GUIDELINES AND PROCEDURES FOR A MANUFACTURER IN THE PRINCIPAL

CUSTOMS AREA (PCA) TO CLAIM EXEMPTION FOR:

a) Import Duty on Machinery and Equipment Excluding Spare Parts And Consumables
Imported Or Purchased from a Licensed Manufacturing Warehouse, Bonded Warehouse
Or Free Zone under Item 115 Customs Duties (Exemption) Order 2013
b) Sales Tax on Machinery, Equipment, Spare Parts and Consumables Imported Or
Purchased from a Licensed Manufacturing Warehouse, Bonded Warehouse Or Free
Zone under Item 106 Sales Tax (Exemption) Order 2013
c) Sales Tax on Locally Purchased Machinery, Equipment, Spare Parts and Consumables
from a Manufacturer (Licensed under the Sales Tax Act 1972) under Item 106 Sales Tax
(Exemption) Order 2013

INTRODUCTION

The import duty and/or sales tax exemption on machinery, equipment, spare parts and
consumables is a facility provided under the provisions of Section 14(2) Customs Act, 1967
and/or Section 10 Sales Tax Act 1972 to manufacturers in the PCA. A company is required to
submit an application to the Malaysian Investment Development Authority (MIDA) where it
would require a processing period of four (4) weeks from the date of complete information
received.
nd
Effective 2 May 2014, manufacturers in the PCA can benefit from a self-declaration mechanism
for exemption through the Customs Duties (Exemption) Order 2013 and/or Sales Tax
(Exemption) Order 2013. Under the new mechanism, a company is required to submit the list of
machinery, equipment, spare parts and consumables prior to the importation or purchase to the
Royal Malaysian Customs Department (Customs) for permission to claim the exemption.
The submission must be accompanied by a confirmation letter as a manufacturer in the PCA
issued once by MIDA.

ELIGIBILITY

1) The Customs Duties (Exemption) Order 2013 and/or Sales Tax (Exemption) Order 2013
provide an exemption for the followings:

a) Import duty exemption on machinery and equipment excluding spare parts and
consumables imported or purchased from a Licensed Manufacturing Warehouse,
Bonded Warehouse or Free Zone under item 115 Customs Duties (Exemption) Order
2013.

b) Sales tax exemption on machinery, equipment, spare parts and consumables

imported or purchased from a Licensed Manufacturing Warehouse, Bonded Warehouse
or Free Zone under item 106 Sales Tax (Exemption) Order 2013.

c) Sales tax exemption on machinery, equipment, spare parts and consumables

purchased from a manufacturer (licensed under the Sales Tax Act, 1972) under item 106
Sales Tax (Exemption) Order 2013.

2) To qualify for the exemption, the machinery, equipment, spare parts and consumables
must be new, unused and directly used in the manufacturing process of the finished
product(s) at the approved manufacturers premise(s).

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SUBMISSION OF DOCUMENTS

The application for a confirmation letter and permission to claim the exemption must be submitted
prior to the importation or purchase of the machinery, equipment, spare parts and
consumables. The new self-declaration mechanism would reduce the costs of doing business
without the necessity of obtaining bank guarantee facilities for the clearance of goods. Companies
are advised to take into consideration the duration needed for the whole process to claim the
exemption.

i) SUBMISSION TO MIDA FOR THE CONFIRMATION LETTER AS A MANUFACTURER IN

PCA

Online application accompanied by scanned copies of the following documents should be

submitted to MIDA:

a) Manufacturing Licence issued under the Industrial Coordination Act, 1975 or

Confirmation Letter for a Company Exempted from Manufacturing Licence under the
Industrial Coordination Act, 1975 from MIDA;

b) Tax incentive approval under the Promotion of Investments Act, 1986 (PIA) or Income
Tax Act, 1967, if applicable;

c) Sales Tax Licence (CJ2 or JKED No.3) or certificate of exemption from Sales Tax
Licence (JKED No. 3) from Customs, if applicable;

d) Business Premise Licence from the Local Authority. This is applicable to a company
that is exempted from the Manufacturing Licence under the Industrial Coordination Act,
1975;

e) Registration certificate or a letter of acknowledgment if the application for the registration

certificate is pending approval from the Department of Occupational Safety and Health
(DOSH);

f) Latest printout of SSM Company Profile from the Companies Commission of Malaysia
(SSM);

g) The manufacturing process flow chart; and

h) The layout plan for the machinery and equipment in the approved manufacturers
premise and to indicate where the new machinery and equipment will be located.

