SALES TAX 2018

GUIDE ON :
A. MANUFACTURING
B. IMPORT / EXPORT

Published by:

Royal Malaysia Customs Department

Internal Tax Division
Putrajaya

23 August 2018
Publication

Date: 23 August 2018

Copyright Notice

Copyright 2018 Royal Malaysian Customs Department.

All rights reserved. Subject to the Copyright Act, 1987 (Malaysia).

The Guide may be withdrawn, either wholly or in part, by publication of a new guide.
No part of this publication may be reproduced, stored in a retrieval system or transmitted
in any form, including on-site for commercial purposes without written permission from the
Royal Malaysian Customs Department (RMCD). In reproducing or quoting the contents,
acknowledgment of source is required.

Disclaimer

This information is intended to provide a general understanding of the relevant treatment

under Sales Tax Legislation and aims to provide a better general understanding of
taxpayers’ tax obligations. It is not intended to comprehensively address all possible tax
issues that may arise. While RMCD has taken the initiative to ensure that all information
contained in this Guide is correct, the RMCD will not be responsible for any mistakes and
inaccuracies that may be contained, or any financial loss or other incurred by individuals
using the information from this Guide. All information is current at the time of preparation
and is subject to change when necessary.
 CONTENTS

INTRODUCTION ............................................................................................................. 1
SALES TAX CONCEPT .................................................................................................. 1
A. MANUFACTURING
SCOPE OF MANUFACTURERS .................................................................................... 1
ACTIVITIES IN MANUFACTURING ............................................................................... 2
Manufacturing .............................................................................................................. 2
Subcontract ................................................................................................................. 5
Goods Returned or Sent for Re-Processing and Repair.............................................. 7
EXEMPTION FROM REGISTRATION ............................................................................ 8
PURCHASE OF RAW MATERIALS, COMPONENTS, MACHINERY/ EQUIPMENT AND
MANUFACTURING AIDS ............................................................................................. 10
Raw materials and components ................................................................................ 10
Machinery and Equipment ......................................................................................... 11
Manufacturing Aids .................................................................................................... 12
DISPOSAL OF MACHINES, EQUIPMENT AND SPARE PARTS ................................ 14
TAXABLE PERIOD ....................................................................................................... 15
SUBMISSION OF RETURN .......................................................................................... 15
PAYMENT OF TAX ....................................................................................................... 15
ISSUANCE OF DOCUMENTS ...................................................................................... 16
RECORD KEEPING ...................................................................................................... 16
CALCULATION OF DUTY / TAX .................................................................................. 17
FACILITIES ................................................................................................................... 25
Exemption ................................................................................................................. 25
Bad Debts.................................................................................................................. 25

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 B. IMPORT AND EXPORT
IMPORT ........................................................................................................................ 26
Importation and Transportation of Goods into Principal Customs Area ..................... 26
Importation and Transportation of Goods into / from Designated Areas (DA) ........... 26
Importation and Transportation of Goods into / From Special Areas ......................... 28
Importation of Goods into Duty Free Shop (DFS) ...................................................... 34
EXPORT........................................................................................................................ 35
Direct Export .............................................................................................................. 35
Export through Third Party ........................................................................................ 36
FREQUENTLY ASKED QUESTIONS (FAQs) .............................................................. 37
Transitional GST at Standard Rate (0%) to Sales Tax .............................................. 37
Manufacturing ............................................................................................................ 38
INQUIRY ....................................................................................................................... 41
FURTHER ASSISTANCE AND INFORMATION ON SST ............................................ 41
APPENDIX .................................................................................................................... 42
Table 1: Sales Tax Treatment for Designated Areas (DA) ........................................ 42
Table 2: Sales Tax Treatment for Special Areas (Free Zone / FZ) ............................ 43
Table 3: Sales Tax Treatment for Special Areas (Licensed Warehouse / LW) .......... 44
Table 4: Sales Tax Treatment for Special Areas ....................................................... 45
Table 5: Sales Tax Treatment for Special Areas (Joint Development Area / JDA) .... 46
Table 6: Sales Tax Treatment for Duty Free Shop (DFS).......................................... 46

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INTRODUCTION

1. Effective from 1 September 2018, Sales Tax Act 2018 and the Service Tax Act
2018 together with its respective subsidiary legislations are introduced to replace the
Goods and Service (GST) Act 2014.

2. This guide is prepared to assist registered manufacturers and the industries

(excluding automotive) in understanding matters pertaining to sales tax chargeable on
goods manufactured and imported, or sales and transportation of finished goods
manufactured in accordance with the policies and legislations related to sales tax.

SALES TAX CONCEPT

3. Sales tax administered in Malaysia is a single stage tax imposed on the finished
goods manufactured in Malaysia and goods imported into Malaysia.

4. Sales tax is imposed on taxable goods manufactured in Malaysia by any

registered manufacturer at the time the goods are sold, disposed of other than by sales
or used otherwise than as a materials in the manufacture of the taxable goods.

5. Sales tax on imported goods is charged when the goods are declared, duty/ tax
paid at the time of customs clearance.

A. MANUFACTURING

SCOPE OF MANUFACTURERS

6. Manufacturers who manufacture taxable goods with sales value which exceeds
RM500,000 within the period of 12 months, are required to be registered pursuant to
Section 12 Sales Tax Act 2018.

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7. Manufacturers who manufacture taxable goods with sales value of RM500,000

and below, have the option to be registered on a voluntary basis under Section 14 of the
Sales Tax Act 2018.

8. Manufacturers who carry out its business as a subcontractor and the total labour
charge of the subcontract works exceeds RM500,000 within 12 months, are required to
be registered pursuant to Section 12 of the Sales Tax Act 2018.

ACTIVITIES IN MANUFACTURING

Manufacturing

9. As provided in Section 3 of the Sales Tax Act 2018, principles related to the
definition of manufacturing are:

(i) Manufacturing is the process of changing the organic or inorganic materials

manually or mechanically, into a new product by changing the size, shape,
composition, properties or quality of the material.

Example A: Manufacturing Process of a Guitar

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(ii) Installation of tools and components into machines or equipment, such as

the assembly of personal computer and television.

