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Updates on Sales Tax and Service Tax

The Royal Malaysian Customs Department (RMCD) had recently issued updates on the treatment of sales tax on goods in the designated areas and exemption for a duty-free shop.

  • Sales tax treatment on importation of wine, spirit, beer, malt liquor, tobacco and tobacco products into designated areas is amended to a non-chargeable item effective from 27 March 2019. Consequently, the exemption of sales tax payment for these goods by any person licensed under:
    • section 65D of the Customs Act 1967 to operate a duty-free shop in a designated area, and
    • paragraph 35(1)(a) or 35(1)(b) of the Excise Act 1967 to operate a Public house or a beer house in a designated area,

is no longer applicable and has since been removed.

  • The sales tax exemption of taxable goods applicable to any person licensed under section 65D of the Customs Act 1967 to operate a duty-free shop, is amended to include duty-free shop in designated areas. A new condition for this exemption is added such that the goods are solely for sale by the person at his duty-free shop.

The RMCD had recently announced new application procedures for sales tax exemption for persons acting on behalf of registered manufacturer or registered petroleum manufacturer.

  • A new module of the application for exemption of item 3 and 4 of Schedule C of the Sales Tax (Persons Exempted from Payment of Tax) Order 2018 is now available on the MySST portal. The new module requires two parties, i.e. the registered manufacturer and the person acting on behalf of the registered manufacturer, to apply for the certificate of the exemption. The application is made based on the purchase order/ contract/ approximate purchase quantity for three months or less. The submitted application is not editable, therefore, a new application is required for any additional item. Certificates generated prior to 1 January 2019 are no longer applicable after 1 June 2019.
  • In the case of application for cancellation of any item or certificate, the application shall be submitted manually to the customs controlling station using forms provided by the RMCD with the company official letter.

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