In few days time, the newly proposed Sales and Service Tax (SST) will be replacing Goods and Service Tax (GST) on 1st September 2018 in Malaysia.
As SST is made up of two separat Tax Act, therefore, registration under these two acts are slightly different as well.
Sales Tax
You will be required, by the law, to register for SST if you are a manufacturer of taxable goods and have a taxable goods sales value that exceeds the threshold level of RM500,000 within 12 months. You will need to be registered not later than the last day of the month following the month that you are liable to be registered.
For example: If you are liable to be registered on 11th October 2018, you will then require to apply for SST registration within the period of 1st November to 30th November 2018.
The term "Manufacturer" under section 3 of the Sales Tax Act 2018 is defined as the party who converts materials by manual or mechanical means into a new product by changing the size, shape, composition, nature or quality of such materials. The term also includes assemblies of parts into a piece of machinery or other products. However, manufacturer DOES NOT include the party who installs machinery or equipment for the purpose of construction." In terms of petroleum, manufacturer refers to the party who are involved in the process of seperation, purification, conversion, refining and blending of petroleum.
For manufacturer of taxable goods, you are liable to register SST when the total sale value of all his taxable goods in that month and the eleven months immediately preceeding or succeeding the month has or is expected to exceed RM500,000.
For example:
1) If by the end of December 2018, your total sale value from Jan 2018 to Dec 2018 has exceeded RM500,000, you are liable to be registered on 31st December 2018 and you have to register not later than 31st January 2018.
2) If by the end of January 2018, your estimated total sale value from Jan 2018 to Dec 2018 exceeds RM500,000, you are liable to be registered on the 31st January 2018 and you have to register not later than 28th February 2018. ed, you will need to submit a new application for SST registration.
For more information on registration of Sales Tax, please refer to the official guide.
Service Tax
Under the Service Tax Act 2018, you will be legally liable to register for SST if you provide taxable services in Malaysia and the value of taxable services exceed the threshold level of RM500,000 within a 12 months period.
Similar to the Sales Tax registration, when you are liable to register for SST, you will need to be registered by the last date of the last day of the month following the month that you are liable to be registered.
Application
The Royal Custom Department Malaysia has announced that SST registration will be automatically done for those who had registered for GST and had fulfilled the requirement to be registered for SST. You may check your registration status through SST online portal at www.mysst.customs.gov.my.
In cases where you know that you are required to register for SST but is not automatically registered, you will need to submit your registration application not later than 30th September 2018 or on the following month which you are liable to be registered. All registration for SST is through SST online portal at www.mysst.customs.gov.my.
Voluntary Registration
Voluntary registration is only allowed if you are manufacturing taxable goods or providing taxable services but did not exceed the threshold for registration.
Registration effective date
The effective date for you to pay or charge SST is on the 1st day of the following month after you have registered.
Deregistration
You may apply to cancel your registration if you are no longer liable to be registered under the following circumstances:
a) Ceases to manufacture taxable goods or provide taxable services
b) Total sales or service value for the next 12 month period does not exceed the threshold level for registration
You can refer to the deregistration blog in TreezSoft for more information on how to cancel your SST Auto Registration.
You can also visit the links below to read more on SST related topics in TreezSoft:
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