(iii) Changing the quality of the finished goods turning it into a new product,
such as hot-dip galvanizing, chroming, electroplating and subcontract work
of painting finished goods sent by another manufacturer for example
painting of motor car body kit / accessories. Manufacturer only charges
labour fee for work performed on the finished goods.

Example B: Hot-dip Galvanizing (HDG) Process

Hot-dip galvanizing (HDG) is the process of coating fabricated steel by applying a

protective zinc coating to steel or iron, to prevent rusting by immersing it in a bath
of molten zinc. There are three fundamental steps in the hot-dip galvanizing
process; surface preparation, galvanizing and inspection.

(iv) Manufacturing of petroleum products involved the refining process that

include separation, conversion, purification and blending of refinery streams
(e.g.: reformate isomerate, treated naphta) and/or petrochemical streams
(e.g. MTBE Methyl ter – butyl ether).

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Example C: Crude Oil Distillation Unit and Products

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10. Simple manufacturing process like combining two or three tools / components with
screws on a machine is not subjected to the definition of manufacture provided that:

(i) The machine is complete and there are no additional materials used in the
new installation.

(ii) Installation can be made easily and quickly.

Example: Installation of machine in a plant.

Summary:
Company has purchased machine and components to be installed in his
manufacturing plant.

Rational:
Such process of installation is not subject to manufacturing definitions
under section 3 of the Sales Tax Act 2018.

11. Taxable goods manufactured and manufacturing activities conducted in the

Designated Areas (DA) and Special Areas (SA) are not subject to sales tax as provided
under Section 49 and 56 of Sales Tax Act 2018.

Subcontract

12. Subcontractors normally do work that are given by another manufacturer. The
manufacturer supplies raw materials or semi finished goods to the subcontractor for
further work to be done to complete the goods. Registered manufacturer can apply to
appoint subcontractors by submitting an application through the MySST system.

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13. Subcontract work to another person comprises of the following:

(i) Subcontract to another registered manufacturer

Unfinished goods sent from a registered manufacturer to another registered

manufacturer to manufacture and complete. The finished goods are
subsequently acquired back by the same registered manufacturer and
subject to sales tax unless an exemption is claimed by the registered
manufacturer under item 5 Schedule C of the Sales Tax (Person Exempted
from Payment of Tax) Order 2018.

(ii) Subcontract to non-registered manufacturer

(a) Goods transported from a registered manufacturer to any non-

registered manufacturer for further work or to complete the
manufacturing process. The finished goods are later acquired back
by the same registered manufacturer and subject to sales tax unless
an exemption is claimed by the non registered manufacturer under
item 62 Schedule A of the Sales Tax (Person Exempted from
Payment of Tax) Order 2018.

(b) Semi-finished goods transported from a manufacturer in the Free

Zone (FZ) which is in Special Areas (SA), to any non-registered
manufacturer in Principal Customs Area (PCA) for further processing
or to be completed as finished goods, is as if importation of goods
into Malaysia. Any goods imported is subject to sales tax unless an
exemption is claimed by the manufacturer under item 54 Schedule A
of the Sales Tax (Person Exempted from Payment of Tax) Order
2018.

Goods returned to the manufacturer in FZ is as if such goods are

exported from Malaysia to a place outside Malaysia under paragraph

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58(1)(b) Sales Tax Act 2018 and exemption from payment of tax
can be claimed by the exporter under item 56 Schedule A of the
Sales Tax (Person Exempted from Payment of Tax) Order 2018.

(iii) Subcontract to Licensed Manufacturing Warehouse / Free Industrial Zone

Goods transported from a manufacturer in PCA to the Free Industrial Zone

(FIZ) or moved to a Licensed Manufacturing Warehouse (LMW) under
Section 65A of the Customs Act 1967 for subcontract work and
subsequently re-imported or returned via the same route to the
manufacturer in PCA, are subject to sales tax unless an exemption is
claimed by the manufacturer under item 38 Schedule A of the Sales Tax
(Person Exempted from Payment of Tax) Order 2018.

Goods Returned or Sent for Re-Processing and Repair

14. Goods imported from any country, transported from FIZ or Labuan which is in
Designated Area (DA) or moved from LMW for repair and subsequently re-exported,
transported or moved back through the same route within three (3) months, is subject to
sales tax unless an exemption is claimed by the importer under item 34 Schedule A of
the Sales Tax (Person Exempted from Payment of Tax) Order 2018.

15. Locally manufactured taxable goods, excluding petroleum, which have been
exported and subsequently re-imported within twelve (12) months from the date of export
for the purpose of reprocessing, are subject to sales tax unless an exemption is claimed
by the importer under item 35 Schedule A of the Sales Tax (Person Exempted from
Payment of Tax) Order 2018.
16. Goods exported to any country, transported to FIZ or Labuan or moved to LMW
for repair and subsequently re-imported or returned by the same route, is subject to sales
tax unless an exemption is claimed by the importer under item 36 Schedule A of the
Sales Tax (Person Exempted from Payment of Tax) Order 2018.

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EXEMPTION FROM REGISTRATION

17. Irrespective of the total sales value of taxable goods in the period of twelve (12)
months, manufacturers with manufacturing operations as below are exempted from
registration as provided under subsection 13(1) of Sales Tax Act 2018:

(i) The developing and printing of photographs and the production of film
slides;

(ii) The engraving of articles with the name of the recipient, his sports record or
other circumstances under which the article was donated or awarded;

(iii) The incorporation of goods into buildings.;

(iv) The manufacture of ready mixed concrete;

(v) The preparations of meals;

(vi) The preparation of tarred metal, tarred screenings, and hot mixed
preparations of bitumen and metal for roadmaking;

(vii) The production of copies of document by the photo copy or similar copying
process;

(viii) The repacking of bulk goods into smaller packages by a person other than
a registered manufacturer;

(ix) The repair of second hand or used goods;

(x) The testing of eyesight, the prescription of suitable lenses and the fitting of
such lenses into frames;

(xi) The following operations when performed by a person other than a

registered manufacturer:

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(a) the varnishing and or polishing of finished pieces of furniture.

