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Updates on GST and Sales Tax Exemption

The Royal Malaysian Customs Department (RMCD) has released two GST guidelines pertaining to GST adjustment, issuance of tax invoice, debit note and credit note, as well as retention payment after 1 September 2018. Briefly, the guidelines provide for the following:

GST adjustment

  • Bad debt relief is claimable by amending the final return, subject to fulfilling the conditions.
  • Conditions to claim bad debt relief, including the definitions of ‘insolvency’ and ‘sufficient efforts’ to recover the debts, has been specifically defined in the guideline.
  • A registered person is required to account for the output tax for any bad debt recovered.
  • Output tax is required to be accounted for outstanding amounts due to a supplier for which input tax has been claimed and the payment has not been made after six months from the acquisition.
  • In the event the amount due to the supplier is paid, the registered person is entitled to claim the input tax by amending the final return.

Tax invoice, debit note and credit note

  • A tax invoice is not allowed to be issued after 1 September 2018. A registered person may however, issue an invoice other than a tax invoice and is required to account for any output tax accordingly in the final return on or before 29 December 2018.
  • Any GST due and payable that has yet to be accounted for, shall be amended in the final return.
  • Debit notes and credit notes issued after the submission of the final return shall be adjusted accordingly by amending the final return.

Retention payment

  • A registered person is not required to account for output tax on any invoice issued for retention sum or any retention payment received, whichever is earlier, on or after 1 September 2018, relating to work done before 1 September 2018.

These two guidelines shall prevail over any inconsistencies between previous decisions and the provisions stated therein.  They may be downloaded from the following link.

Reports Required for Sales Tax Exemption under Schedule B and Schedule C

The RMCD has also released the reports that must be prepared for sales tax exemption under Schedule B and Schedule C of the Sales Tax Order (Persons Exempted from Payment of Tax) Order 2018.  The reports must be prepared every three months from the date of the exemption certificate.  They are not required to be printed or submitted to the RMCD and may be download from the following link.  Details on the reports and their preparation may be read from the news section of the MySST portal (

Please contact your respective Grant Thornton indirect tax adviser should you require further guidance.