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

GST For Tourists

GST Guide On Tourist Refund Scheme

1. Introduction

This Industry Guide is prepared to assist you in understanding the Goods and Services Tax and its implications on Tourist Refund Scheme (TRS). This guide attempts to explain to you:

  • As a tourist visiting Malaysia, manner of claiming refund of GST paid on goods purchased from Approved TRS Outlets
  • As a business, the conditions and eligibility to be an Approved TRS Outlet

2. Overview of Goods and Services Tax (GST)

Goods and Services Tax (GST) is a multi stage tax on domestic consumption. GST is charged on all taxable supplies of goods and services in Malaysia except those specifically exempted. GST is also charged on importation of goods and services into Malaysia.

Payment of tax is made in stages by the intermediaries in the production and distribution process. Although the tax would be paid throughout the production and distribution chain, it is ultimately passed on to the final consumer. Therefore, the tax itself is not a cost to the intermediaries and does not appear as an expense item in their financial statements.

In Malaysia, a person who is registered under the Goods and Services Tax Act 20XX is known as a GST registered person. A GST registered person is required to charge output tax on his taxable supply of goods and services made to his customers. He is allowed to claim input tax credit on any GST incurred on his purchases which are inputs to his business. Thus, this mechanism would avoid double taxation and only the value added at each stage is taxed.

3. Overview Of Tourist Refund Scheme

Common features and the main key players under the Tourist Refund Scheme are:

  • Tourist Refund Scheme (TRS) is a scheme that allows foreign tourists to claim GST paid on goods bought in Malaysia. Tourist claim a refund on GST paid from Approved Refund Agent on goods purchased from an Approved Outlet when they leave Malaysia by air mode
  • Tourist classified under Tourist Refund Scheme are foreign tourist who are eligible to claim refund and holds a valid international passport
  • Approved Refund Agent is an agent appointed by government thru tender, will process and refund GST claim made by outbound tourists
  • Approved Refund Agent may charge an administrative fee for processing the GST refund. Any fee chargeable should be made known to you when you purchase your goods from the Approved Outlet and apply for a refund under the scheme. The GST treatment on services of the Approved Refund Agent are to be zero rated supplies which is classified under the GST (Zero rated Supplies) Order 20XX because it is considered as export services
  • Approved Refund Agent will then recover refunds made under Tourist Refund Scheme from Royal Malaysian Customs Department (RMCD)
  • Approved Outlets are approved retailers who are GST registered person selling standard rated goods to foreign tourists
  • GST registered person operating the Approved Outlets are to display Tax Refund Logos at their outlets. When in doubt, the foreign tourists should check with Approved Outlet whether it is operating Tourist Refund Scheme or otherwise

4. Conditions For Refund Of GST Under Tourist Refund Scheme By Foreign Tourist

A tourist shall be entitled to the refund of GST under the TRS if he satisfies the following conditions:

  • You are neither a citizen nor a permanent resident of Malaysia and holding a valid international passport
  • You are a foreign diplomat leaving the country after completion of service in Malaysia and is in possession of a document from the relevant diplomatic or consular mission stating that you are departing from Malaysia
  • You are not, in the 3 months preceding the date of purchase of the goods , been at any time employed in Malaysia
  • You depart Malaysia by means of air transportation
  • You are not a member of the cabin or flight crew of the aircraft on which you are departing out of Malaysia
  • You must purchased the goods within 3 months before the date of departure
  • You have to spend at least three hundred Ringgit Malaysia or more at the same Approved TRS Outlet. Accumulation of purchases are allowed if purchases are made from the same store on different days
  • You must bring the goods out of Malaysia to another country as accompanied (hand carried) or unaccompanied (check in) luggage
  • If you are entering or staying in Malaysia on a student pass, your entitlement under Tourist Refund Scheme is like any other foreign tourists

5. Goods Not Eligible For GST Refund Under Tourist Refund Scheme 

You may claim refund on the GST charged and paid on goods purchased from an Approved TRS Outlet, except for the following:

  • Tobacco and tobacco products
  • Precious metal and gems stone
  • Wine, spirit, beer and malt liquor
  • Goods which are wholly or partially consumed in Malaysia
  • Goods which are absolutely prohibited from export under any written law
  • Goods which are not taken out as an accompanied (hand carried) or unaccompanied (check in) luggage

6. Manner/ Procedure Of Claiming GST Refund By Tourist At Approved TRS Outlets

A tourist claiming for GST refund under Tourist Refund Scheme will have to fulfilled the following requirements:

  • Show your international passport to Approved Outlet operator to prove that you are eligible for GST refund under the scheme
  • Get an original tax invoice or receipt for your purchase
  • Ask for a refund form from Approved Outlet operator and ensure that the refund form is completed and signed/endorsed (in the presence of the Approved Outlet operator) by both the Approved Outlet operator and the tourist (owner of the goods purchased). The refund form should contain the following particulars:

    • Tourist personal particulars
    • Date of arrival in Malaysia
    • Intended date of departure from Malaysia
    • Date of purchase
    • Tax invoice or receipt number
    • Description and quantity of goods purchased
    • The total amount payable, inclusive of GST, the total amount of GST refundable, the amount of administrative/processing charge/fee and net amount of GST refundable

  • Tourist to indicate in the appropriate column in the refund form on how the refund is to be made
  • The refund can be made:

    • by cash for amount not exceeding 300 Ringgit Malaysia or cheque  OR
    • through bank (cheque/account)or credit card account