(b) the fitting of glass tops and, or glass doors to pieces of furniture
otherwise complete.

(xii) The reduction of size and or changing of the shape of taxable materials
without changing the nature of such materials, provided that the sizing and,
or shaping is not part of the normal process in manufacture of a separate
article;

(xiii) The rendering of personal tailoring service but excluding the manufacturing
of garments and other textile articles on the basis of bulk and not
personalised production by a firm or company engaged in the business of
manufacturing garments and other textile articles;

(xiv) The printing of logo, knitting, crocheting or embroidering on ready made

garments supplied by another person;

(xv) The colouring of cloth supplied by another person without changing the size
or shape of the said cloth;

(xvi) The manufacture of batik fabrics using traditional techniques of manual

block printing, manual screen printing and, or hand drawing or painting and
the articles thereof;

(xvii) The installation of air conditioners in motor vehicles;

(xviii) The manufacture of jewellery and goldsmiths wares;

(xix) The extraction of gold from mineral ores; or

(xx) The recovery of gold from jewellery and, or the refining of gold.

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PURCHASE OF RAW MATERIALS, COMPONENTS, MACHINERY/ EQUIPMENT AND

MANUFACTURING AIDS

Raw materials and components

18. Sales tax exemption is given to raw materials and components used directly in the
manufacturing process of goods manufactured, from the initial stage of manufacturing
until the finished products is finally packaged and ready for export. This includes
packaging materials and casings (e.g. casings for calculators and cameras). The
exemption is given provided that it is claimed by the person entitled for the claim or the
goods are exempted from tax in the exemption order.

19. Raw materials / components which are not elegible for sales tax exemption,
such as:
(i) Fuel oil

(ii) Materials for machinery and factory cleaning purposes

(iii) Wearing apparel for workers

(iv) Furniture / office equipments

(v) Building materials

(vi) Food stuffs and drinks

20. Raw materials, components and packaging materials excluding petroleum,

imported or purchased from any registered manufacturer or LMW or Licensed
Warehouse (LW), by any registered manufacturer in PCA, are subject to sales tax unless
an exemption is claimed by the registered manufacturer under item 1 Schedule C of the
Sales Tax (Person Exempted from Payment of Tax) Order 2018.

21. Raw materials, components and packaging materials including petroleum to be

used as raw material, imported from LMW or LW or purchased from any registered

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manufacturer by any registered manufacturer of petroleum product, are subject to sales

tax unless an exemption is claimed by the registered manufacturer of petroleum products
under item 2 Schedule C of the Sales Tax (Person Exempted from Payment of Tax)
Order 2018.

22. The exemptions stated in paragraph 20 and 21 can be claimed provided that:

(i) Raw materials, components and packaging materials including petroleum

shall be used solely in the manufacturing of finished goods manufactured
by the registered manufacturer;

(ii) Registered manufacturer has to pay sales tax on the raw materials,
components and packaging materials including petroleum that could not be
accounted for.

Machinery and Equipment

23. Machinery / equipment required for manufacturing are all items necessary for the
processing of the goods manufactured starting from the initial state right up to the
finishing state where the final product is packed ready to be sold or for export.

24. All such machinery and equipment must be new and unused which includes
testing equipment, tools, quality control gadgets, labelling machines, work bench,
weighing scales, spare parts, replacement machinery / equipment, grinding stones,
pollution control equipment for industrial waste treatment, welding shields, central unit air
conditioning plant for factory use, spare parts for machinery and computers for factory
use only. Besides being imported, machinery and equipment can also be purchased from
local suppliers.

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25. Machinery / equipment not included in the above definition are forklifts,
construction / building materials, office equipment / furniture, fire-fighting equipment,
vehicles and generator.

26. Machinery and equipment imported or purchased from LMW, LW, FZ or

manufacturer approved by the DG, by any manufacturer in PCA which has been
endorsed by MIDA, is subject to sales tax unless an exemption is claimed by the
manufacturer in PCA under item 55 Schedule A of the Sales Tax (Person Exempted from
Payment of Tax) Order 2018.

27. Sales tax exemption on machinery and equipment imported or purchased by the
approved manufacturer can be claimed provided that:

(i) The machinery and equipment are new and unused and are placed at all
times at the premise of the approved manufacturer;

(ii) The machinery and equipment shall be used directly in the manufacture of
finished goods at the premise of the approved manufacturer;

(iii) All machinery and equipment which are exempted from sales tax cannot be
sold, transferred or moved from the premise of the approved manufacturer
without the permission of the DG;

(iv) The manufacturer shall pay taxes on goods that cannot be accounted for.

Manufacturing Aids

28. Manufacturing aids are any goods used in the manufacturing process to
accelerate and to further improve, complete or complement the manufacturing process of
the goods manufactured.

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29. Examples of manufacturing aids are lubricants, jigs, mould, mounting materials,
chemical cleaners and sandpaper.

30. For electronic industry sector, the sales tax exemption on the cleanroom
equipment is also considered on the basis that although the device is not used directly in
manufacturing, it is necessary to guarantee the manufacturing area is free from dust and
electrical emissions interference. Such items / equipments are:

(i) Floor panel/conductive floor tiles

(ii) Face masks

(iii) Cap made of non-woven fabric

(iv) Glass

(v) Security shoes

(vi) Finger cots

31. Besides being imported, manufacturing aids can also be purchased from LMW,
LW or FZ or another registered manufacturer by any registered manufacturer in PCA and
are subject to sales tax unless an exemption is claimed by the registered manufacturer in
PCA under item 1 Schedule C of the Sales Tax (Person Exempted from Payment of Tax)
Order 2018.

32. Importation of manufacturing aids which are subject to the Customs (Prohibition of
Imports) Order 2017, must comply with the conditions as prescribed under such Order.

33. Exemption from payment of sales tax on manufacturing aids imported or

purchased from local supplier can be obtained provided that:

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(i) That the goods shall be used solely in the manufacturing of finished goods
of any registered manufacturer.

