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Goods and Services Tax (GST)

Awareness Session for Vendors


Bangi Golf Resort
5th August 2014
1

Agenda

N
o.

Agenda

Slides
No.

1.

Goods and Service Tax (GST) Overview

2.

GST Registration

3.

5 Important Points for Vendors

What is Goods and Services Tax (GST)


A broad-based consumption tax on goods and services in Malaysia
Proposed start date of 1st April 2015
Sales Tax and Service Tax will be repealed
Applicable GST rate - proposed to be 6%
Proposed threshold - RM500,000
Imposed on money spent, not earned
Certain goods and services to be exempted
Transaction based, a multi-stage tax applied at each stage of the production
and distribution process
Allows offset of input tax against output tax

Page

Multi-stage tax collection and payment


Sale price
(Before GST)

Supplier price
= 400

Manufacturer
price = 1,000

GST @ 6%

Supplier
Sale price = 424 (inclusive of GST)

Manufacturer
Sale price = 1,060 (inclusive of GST)

Local consumer
Payment to Manufacturer = 1,060

Page

Payment to
GST Authority
By Supplier
Output tax
24
Less: Input tax
GST payable 24

By Manufacturer
Output tax 60
Less: Input tax 24
GST payable
36

GST paid by
consumer

= 60

How does GST work

GST is charged on, any taxable supply of goods and services, by a GST registered
person in Malaysia and is called OUTPUT TAX

GST is recovered on your purchases used for the purpose of making a taxable supply
in the course or furtherance of business and is called INPUT TAX

Types of supplies
1.

Standard rated
Taxable Supplies
(apply to most goods and services)

2.

Zero rated
Taxable Supplies
(applicable to exports and sale of essential goods)

3.

Exempt

4.

Out-of-scope

Page

No GST (Input tax not recoverable)


No GST

Input tax
recoverable

Types of supplies

Page

GST Registration
Mandatory Registration
Vendors who make taxable supplies and annual revenue
turnover above the prescribed threshold (RM500,000.00 per
year).
Registration will be opened 6-month before GST
Voluntary
Registration
implementation
date.
However, vendors can choose to register voluntarily even
though their annual revenue turnover below the prescribed
threshold (RM500,000.00 per year).
Liabilities to register are determined by:
Historical Turnover (based on turnover exceeds the
threshold in the past 12 months); OR
Future Turnover (based on turnover exceeds the
threshold within the future 12 months)
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5 Important Points for Vendor


To ensure smooth operation of TNB after the GST is
implemented, vendor needs to take note on the
followings:
1.
5.
Contract
spanning
1st April
2015

4. Pricing

Responsibility
as TNBs GST
registrant
vendors

2.
Deregistrati
on

5 Important
Points
3. Tax
Invoice
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1. Responsibility as TNBs GST Registrant


Vendors
As a GST registered vendor under GST regime, you are
entitled to:
o Collect GST (Output Tax) through the sales of goods
and services that you made to your customers.
o Pay GST (Input Tax) on the purchase of goods and
services to your suppliers.
o Pay GST (Input Tax) to Royal Malaysian Customs
Department (RMCD) for the importation of goods into
Malaysia.

1. Responsibility as TNBs GST Registrant


Vendors (continue)
Once registered, you are required to submit to TNB the
followings:
o GST registration number; and
o GST registration certificate/document as proof of
registration.
This is to allow TNB to record your GST registration number
in its database.

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2.

Deregistration

Kindly inform TNB if you have deregistered or your GST


registration is cancelled. All with documentary evidences
must be provided as well.
This will allow TNB to change your business entity status in
our database from GST registered to Non-GST registered.
Once deregistered, you are not allowed to charge GST
(input tax) on supplies made to TNB and also you are not
required to issue a tax invoice/debit note/credit note
showing GST components.

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3.

Tax Invoice

TAX INVOICE
A GST registered vendor must provide a valid Tax Invoice
to TNB.
The Tax Invoice can either be a Full Tax Invoice or a
Simplified Tax Invoice depending on the value of the
supplies but both must be in the format required by RMCD.
Both types of Tax Invoice will allow TNB to claim input tax
credit (ITC).

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3.

Tax Invoice (Continue)

DEBIT NOTE AND CREDIT NOTE


Debit Note and Credit Note must be issued if the price in a
previously issued Tax Invoice has been increased or
decreased and the GST charged previously needs to be
adjusted accordingly.
Under the GST regime a Debit Note and a Credit Note needs
to be issued when the consideration for a previous supply
changes.
All tax invoices, debit notes and credit notes must be in the
RMCD prescribed format.

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Example of Tax Invoice Full Tax


Invoice

14

Example of Tax Invoice Simplified Tax


Invoice

Tax Unit
Group Finance

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4.

Pricing

Under the GST regime:


There will be no sales tax or service tax charged on supplies
made to TNB by vendors from 1st April 2015 onwards.
Savings and/or cost reductions may be passed on by vendors
to TNB as you will save on sales and services tax (if any)
from existing contracts with TNB that straddle 1st April 2015.
Prices for the same supplies made after 1 st April 2015 should
be relatively cheaper as sales and services tax will be
abolished and should not form part of the pricing
component.
You will pay GST on good and services supplied to you and
you will seek to charge GST in your prices for supplies made
to TNB from 1st April 2015 onwards.
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5.

Contract spanning 1st April 2015

All pre- GST contracts that spanning on/after 1 st April 2015


entered into between the vendors and TNB are treated in the
following manner under the proposed GST Law:
All contracts that are entered into after 1st April 2013 will be
standard rated.
All contracts that are entered into before 1st April 2013 with
an opportunity to review will be standard rated after 1st
April 2015.
All contracts that are entered into before 1st April 2013 for a
fixed price with no opportunity to review will be zero-rated
for 5 years until 31st March 2020 or until the first opportunity
to review takes place whichever is earlier.

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