Malaysia Goods And Services Tax (GST)
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Business.Com.My™ - Malaysia Goods And Services Tax (GST) Information

GST Concept & Fundamentals

GST shall be levied and charged on the taxable supply of goods and services made in the course or furtherance of business in Malaysia by a taxable person. GST is also charged on the importation of goods and services.

A taxable supply is a supply which is standard rated or zero rated. Exempt and out of scope supplies are not taxable supplies. GST is to be levied and charged on the value of the supply.

GST can only be levied and charged if the business is registered under GST. A business is not liable to be registered if its annual turnover of taxable supplies does not reach the prescribed threshold. Therefore, such businesses cannot charge and collect GST on the supply of goods and services made to their customers. Nevertheless, businesses can apply to be registered voluntarily.

Almost all countries collect income tax, which is a percentage of what you earn as an individual. Another way the government gets revenue is by collecting tax from business operations, like sales tax and duties on items that are bought or sold.

We need to pay tax so that the government can operate. GST is one method of collecting taxes which works better than others.

How GST is charged at each level of supply chain - standard rated supply

GST Mechanism - Standard Rated





Retailer (You) Is Not GST Registered


GST 6%

  Sales price RM100,000 Sales price RM150,000 Sales price RM175,000
Assume manufacturer's GST for purchases is RM2,000 Add GST 6% RM6,000 Add GST 6% RM9,000 Add GST 6% Not applicable
Total

RM106,000

Total

RM159,000

Total

RM175,000

  Input tax credit RM2,000 Input tax credit RM6,000 Input tax credit can't claim
GST remit RM4,000 GST remit RM3,000 Cost increased RM9,000
(6,000-2000)   (9,000-6000)   Cost increased N/A






 


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