(ii) The manufacturer shall pay taxes on goods that cannot be accounted for.

DISPOSAL OF MACHINES, EQUIPMENT AND SPARE PARTS

34. Disposal of machines, equipment and spare parts that are imported or obtained
through tax exemption under item 55 Schedule A of the Sales Tax (Person Exempted
from Payment of Tax) Order 2018 can be made through several manners such as
destruction, transfer, sale, export and free gifts.

35. If the goods to be disposed are aged less than 10 years from the date of
importation or purchase, the registered manufacturer must account for the sales tax as
provided under item 55 Schedule A of the Sales Tax (Person Exempted from Payment of
Tax) Order 2018. The registered manufacturer is to account for sales tax based on the
tax rate and value of the goods upon acquisition from his supplier as stated in the
prevailing Customs Duties Order 2017 and Sales Tax (Rate of Tax) Order 2018 for waste
or scrap.

36. If such goods are aged 10 years or more, the registered manufacturer is exempted
from paying sales tax.

37. The approval from relevant agencies should be obtained in advance if the goods
exempted from sales tax are to be destroyed and subject to regulation or control of the
agency concerned e.g. Department of Environment.

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TAXABLE PERIOD

38. Taxable period as prescribed under the provisions of Section 2 and 25 of the
Sales Tax Act 2018 is two (2) calendar months or part of the two months ending on the
last day of the second month.

SUBMISSION OF RETURN

39. As provided in Section 26 of the Sales Tax Act 2018, sales tax return shall be
submitted not later than the last day of the month following the taxable period specified.

40. Each registered manufacturer is required to submit sales tax return whether there
are any taxable goods manufactured, sold, disposed of other than sale, disposed of apart
from to be used as a material in manufacturing and whether any sales tax paid or not for
the taxable period.

PAYMENT OF TAX

41. The registered manufacturer is required to declare the sale of taxable goods in the
sales tax return in accordance with Section 26 of the Sales Tax Act 2018 and pay sales
tax due and payable not later than the last day on which the registered manufacturer is
required to furnish the return.

42. The finished goods manufactured and exported out of Malaysia by a registered
manufacturer are exempted from sales tax under item 56 Schedule A of the Sales Tax
(Person Exempted from Payment of Tax) Order 2018 and should be declared in the
Customs Form No. 2 (K2).

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ISSUANCE OF DOCUMENTS

43. The registered manufacturer is required to issue documents on matters as follows:

(i) Invoice to be issued upon sale of taxable goods, in national language

(malay language) or English language as provided under Section 21 of the
Sales Tax Act 2018.

(ii) Issuance and receipt of the credit notes or debit notes to make deduction or
addition on the sales and purchases of taxable goods as provided under
Section 23 of the Sales Tax Act 2018.

RECORD KEEPING

44. As provided under Section 24 of the Sales Tax Act 2018, every taxable person is
required to keep records on matters as follows:

(i) Record of sales of taxable goods.

(ii) Record on the importation and exportation of taxable goods.

(iii) Other records such as:

(a) Purchase invoice and returns of all raw materials and packaging
materials used in the manufacturing.

(b) Sales tax returns which are properly kept and updated.

(c) Agreement or transaction documents with the seller or buyer, for the
purpose of audit inspection.

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CALCULATION OF DUTY / TAX

45. For the calculation of sales tax on imported and locally manufactured goods, the
value of imported goods and value of goods sold should be based on the principles of
valuation set out under the Sales Tax (Determination of Sale Value of Taxable Goods)
Regulations 2018 in accordance with Section 9 of the Sales Tax Act 2018.

46. For taxable goods manufactured by a taxable person, the value of sales is
determined taking into account the value of:

(i) Goods sold by the taxable person; or

(ii) Goods manufactured by the taxable person; and

(a) Used by him other than used as materials in the manufacturing of

taxable goods; or
(b) Disposed of by him other than sale.

47. For taxable goods imported into Malaysia, the value of taxable goods for the
purpose of duty/tax payment is the sum of the following amount:

(i) The value of the taxable goods for the purpose of customs duties payment;

(ii) The amount of customs duties, if any, paid or payable on the taxable goods;
and

(iii) The amount of excise duty, if any, paid or payable on the taxable goods.

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48. Examples on calculation of duty / tax on imported goods:

(i) Importation of Dutiable Goods

(Import Duty and Sales Tax paid or to be paid, no Excise Duty)

Customs Value of Goods - RM10,000.00

Import Duty @30% - RM 3,000.00
Customs Value + Import Duty - RM13,000.00
Sales Tax @10% - RM 1,300.00

(ii) Importation of Dutiable Goods

(Import Duty, Excise Duty and Sales Tax paid or to be paid)

Customs Value of Goods - RM10,000.00

Import Duty @30% = RM 3,000.00
Customs Value + Import Duty - RM13,000.00
Excise Duty @60% = RM 7,800.00
Customs Value + Import Duty + Excise Duty - RM20,800.00
Sales Tax @10%) = RM 2,080.00

(iii) Importation of Dutiable Goods

(Import Duty Exempted and Sales Tax paid or to be paid)

Customs Value of Goods - RM10,000.00

Import Duty @30% = RM 0.00
Customs Value + Import Duty - RM10,000.00
Sales Tax @10% = RM 1,000.00

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(iv) Importation of Dutiable Goods

(Import Duty paid or to be paid, Sales Tax exempted)

Customs Value of Goods - RM10,000.00

Import Duty @30% = RM 3,000.00
Customs Value + Import Duty - RM13,000.00
Sales Tax @10% = RM 0.00

(v) Importation of Dutiable Goods under exemption e.g. Treasury

Exemption Section 14(2) Customs Act 1967 or any item under
Exemption Order
(Import Duty and Excise Duty 50% exempted, Sales Tax paid or to be
paid)
Customs Value of Goods - RM10,000.00
Import Duty @30% (Exemption 50%) = RM 1,500.00
Cusstoms Value + Import Duty - RM11,500.00
Excise Duty @60% (Exemption 50%) = RM 3,450.00

