated)

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124 Non-reviewable contract Written contract with no provision to review consideration for the supply until a review opportunity arises AND Non-Reviewable Contract 24 months before the date of GST implementation ( ) 12 8

125 Non-reviewable contract What is long-term non reviewable contract for GST purpose? written long-term contract entered into not less than 2 years before with no provision to review consideration for the supply until a review opportunity arises; and supplies can be zero-rated (charged with GST at 0%) for a period of five years from or the duration of the contract, whichever is the earlier

126 Non-Reviewable Contract Meaning of review opportunity Opportunity for supplier either by himself or with agreement to change the consideration because of the imposition of GST conduct a review after , renegotiation or alteration of consideration, or conduct a review before , renegotiation or alteration of the consideration 13 0

127 Non-Reviewable Contract Zero rate supply for 5 years after or when a review opportunity arises whichever is the earlier 1st. April, 2015 (Appointed Date) 5 years after AD Review Opportunity Review Opportunity 13 1

128 Non reviewable contract Zero rate supply for 5 years after or when a review opportunity arises whichever is the earlier if both supplier and recipient are registered persons; supply is a taxable supply; and the recipient of the supply is entitled to claim full input tax on the supplies he makes After 5 years period, revert to either standard rate or zero rate For all other contracts that span GST implementation, the portion of the supply that is attributable to post GST implementation is chargeable to tax. 13 2

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130 Special Refund Stocks on Hand Special sales tax refund to be given subject to conditions claimant is a GST registered person claimant on the appointed date holds the goods for the purpose of making a taxable supply goods subject to sales tax and the sales tax has been paid invoice is available Actual amount of sales tax to be refunded if the amount of sales tax paid was shown clearly on the invoice or import documents 13 4

131 Special refund on goods held on hand Entitle to special refund of sales tax if: 100% sales tax claimable claimant is a registered (mandatory) person on AD hold goods on AD for making taxable supply (goods or services) goods are subject to sales tax holds relevant invoices, import document to show sales tax has been charged goods where sales tax has been paid before AD holds payment documents (cheque, payment voucher, etc.) to show sales tax has been paid 13 5

132 Special Refund Goods not eligible for special refund capital goods e.g. building and land goods used partially or incorporated into other goods e.g. raw materials, work in progress goods for hire e.g. cars, generators goods not for business e.g. personal use goods not for sale or exchange e.g. containers, pellets, stationeries, moulds, manufacturing aids goods entitled to drawback goods allowed sales tax deduction under Section 31A STA 1972 (credit system) 13 6

133 Special Refund Manner to claim special refund claim within 6 months from appointed date for special refund < RM10,000 require audit certificate signed by a chartered accountant for special refund RM10,000 require audit certificate signed by an approved company auditor use special form to claim refund (online only) to be given in eight (8) equal installments over a period of two (2) years to account as output tax if special refund is claimed and goods are returned 137

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135 Reduce special refund to 20% (20% method) Special Refund purchased goods from non licensed manufacturers goods are subject to sales tax hold invoices which does not show sales tax has been charged claimant is mandatory registered under GST hold goods for making taxable goods on GST implementation date 13 9

136 20% method reduce the actual purchase price by 80% for goods held on hand on GST implementation date Special refund Example: Special Refund = actual price x 20% x sales tax rate Purchased RM15,000 of raw materials but holds RM10,000 on GST implementation date Special refund = RM10,000 x 20% x 10% = RM

137 Transitional Period GST Treatment on Goods Returned If a GST registered person has claimed a special refund on goods held on hand and subsequently returned the goods to the supplier (a licensed manufacturer under the Sales Tax Act), he shall account the amount of special sales tax refund as his output tax 14 1

138 GST Implementation Day Matters to consider price display GST inclusive tax invoice to show GST chargeable 14 2

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140 Business Preparation for GST Government System & Processes Human Resource GST Readiness Accounting & Finance Sales & Marketing Purchasing & supply chain 14 4

141 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 of GST returns computerised system ready made software upgrading present system 145

142 Business Preparation for GST GST Implication on Registration is required to be in the GST system can volunteer to be in the GST system voluntary registration input tax consideration consumer profile 146

143 Business Preparation for GST Areas Pricing Policies Stock Management GST Implications 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 Monitor business stocks (e.g. raw materials) - Special sales tax refund conduct stock take 14 7

144 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 may be 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 in making payment of GST before collection from customers 14 8

145 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 Full Tax invoice necessary Simplified Tax invoice Accounting system able to capture and keep track of GST in financial year Online submission of GST returns to Customs Department Enhance existing system 14 9

146 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) - Conduct stock take - Special sales tax refund - Computerised accounting system Legal advice with regards to contract Avoid long term contract without legal review Advertising Requirement to show price as GST inclusive 15 0

147 PUSAT PEMPROSESAN GST (GPC) Pusat Pemprosesan GST Jabatan Kastam Diraja Malaysia Kompleks Kastam WPKL No.22 Jalan SS 6/3 Kelana jaya Petaling Jaya Selangor Darul Ehsan No.Tel : No.Fax : ii) GST PORTAL iii) Customs Call Centre (CCC) Tel: Fax: ccc@customs.gov.my 151

148 Thank you Sabariah Md Yusof Bahagian GST JKDM, Putrajaya