GST SEMINAR MALAYSIA AUTOMOTIVE INSTITUTE (MAI) BUSINESS PREPARATION. Date : 19th. June 2014 Place: Hotel Ixora Seberang Prai Penang

Transcription

1 GST SEMINAR MALAYSIA AUTOMOTIVE INSTITUTE (MAI) BUSINESS PREPARATION Date : 19th. June 2014 Place: Hotel Ixora Seberang Prai Penang

2 Briefing Agenda 1. Supplies Spanning GST 2. Non Reviewable Contract 3. Registration 4. Special Refund 5. Business Preparation for GST 2

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5 Supplies Spanning GST Meaning of supply spanning GST payment or invoice before appointed date and supply takes place on and after appointed date e.g. sales of goods, airline tickets and cinema General Rule any supply before appointed date not subject to GST any supply on or after appointed date subject to GST Exception to the general rule supply of warranty provision of services where service tax has been charged provision of goods where sales tax has been charged non reviewable contracts 5

6 Supplies Spanning GST General Rule: AD 1 st. April, 2015 (Appointed Date) No tax (GST) on:- a. Supply of goods, b. Supply of services c. Importation of goods 6

7 Supplies Spanning GST 1 st. scenario: Invoice issued AD 1 st. April, 2015 (Appointed Date) Goods supplied Payment received Services performed Value of supply [GST inclusive] Deemed:- Invoice issued or payment received on AD 7

8 Supplies Spanning GST 2 nd. scenario: Licensees under Sales and Service Tax Act Licensees is a taxable person under GST Tax Act Invoice issued AD 1 st. April, 2015 (Appointed Date) Goods supplied Payment received Services performed No GST chargeable on the supply of goods or services made on or after AD 8

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10 Non Reviewable Contract Non reviewable contract written long term contract with no provision to review consideration for the supply until a review opportunity arises AND 24 months before the date of GST implementation { 1 st. April, 2015 } 10

11 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 AD, renegotiation or alteration of consideration, or conduct a review before AD, renegotiation or alteration of the consideration 11

12 Non Reviewable Contract Zero rate supply (charged with GST at 0%) for 5 years after appointed date 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 input tax on that supply After 5 years period, revert to either standard rate or zero rate 12

13 Non Reviewable Contract Zero rate supply for 5 years after appointed date or when a review opportunity arises whichever is the earlier AD 1 st. April, 2015 (Appointed Date) 5 years after AD 31 st. March, 2020 Review Opportunity Review Opportunity 13

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15 Registration Registration during the transitional period:- AD 1 st. April, 2015 (Appointed Date) Registration application 3 months before Registration effective on or from the appointed date 15

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17 Special Refund Entitle to special refund of Sales tax (100%) if claimant is registered (mandatory) person hold goods on appointed date for making taxable supply goods are subject to sales tax hold relevant invoices or import document to show sales tax has been paid 17

18 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 Sales Tax Act 1972 (credit system) 18

19 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 19

20 Special Refund Reduce special refund to 20% (20% method) purchase goods from non licensed manufacturers goods are subject to sales tax holds invoices which does not show sales tax has been charged claimant is a registered (mandatory) person hold goods on appointed date for making taxable goods 20

21 Special Refund 20% method reduce the actual purchase price by 80% for goods held on hand on appointed date Special refund = actual price x 20% x sales tax rate Example: Holds RM10,000 of raw materials on appointed date Special refund = RM10,000 x 20% x 10% = RM200 21

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23 WHAT BUSINESS SHOULD DO Establishing GST committee Modification to accounting system Preparing bills and invoices Utilising GST Portal GST Forms 23

24 ESTABLISHING GST COMMITTEE To implement a GST compliant system GST Project Team 1 st phase 2 nd phase 3 rd phase Initiate impact study Make changes to system processes and staff training Pre GST and dry run Apr June 2014 (3 months) Key areas requiring attention July Jan 2015 (7 months) Feb Mar 2015 (2 months) Tax regulatory compliance Documentation and system Legal and transitional issues Education and training Vendor and supplier communication 24

25 MAPPING TRANSACTIONS DEPARTMENT Finance, Administration and Legal Marketing and Sales Cash flow impact and cash optimisation Compliance cost and budgeting Review legal contracts and documents Maximise claim for input tax Claim special refund Monitor bad debts Get the correct appropriate registration Apply for special schemes Cancel sales tax and service tax licence Effect on prices Tax invoice Credit terms ACTION TO BE TAKEN Purchasing IT Corporate Strategy Staff Supplier selection Document for input tax claim Accounting system Optimise business model Optimise corporate structure Staff training GST Project Team 25

26 BUSINESSES PREPARATION GST Implication on Prices identify existing suppliers talk to small suppliers to get them registered review procurement policy to avoid tax cascading negotiate prices with suppliers to pass on savings review sales price pass on savings absorption of GST Price Control and Anti Profiteering Act

27 BUSINESSES PREPARATION GST Implication on Stock Management monitor business stocks purchase strikes and lulls procurement policy registration and deregistration special refund physical stock take on hand documents to support refund audit certificate 27

28 BUSINESSES PREPARATION GST Implication on Cash Flow need to analyze cash flow impact cash recover from customer before GST is due assess the need to provide for one time fund to cater for GST payment upfront review credit terms to customers review requirement to apply for special schemes 28