Customs Value + Import Duty + Excise Duty - RM14,950.00

Sales Tax @10% = RM 1,495.00

(vi) Importation of Dutiable Goods from Special Areas into Principal

Customs Area
(Import Duty and Sales Tax paid or to be paid)

Customs Value of Goods - RM10,000.00

Import Duty @30% = RM 3,000.00
Customs Value + Import Duty - RM13,000.00
Sales Tax @10% = RM 1,300.00

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(vii) Importation of Cigarette

(Import Duty, Excise Duty and Sales Tax paid or to be paid)

Goods - Cigarette
Tariff Code - 2402.20.9000
CIF Value of Goods - RM 100.00
Quantity - 1 box
Number of sticks in one (1) box - 20 sticks
Tax Calculation - Duty Rate x No. of
sticks
Import Duty Rate - RM 0.20 per stick
Tax Calculation - RM 0.20/stick x 20
sticks
Import Duty = RM 4.00
Excise Duty Rate - RM 0.40 per stick
Tax Calculation - RM 0.40 per stick x
20 sticks
Excise Duty = RM 8.00
Customs Value + Import Duty + Excise Duty - (RM100.00 +
RM4.00 + RM8.00)
= RM 112.00
Sales Tax @10% = RM 11.20

(viii) Importation of Tobacco

(Import Duty, Excise Duty and Sales Tax paid or to be paid)

Goods - Ang Hoon

(Tobacco)
Tariff Code - 2403.19.1100

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Quantity - 1 kg
Customs Value of Goods - RM 100.00
Import Duty Rate - 5% and RM 40.00
Tax Calculation - (RM100.00x5%)+
(RM40.00x1kg)
Import Duty = RM 45.00
Excise Duty Rate - RM 27.00 and 5%
Tax Calculation - (RM 27.00 x 1 kg) +
[(Customs Value
+Import Duty)x5%]
- RM 27.00 +
[(RM100.00+
RM45.00) x 5%]
- RM 27.00 +
(RM145.00x5%)
- RM 27.00 +
RM 7.20
Excise Duty = RM 34.25

Customs Value + Import Duty + Excise Duty - RM100.00+

RM45.00+RM34.25
- RM179.25
Sales Tax @10% = RM 17.92

(ix) Importation of Liquor (Import Duty, Excise Duty and Sales Tax paid or
to be paid)

Goods - Beer
Tariff Code - 2203.00.9900
Customs Value of Goods - RM 100.00

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Quantity - 1 can
Content - 350 ml
Alcohol content - 5.5% i / i
Import Duty Rate - RM 5.00
Import Duty = RM 5.00
Excise Duty Rate - Excise duty rate x
quantity x alcohol
content
Tax Calculation - RM 175.00 per
100% vol. per liter
x 0.35 liter x 5.5%
Excise Duty = RM 3.37
Customs Value+Import Duty+Excise Duty - (RM100.00+RM5.00
+RM3.37)
- RM108.37
Sales Tax @10% - RM10.83

49. Examples on calculation of duty / tax on locally manufactured goods:

(i) Locally Manufactured Dutiable Goods

(Sales Tax paid or to be paid, no Excise Duty)

Sales Value of Goods - RM10,000.00

Sales Tax @10% - RM10,000.00x 10%
= RM 1,000.00
(ii) Locally Manufactured Dutiable Goods
(Excise Duty and Sales Tax paid or to be paid)

Goods - Cigarette
Tariff Code - 2402.20.9000

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Open Market Value (OMV) - RM 100.00

Quantity - 1 box
Number of sticks in one box - 20 sticks
Excise Duty Rate - RM 0.40 per sticks
Tax Calculation - Duty Rate x No. of
stick
- RM 0.40 per stick
x 20 sticks
Excise Duty = RM 8.00
OMV + Excise Duty - RM 100.00 +
RM 8.00
- RM 108.00
Sales Tax @10% = RM 10.80

(iii) Locally Manufactured Dutiable Goods

(Sales Tax and Excise Duty paid or to be paid)

Goods - Ang Hoon

(Tobacco)
Tariff Code - 2403.19.1100
Quantity - 1 kg
Open Market Value (OMV) - RM 120.00
Excise Duty Rate - RM 27.00 and 5%
Tax Calculation - (RM 27.00 x 1 kg)
+ (RM 120.00 x 5%)
- RM 27.00 +
RM 6.00
Excise Duty = RM 33.00
OMV + Excise Duty - RM 120.00 +
RM 33.00

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- RM 153.00
Sales Tax @10% = RM 15.30

(iv) Locally Manufactured Dutiable Goods

(Sales Tax and Excise Duty paid or to be paid)

Goods - Beer
Tariff Code - 2203.00.9900
Open Market Value (OMV) - RM100.00
Quantity - 1 can
Content - 350 ml
Alcohol content - 5.5% i / i
Excise Duty Rate - Excise duty rate x
quantity X alcohol
content
Tax Calculation - RM 175.00 per
100% vol.per liter x
0.35 liter x 5.5%
Excise Duty - RM 3.37
OMV+Excise Duty - RM 100.00 +
RM 3.37
- RM 103.37
Sales Tax @10% = RM 10.33

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FACILITIES

Exemption

50. Registered manufacturers are eligible to enjoy various exemption given under the
Sales Tax (Goods Exempted from Tax) Order 2018 and Sales Tax (Person Exempted
from Payment of Tax) Order 2018.

51. The exemption of sales tax on goods imported or manufactured in Malaysia may
be claimed under Schedule A of the Sales Tax (Goods Exempted from Payment of Tax)
Order 2018 as set out in paragraph 2 and 3 of the same Order.

52. Schedule A of the Sales Tax (Person Exempted from Payment of Tax) Order 2018
involves the exemption from payment of tax which is granted to a specific person.

53. Schedule B of the Sales Tax (Person Exempted from Payment of Tax) Order 2018
involves the exemption from payment of tax granted to any manufacturer based on goods
manufactured by him.

54. Schedule C of the Sales Tax (Person Exempted from Payment of Tax) Order 2018
involves the exemption from payment of tax granted to any registered manufacturer or
any person acting on behalf of registered manufacturer.