  • Tourist to keep the original copy of the tax invoice or receipt and the completed refund form for the purpose of producing these documents together with the goods to Customs at the airport prior to departure
  • Tourist are advised to get and complete refund form from Approved  Outlet and no refund form will be provided at the Customs counter

7. Manner/ Procedure For Claiming GST Refund At Malaysian International Airport  

Tourist are required to present the goods to the officer of customs for verification at the GST Refund Verification Counter upon departure before the airport check in (before immigration for unaccompanied luggage) and in the Departure Hall (after immigration for accompanied luggage)of the Malaysian International Airports, together with:

  • Goods purchased at the Approved Outlets 
  • Original tax invoice or receipt issued by Approved Outlets 
  • Completed refund form 
  • Touristís international passport 
  • Boarding pass or confirmed air ticket (as proof of departure)

There will be two Customs Verification Counters (GST Refund Verification Counter) at the Malaysian International Airport. The GST Refund Verification Counters will be located before check in into the airport (unaccompanied luggage) and at the Departure Hall for hand carried (accompanied) luggage. The Verification Counter at the Departure Hall will be located in between/around the Approved Refund Agentís counter.

After the application form has been endorsed/verified by the officer of customs, the tourist shall not part with the possession of the goods or give it to another person, except to the counter staff for checking in.

The goods shall not be brought out of the premises of the International Airport Departure Hall after the refund application form has been endorsed by the officer of Customs unless otherwise approved by the senior officer of customs.

The application that has been endorsed by the officer of customs shall be submitted to the Approved Refund Agent either personally at the International Airport or by post within two months from the date of RMCD endorsement. The endorsed refund form can also be put into the mail box before departing. The mail box is to be located near the Approved Refund Agent counter.

The refund is to be made by the following mode of payment:

  • By cash for amount not exceeding 300 Ringgit Malaysia or  
  • Through bank account/cheque or  
  • Credit card account  

For flights departing from any terminal at the Malaysian International Airports, if the tourists are carrying:

  • Accompanied luggage-required to present the goods and refund form at the GST Refund Verification Counter located at the departure hall/lounge of all international airports. The GST Refund Verification Counter for accompanied luggage are to be location after the Immigration Counter at all international airports. Accompanied luggage should not weigh more than 7kg   
  • Unaccompanied luggage-required to declare bulky items/goods such as DVD/CD Player /television set or goods the tourists have packed into their luggage together with relevant documents(invoice/receipt/refund form/international passport)/confirmed air ticket/boarding pass at the GST Customs Refund Inspection Counter before checking in the goods at the airport. The refund form need to be endorsed by Customs before goods are to be check in as unaccompanied luggage. The Customs verification counter for unaccompanied luggage is to be located before Immigration Counter at all international airports   
  • For flights departing from the Budget Terminal (LCCT), irrespective of whether the tourist are going to hand carry (accompanied) their goods on board the aircraft or check in (unaccompanied), the tourists are also required to present the goods together with relevant documents and confirmed air ticket to the Customs at the GST Customs Refund Inspection Counter located before check in into the  LCCT Terminal (unaccompanied luggage) and in the Departure Hall for hand carried (accompanied) luggage   
  • Tourists who have hand carried luggage (accompanied) which do not meet the allowable airline requisite (more than 7 kg) are allowed to take the goods out as unaccompanied luggage
  • If the customs officer is satisfied that all conditions of the TRS have been met, the customs will endorse and return the refund form to the tourists. Tourist will:

    • Proceed to the Approved Refund Agentís Counter to get GST refund in either cash (for amount not exceeding RM300), payment through credit card, bank account or through a bank cheque
    • Seal the refund form in an envelope (given to tourists by Approved Outlet operator) and pos it to the Approved Refund Agent to process the GST refund within 2 months of RMCD endorsement or drop the refund form in the mail box located near the Approved Refund Agentís counter before departing from Malaysia through air mode

8. Conditions And Eligibility Of Approved TRS Outlets Under Tourist Refund Scheme  

Retail outlets can apply to be Approved TRS Outlets under the Tourist Refund Scheme if the following conditions are fulfilled :

  • To be appointed by Approved Refund Agent 
  • Must be a GST registered person 
  • A registered user of electronic service 
  • Must account for tax on a monthly taxable period 
  • Not wholly selling non taxable goods/non tax refundable goods like liquor, cigarettes and tobaccos 
  • Selling goods to cater for tourist requirement

Approved Outlet must charge GST at standard rate on taxable goods sold to foreign tourists. Approved Outlets operators must issue a tax invoice which indicates the cost of the goods as well as the amount of GST charged.

Approved Outlet must also provide refund form to be given to tourists who wishes to claim refund of GST under Tourist Refund Scheme.

  • The TRS refund form will be issued by Approved Outlet operators in triplicate for customers, Customs and Approved  Outlet operators  
  • The original and second copy (customers/Customs) are to be given to the claimant for customs verification. The third copy will be retained by Approved Outlet operator for auditing purposes  
  • The original copy to be kept by the tourist and the second copy should be presented to the Appointed Refund Agent for refund of GST purposes after it has been endorsed by Customs (RMCD)  
  • Approved Refund Agent will use the endorsed copy (second copy) for reimbursement of GST paid to tourists on a monthly basis from RMCD  

Approved Outlets are to display Tax Refund Logos at their outlets.





 


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