Implementation of Sales & Service Tax "SST" with effect from 1 September 2018

With the new implementation of Sales & Service Tax Act with effect from 1 September 2018, company who in the business of supplying taxable supply under the new Sales & Service Tax Act 2018 is required to register themselves if the value of the taxable supply exceeding the registration threshold of RM500,000. (RM1,000,000 for Food & Beverage industry).

a) What is Service Tax?

• Service tax that is a tax charged and levied on taxable services provided by any taxable person in Malaysia in the course and furtherance of business.
• Taxable person is any person who belongs in Malaysia and is prescribed to be a taxable person.
• Taxable service is any service which prescribed to be a taxable service.

b) When is Service Tax due and payable?

• Tax is due and payable when payment is received for taxable service provided to customer by the taxable person

c) What is Sales Tax?

• A single stage tax levied on imported and locally manufactured goods, either at the time of importation or at the time the goods are sold or otherwise disposed of by the manufacturer.

d) Threshold

• Any person providing taxable services liable to be registered if the total amount of taxable services provided by him in 12 months exceed threshold.

e) Taxable Period

• Bimonthly

Did my supply consider as taxable supply?

You could always check your status for Sales tax & Service Tax registration at the https://sst01.customs.gov.my/account/inquiry. 

For your information, custom has automatically register your business as Sales Tax & Service Tax registrant based on your business code (if you are GST registrant) that you have provided during the GST era. You should have received the letter from Custom via email on the earlier August 2018 about the registration, if any. 

Should your business are required to be registered under the SST, but you are not registered by custom, please proceed to the registration at https://mysst.customs.gov.my/ in order to avoid penalty.

Who should register for Sales Tax licence?

A person who sell / supply taxable goods manufactured by him in Malaysia. Rate for Sales tax are 5% or 10% depends on the type of goods being manufactured.

Definition of Manufacturing: Conversion of materials by manual or mechanical mean into a new product by changing the size, shape, composition, nature or quality of such materials, including the assembly of parts into a piece of machinery or other products/

- Installation of machinery or equipments for the purpose of construction will not be regarded as manufacturing for sales tax.

Who should register for Service Tax Licence?

A person who supply taxable services made in the course or furtherance of any business in Malaysia. Rate for service tax is 6%. Prescribed taxable Service please refer to https://mysst.customs.gov.my/RegisterBussiness

We urge you to register your business for Sales and Service Tax if you meet the criteria as mentioned above in order to avoid the penalty on non registration and non compliance. Should you need further clarification, please do not hesitate to contact us.