• Please refer to the Sales Tax Orders and the Guide on Exemptions as
published in the Customs Portal, for further information on details of the
exemptions.

Bad Debts

55. The registered manufacturer can claim back either wholly or partly sales tax paid
to the DG provided that:

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(i) The whole or part of the sales tax has been written off as bad debts in his
account and;

(ii) The DG is satisfied that reasonable efforts have been taken to recover the
sales tax involved.

• Please refer to the the Sales Tax General Guide as published in the Customs
Portal, for further information on application for claim back of bad debts.

B. IMPORT AND EXPORT

IMPORT

Importation and Transportation of Goods into Principal Customs Area

56. Goods other than goods as listed in Sales Tax (Goods Exempted from Sales Tax)
Order 2018, imported into Principal Customs Area (PCA) are subject to sales tax.
Importation shall be declared in the Customs Form No. 1 (K1) and sales tax has to be
paid at the time of customs release.

57. Taxable goods transported from LW or LMW into PCA are to be declared in the
Customs Form No. 9 (K9).

58. Taxable goods transported from FZ into PCA are to be declared in the Customs
Form No.1 (K1).

Importation and Transportation of Goods into / from Designated Areas (DA)

59. Designated Area (DA) is an area which comprises of Labuan, Langkawi and
Tioman and is excluded from the interpretation of Malaysia specifically in Part VIII of the
Sales Tax Act 2018.

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60. Sales tax is not charged on taxable goods imported, transported or sold in the
following circumstances for DA:

(i) Taxable goods imported from a place outside Malaysia into DA are not
subject to sales tax in accordance with paragraph 50(a)(i) of the Sales Tax
Act 2018 and should be declared in Customs Form No. 1 (K1).

(ii) Taxable goods transported from Malaysia to DA is considered as if

exportation in accordance with paragraph 51(1)(b) of the Sales Tax Act
2018. The goods are not subject to sales tax as stated under paragraph
50(a)(i) of the Sales Tax Act 2018 and should be declared in Customs Form
No. 2 (K2) in Malaysia.

However, the sales tax is charged on some goods such as set out in the
Sales Tax Order (Imposition of Sales Tax in Designated Area) 2018 and
should be declared in Customs Form No. 1 (K1) upon entering the DA.

(iii) Taxable goods transported from DA to another DA are not subject to sales
tax as provided in paragraph 50(a)(ii) of the Sales Tax Act 2018 and should
be declared in Customs Form No. 8 (K8).

(iv) Taxable goods transported from DA to FZ and LW are not subject to sales
tax as provided in paragraph 50(a)(iii) of the Sales Tax Act 2018 and should
be declared in Customs Form No. 8 (K8).

(v) Taxable goods transported from DA to LMW are not subject to sales tax as
provided in paragraph 50(a)(iii) of the Sales Tax Act 2018 and should be
declared in Customs Form No. 1 (K1).

(vi) Taxable goods transported from DA to JDA are not subject to sales tax as
provided in paragraph 50(a)(iii) of the Sales Tax Act 2018 and should be
declared in Form JDA No. 1 (JDA1).

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(vii) Taxable goods transported from DA to Inland Clearance Depot (ICD) is an

importation and subject to sales tax but exempted under item 49 Schedule
A of the Sales Tax (Person Exempted from Payment of Tax) Order 2018.
Importation should be declared in Customs Form No. 8 (K8).

(viii) Taxable goods transported from DA to a place outside Malaysia is an

exportation and are not subject to sales tax. Exportation should be declared
in Customs Form No. 2 (K2) for air and sea mode while Customs Form No.
8 (K8) for road mode.

(ix) Goods transported from DA to Malaysia is considered as if it is an

importation as provided for in paragraph 51(1)(a) of the Sales Tax Act 2018
and subject to sales tax under subsection 50(b) of the Sales Tax Act 2018.
The imported goods must be declared in the Customs Form No. 1 (K1).

• Please refer to Table 1 for matrix format of the sales tax treatment for
Designated Area.

Importation and Transportation of Goods into / From Special Areas

61. Special Areas (SA) is an area which comprises of Free Zone (FZ), Licensed
Warehouse (LW), Licensed Manufacturing Warehouse (LMW) and Joint Development
Area (JDA) and is excluded from the interpretation of Malaysia specifically in Part IX of
the Sales Tax Act 2018.

62. Sales tax is not charged on taxable goods imported, transported or sold in the
following circumstances for FZ:

(i) Goods imported into FZ are not subject to sales tax as provided in
paragraph 57(a)(i) of the Sales Tax Act 2018. Importation into Free
Commercial Zone (FCZ) should be declared in ZB1 Form which is

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monitored by the Free Zone Authority under the Free Zone Act 1990, while
importation into Free Industrial Zone (FIZ) and Stulang Laut (FCZ) shall be
declared under Customs Form No. 8 (K8).

(ii) Goods transported from Malaysia to FZ is considered as if it is an

exportation in accordance with paragraph 58(1)(b) of the Sales Tax Act
2018 and are not subject to sales tax as provided in paragraph 57(a)(i) of
the Sales Tax Act 2018 and should be declared in Customs Form No. 2
(K2).

(iii) Goods transported between FZ, and FZ to LW are not subject to sales tax
as provided in paragraph 57(a)(ii) of the Sales Tax Act 2018 and should be
declared in Customs Form No. 8 (K8).

(iv) Goods transported from FZ to LMW are not subject to sales tax as provided
in paragraph 57(a)(ii) of the Sales Tax Act 2018 and should be declared in
Customs Form No. 1 (K1).

(v) Goods transported from FZ to JDA are not subject to sales tax as provided
in paragraph 57(a)(ii) of the Sales Tax Act 2018 and should be declared in
Form JDA No. 1 (JDA1).

(vi) Goods transported from FZ to DA are not subject to sales tax as provided in
paragraph 57(a)(iii) of the Sales Tax Act 2018 and should be declared in
Customs Form No. 8 (K8).