29 BUSINESSES PREPARATION GST Implication on Bad Debts ensure a proper matching of GST payment to government and payment received from customers monitor payment from customers understand evidence of reasonable efforts 29

30 BUSINESSES PREPARATION GST Implication on Invoicing identify whether standard rate, exempt, zero rate or out of scope supply issuance of full and simplified tax invoice requirement not to issue tax invoice for imported services and second hand goods under margin scheme 21 days rule self billed invoice 30

31 BUSINESSES PREPARATION GST Implication on Output Tax gifts > RM500 subject to GST commercial samples in a form not ordinarily available for sale to the public not subject to GST deemed supply e.g, private use and disposal of business assets subject to GST supplies to connected persons 31

32 BUSINESSES PREPARATION GST Implication on Input Tax blocked inputs not claimable incidental financial supplies claim > tax amount more than RM30 to be supported by full tax invoice De Minimis rule 32

33 BUSINESSES PREPARATION GST Implication on Contracts avoid long term contract without legal review absorption of GST pricing strategy to pass on savings GST Implication on Human Resource enhance staff understanding of GST avoid unnecessary mistakes false information may open to audit case review policy on employee benefits 33

34 BUSINESSES PREPARATION GST Implication on System review system and processes perform complete mapping of transactions to identify required changes GST liability on every transaction use of online submissions to the Customs computerized system ready made software upgrading present system 34

35 GST PORTAL 35

36 GST FORMS GAZETTED FORMS FORMS NO. GST-01 GST-02 GST-02A GST-02B GST-03 GST-04 GST-04A TITLE Application for Goods and Services Tax Registration Application for group / Joint ventures registration Group Member/ Venturer registration Notice of change of representative member/ venture operator and removal of group member/ venturer Goods and Services Tax Return Goods and Services Tax Declaration by person other than taxable person Auction/ sale in satisfaction of debt details for GST registered principal 36

37 GST FORMS GST -01 Name of form : Application for goods and services tax registration. Application to be a GST registered person Type of registration: Normal Single taxable person Single entity Branch / division 37

38 GST FORMS GST-03 Name of form : Goods and services tax return. Document Identification No: generated by the system if GST-03 is submitted electronically. Given by officer in charge if GST-03 is submitted manually. 38

39 GST FORMS NON-GAZETTED FORMS FORMS NO. TITLE GST- A Registration / Inclusion / Removal / Update of Director /Owner/ Partner / Principal Office Bearer / Capital Market Services Representative/ Authorized Person GST- B GST- C GST- D Registration of Branch or Division Registration / Inclusion / Update of Sole Proprietorship Entity Details of Overseas Principal 39

40 GST FORMS ADMINISTRATIVE FORMS FORMS NO. GST- Adm1 GST-Adm1A GST-Adm1B GST-Adm1C GST-Adm1C(i) GST- Adm1C(ii) TITLE Application for Approved Trader Scheme/Approved Toll Manufacturer Scheme / Approved Jeweller Scheme Details of Finished Goods / Services Supplied Under Approved Trader Scheme/Approved Toll Manufacturer Scheme / Approved Jeweller Scheme Details of Raw Material / Components / Accessories and Machine Imported Under Approved Trader Scheme Details of Principal and Value Added Activities under Approved Toll Manufacturer Scheme Local Customer Details and Undertaking under Approved Toll Manufacturer Scheme Raw Material / Components Details under Approved Toll Manufacturer Scheme 40

41 FORMS NO. GST- Adm1D GST-Adm2 GST-Adm2A GST-Adm2B GST-Adm3 TITLE Details of New Application / Additional Supplier of Local Precious Metal Approved Jeweller Scheme Application for Flat Rate Scheme/Margin Scheme/Self-Billed Invoice/Tourist Refund Scheme Supplier Details of and Undertaking Under Self-Billed Invoice Branch / Outlet Details under Tourist Refund Scheme (TRS) Application for Goods and Services Tax Registration Exemption GST-Adm4 Application for Cancellation of Goods and Services Tax Registration / Special Scheme GST- Adm5 GST FORMS ADMINISTRATIVE FORMS Application for Review GST- Adm6 Installment Application Form 41

42 GST FORMS ADMINISTRATIVE FORMS FORMS NO. GST- Adv1 GST- Adv1-1 GST- Adv1-2 GST- Adv2-1 GST-Adv3 TITLE Application for an Advance Ruling Application for Extension of time to submit additional documents/ information Withdrawal of Advance Ruling Application Application for Withdrawal of Issued Advance Ruling Application for Extension of Advance Ruling 42

43 Wish List Both business community and Government are well -prepared to implement GST Implementation problems are minimized Minimum impact on prices of goods and services Public accept GST implementation 43

44 INQUIRY 1 Ketua Setiausaha, Perbendaharaan Malaysia Pejabat Pelaksanaan GST Komplek Kementerian Kewangan, No.5, Persiaran Perdana, Pusat Pentadbiran Kerajaan Persekutuan Malaysia, PUTRAJAYA. Tel : Customs Call Centre (CCC) Tel: Fax: ccc@customs.gov.my 3 GST PORTAL 44

45 Thank you Royal Malaysian Customs Ministry of Finance Malaysia 45