A company with multiple locations must indicate a single State Customs Control Station in
the application form for the purpose of obtaining the permission to claim the exemption,
record keeping and audit.

The application form Surat Pengesahan MIDA - SPM 1/2014 is available online via
https://jpc.online.mida.gov.my.

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ii) SUBMISSION TO CUSTOMS FOR PERMISSION TO CLAIM THE EXEMPTION

A company should provide complete information on the machinery, equipment, spare parts
and consumables to be imported or purchased in the relevant appendix or form downloaded
via http://www.customs.gov.my/ms/ip/Pages/ip_pdc.aspx as follows:

a) Appendix I (SPM 1/2014) i) Import duty exemption on machinery and

equipment excluding spare parts and consumables
imported or purchased from a Licensed
Manufacturing Warehouse, Bonded Warehouse or
Free Zone under item 115 Customs Duties
(Exemption) Order 2013; and/or

ii) Sales tax exemption on machinery and equipment

excluding spare parts and consumables imported or
purchased from a Licensed Manufacturing
Warehouse, Bonded Warehouse or Free Zone
under item 106 Sales Tax (Exemption) Order 2013

b) Appendix II (SPM 1/2014) Sales tax exemption on spare parts and consumables
imported or purchased from a Licensed Manufacturing
Warehouse, Bonded Warehouse or Free Zone under item
106 Sales Tax (Exemption) Order 2013

c) Form CJ(P)2 Sales tax exemption on machinery, equipment, spare parts

and consumables purchased from a manufacturer
(licensed under the Sales Tax Act, 1972) under item 106
Sales Tax (Exemption) Order 2013

The relevant appendix and/or form (hard copy and soft copy) should be accompanied by
the following documents and submitted to the State Customs Control Station (Industrial
Section) as indicated in the SPM 1/2014 form to obtain the permission to import or
purchase the machinery, equipment, spare parts and consumables:

a) Companys covering letter

b) Confirmation letter issued once by MIDA
c) Supporting documents as requested by Customs

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PROCEDURE TO CLAIM EXEMPTION UNDER THE CUSTOMS DUTIES (EXEMPTION) ORDER
2013 AND/OR SALES TAX (EXEMPTION) ORDER 2013

APPLICANT
Submit the SPM 1/2014 form online via https://jpc.online.mida.gov.my to obtain the confirmation letter from
MIDA

MIDA
Accept complete SPM 1/2014 form and supporting documents
Issuance of the confirmation letter via online

APPLICANT
]

View and download the confirmation letter via https://jpc.online.mida.gov.my/midawebpki/checkStatus.jsp

Provide complete information on the machinery, equipment, spare parts and consumables to be imported or
purchased in Appendix I (SPM 1/2014), Appendix II (SPM 1/2014) and/or CJ(P)2 form downloaded via
http://www.customs.gov.my/ms/ip/Pages/ip_pdc.aspx
Submit the following documents to the State Customs Control Station (Industrial Section) to obtain the
permission to import or purchase the machinery, equipment, spare parts and consumables:
a) Companys covering letter
b) Confirmation letter
c) Appendix I (SPM 1/2014), Appendix II (SPM 1/2014) and/or CJ(P)2 (hard copy and soft copy)
d) Supporting documents as requested by Customs

STATE CUSTOMS CONTROL STATION

(INDUSTRIAL SECTION)
Accept complete Appendix I (SPM 1/2014), Appendix II (SPM 1/2014) and/or CJ(P)2 form and supporting
documents
Verify the confirmation letter issued by MIDA and other companys documents via
https://jpc.online.mida.gov.my/SMPCMIDA
Issuance of the permission letter for the importation or purchase of the machinery, equipment, spare parts
and consumables from a Licensed Manufacturing Warehouse, Bonded Warehouse or Free Zone
Endorse the CJ(P)2 form for the purchase of the machinery, equipment, spare parts and consumables from
a manufacturer licensed under the Sales Tax Act, 1972

APPLICANT

Submit the permission letter to the Customs Import/Export and Border Control Branch for the clearance of
goods
Purchase the machinery, equipment, spare parts and consumables from a manufacturer licensed under
Sales Tax Act, 1972 with endorsed CJ(P)2 form
Notify MIDA and the related State Customs Control Station (Industrial Section) when a company ceases
operation or winds up

For enquiries and clarification, please refer to:-

Tariff Division
Malaysian Investment Development Authority (MIDA)
Tel : 603-22673539
Fax : 603-22745156
E-mail : tarif@mida.gov.my
Website : www.mida.gov.my
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