(vii) Goods transported from FZ to ICD is an importation and subject to sales tax
but exempted under item 49 Schedule A of the Sales Tax (Person
Exempted from Payment of Tax) Order 2018. The importation should be
declared in Customs Form No. 8 (K8).

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(viii) Taxable goods transported from FZ to a place outside Malaysia is an

exportation and are not subject to sales tax. The exportation from FCZ
should be declared in ZB1 form which is monitored by the Free Zone
Authority under the Free Zone Act 1990, while declaration from FIZ should
be made in Customs Form No. 8 (K8).

(ix) Goods transported from FZ to Malaysia is considered as if it is an

importation as provided in paragraph 58(1)(a) of the Sales Tax Act 2018
and sales tax is applicable under subsection 57(b) of the Sales Tax Act
2018. The importation should be declared in Customs Form No. 1 (K1).

• Please refer to Table 2 for matrix format of the sales tax treatment for Free
Zone.

63. Sales tax is not charged on taxable goods imported, transported or sold in the
following circumstances for LW:

(i) Goods imported into LW are not subject to sales tax as provided in
paragraph 57(a)(i) of the Sales Tax Act 2018 and should be declared in
Customs Form No. 8 (K8).

(ii) Goods transported from Malaysia to LW is considered as if it is an

exportation in accordance with paragraph 58(1)(b) of the Sales Tax Act
2018 and are not subject to sales tax as provided in paragraph 57(a)(i)
Sales Tax Act 2018 and should be declared in Customs Form No. 2 (K2).

(iii) Goods transported from between LW are not subject to sales tax as
provided in paragraph 57(a)(ii) of the Sales Tax Act 2018 and should be
declared in Customs Form No. 8 (K8).

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(iv) Goods transported from the LW to FZ and LMW are not subject to sales tax
as provided in paragraph 57(a)(ii) of the Sales Tax Act 2018 and should be
declared in Customs Form No. 8 (K8).

(v) Goods transported from LW to JDA are not subject to sales tax as provided
in paragraph 57(a)(ii) of the Sales Tax Act 2018 and should be declared in
Form JDA No. 1 (JDA1).

(vi) Goods transported from LW to DA are not subject to sales tax as provided
in paragraph 57(a)(iii) of the Sales Tax Act 2018 and should be declared in
Customs Form No. 8 (K8).

(vii) Goods transported from LW to ICD is an importation and subject to sales

tax but exempted under item 49 Schedule A of the Sales Tax (Person
Exempted from Payment of Tax) Order 2018 and the importation should be
declared in Customs Form No. 8 (K8).

(viii) Taxable goods transported from LW to a place outside Malaysia is an

exportation and are not subject to sales tax. The exportation should be
declared in Customs Form No. 8 (K8).

(ix) Goods transported from LW to PCA or Malaysia is considered as if

importation as provided in paragraph 58(1)(a) of the Sales Tax Act 2018
and sales tax is applicable under subsection 57(b) of the Sales Tax Act
2018. The importation should be declared in Customs Form No. 1 (K1) or
Customs Form No. 9 (K9).

• Please refer to Table 3 for matrix format of the sales tax treatment for
Licensed Warehouse.

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64. Sales tax is not charged on taxable goods imported, transported or sold in the
following circumstances for LMW:

(i) Goods imported to LMW are not subject to sales tax as provided in
paragraph 57(a)(i) of the Sales Tax Act 2018 and should be declared in
Customs Form No. 1 (K1).

(ii) Goods transported from Malaysia to LMW is considered as if it is an

exportation in accordance with paragraph 58(1)(b) of the Sales Tax Act
2018 and are not subject to sales tax as provided in paragraph 57(a)(i) of
the Sales Tax Act 2018 and should be declared in Customs Form No. 2
(K2).

(iii) Goods transported between LMW are not subject to sales tax as provided
in paragraph 57 (a)(ii) of the Sales Tax Act 2018 and should be declared in
Form GPB No. 1 (GPB1).

(iv) Goods transported from LMW to FZ are not subject to sales tax as provided
in paragraph 57(a)(ii) of the Sales Tax Act 2018 and should be declared in
Customs Form No. 2 (K2).

(v) Goods transported from LMW to LW are not subject to sales tax as
provided in paragraph 57(a)(ii) of the Sales Tax Act 2018 and should be
declared in Form GPB No. 2 (GPB2).

(vi) Goods transported from LMW to JDA are not subject to sales tax as
provided in paragraph 57(a)(ii) of the Sales Tax Act 2018 and should be
declared in Form JDA No. 1 (JDA1).

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(vii) Goods transported from LMW to DA are not subject to sales tax as
provided in paragraph 57(a)(iii) of the Sales Tax Act 2018 and should be
declared in Customs Form No. 2 (K2).

(viii) Goods transported from LMW to ICD is an importation and subject to sales
tax but exempted under item 49 Schedule A of the Sales Tax (Person
Exempted from Payment of Tax) Order 2018. The importation should be
declared in Customs Form No. 2 (K2).

(ix) Taxable goods transported from LMW to a place outside Malaysia is an

exportation and are not subject to sales tax. Exports should be declared in
Customs Form No. 2 (K2).

(x) Goods transported from LMW to Malaysia is considered as an importation

as provided in paragraph 58(1)(a) of the Sales Tax Act 2018 and sales tax
is applicable under subsection 57(b) of the Sales Tax Act 2018. The
importation should be declared in Customs Form No. 9 (K9).

• Please refer to Table 4 for matrix format of the sales tax treatment for
Licensed Manufacturing Warehouse.

65. Sales tax is not charged on taxable goods imported, transported or sold in the
following circumstances for JDA:

(i) Taxable goods imported into JDA from outside Malaysia are not subject to
sales tax as provided under paragraph 57(a)(i) of the Sales Tax Act 2018
and should be declared in Form JDA No. 1 (JDA1).

(ii) Taxable goods transported from JDA to a place outside Malaysia is an

exportation and are not subject to sales tax in accordance with item 56

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Schedule A of the Sales Tax (Person Exempted from Payment of Tax)

Order 2018. The exportation should be declared in Form JDA No. 2 (JDA2).

(iii) Taxable goods transported from Malaysia to JDA or from JDA to Malaysia
are not subject to sales tax as provided under paragraph 57(a)(i) of the
Sales Tax Act 2018 and should should be declared in Form JDA No. 3
(JDA3).

• Please refer to Table 5 for matrix format of the sales tax treatment for
Joint Development Area.

Importation of Goods into Duty Free Shop (DFS)

66. A person licensed (licensee) under Section 65D of the Customs Act 1967 to
operate a duty free shop other than in Designated Areas is exempted from the payment
of sales tax on taxable goods in the following circumstances:

(i) All types of taxable goods imported to DFS, located in PCA are subject to
sales tax unless an exemption is claimed by the licensee under item 66
Schedule A of the Sales Tax (Person Exempted from Payment of Tax)
Order 2018 and should be declared in Customs Form No. 8 (K8).

(ii) All types of taxable goods imported to DFS, located in FCZ are subject to
sales tax unless an exemption is claimed by the licensee under item 66
Schedule A of the Sales Tax (Person Exempted from Payment of Tax)
Order 2018 and should be declared in Customs Form No. 8 (K8).

(iii) All types of taxable goods transported from LW to DFS which is located in
PCA, are subject to sales tax unless an exemption is claimed by the
licensee under item 66 Schedule A of the Sales Tax (Person Exempted

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from Payment of Tax) Order 2018 and should be declared in Customs Form
No. 8 (K8).

(iv) All types of taxable goods transported from LW to DFS which is located in
the FCZ, are subject to sales tax unless an exemption is claimed by the
licensee under item 66 Schedule A of the Sales Tax (Person Exempted
from Payment of Tax) Order 2018 and should be declared in Customs Form
No. 8 (K8).

(v) Transportation of liquor, cigarettes and tobacco products manufactured in

Malaysia, from LW to DFS which is located in DA, are subject to sales tax
unless an exemption is claimed by the licensee under item 67 Schedule A
of the Sales Tax (Person Exempted from Payment of Tax) Order 2018 and
should be declared in Excise Form No. 8 (E8).

(vi) Transportation of liquor, cigarettes and tobacco products manufactured in

Malaysia, from the Free Commercial Zone (FCZ) to DFS which is located in
DA, are subject to sales tax unless an exemption is claimed by the licensee
under item 68 Schedule A of the Sales Tax (Person Exempted from
Payment of Tax) Order 2018 and should be declared in Excise Form No. 8
(E8).

• Please refer to Table 6 for matrix format of the sales tax treatment for
Duty Free Shop.

EXPORT

Direct Export

67. Taxable goods exported by a registered manufacturer, are exempted from

payment of sales tax based on item 56 Schedule A of the Sales Tax (Person Exempted

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from Payment of Tax) Order 2018 provided that the exportation is declared in the
Customs Form No. 2 (K2).

68. Taxable goods which are exported are not subject to sales tax.

69. Sales of taxable goods involving the exportation to a place outside Malaysia:

(i) Taxable goods transported from Malaysia to a place outside Malaysia is

considered as an exportation and are not subject to sales tax. The
exportation should be declared in Customs Form No. 2 (K2).

(ii) Taxable goods transported from ICD to a place outside Malaysia is

considered as an exportation and are not subject to sales tax. The
exportation should be declared in the Customs Form No. 8 (K8).

Export through Third Party

70. Any person approved by the DG to purchase locally manufactured goods for
export purposes, is exempted from paying sales tax under item 57 Schedule A of the
Sales Tax (Person Exempted from Payment of Tax) Order 2018 provided that:

(i) Goods are purchased from a registered manufacturer.

(ii) Finished goods must be exported within six (6) months from the date of
purchase.

(iii) Finished goods cannot be sold or disposed of in Malaysia except with the
approval of the DG and after the relevant tax payment is made.

(iv) Records should be updated and may be checked by Customs officers at

any time.

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(v) Sales tax must be paid on goods that could not be accounted for.

(vi) If the finished goods are not exported within six (6) months from the date of
purchase, taxes incurred must be paid.

FREQUENTLY ASKED QUESTIONS (FAQs)

Transitional GST at Standard Rate (0%) to Sales Tax

1. Q : Does the provision of special schemes under GST Act 2018 such as
ATS, ATMS, and margin scheme applies in the sales tax regime?
A : Such schemes under GST will not be applicable under sales tax regime.

2. Q : Noris Sdn Bhd has issued an invoice on 22 August 2018 and received
full payment on 25 August 2018. However, the goods were only
removed to the buyer on 4 September 2018. What is the tax
treatment?
A : Noris Sdn Bhd shall charge GST at standard rate 0%.

3. Q : VD Manufacture Sdn Bhd performed subcontract work from 15

August 2018 until 15 October 2018. However, part of the work was
done in GST era and the balance of work to be completed in the Sales
Tax era. What is the tax treatment on the subcontract work?
A : VD Manufacture Sdn Bhd shall charge GST at standard rate of 0% on the
part of work performed until 31 August 2018. Meanwhile, the balance of the
work completed on 15 October 2018 shall be charged with sales tax at
10%.

4. Q : What is the tax treatment for importation of Big Ticket Items for
upstream petroleum activities?

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A : Big Ticket Items under GST regime will be included in the petroleum
upstream Master Exemption List (MEL) and the importer of such items that
is petroleum upstream operator will be given an exemption from sales tax
subject to prescribed conditions as stated in the Sales Tax (Person
Exempted from Payment of Tax) Order 2018.

Manufacturing

5. Q : KG Sdn Bhd provides a subcontract work to its customer on 18

August 2018. However, KG Sdn Bhd only issued an invoice on 1
September 2018. What is the tax treatment on the subcontract work
performed?
A : KG Sdn Bhd shall charge GST at standard rate of 0% on the value of the
subcontract work performed to its customer on 18 August 2018.

6. Q : Tank Technicals (M) Sdn Bhd has issued an invoice on the repair job
provided to its customer on 24 August 2018. However, the repair job
was only performed on 16 September 2018. What is the tax treatment
on the work performed?
A : Tank Technicals (M) Sdn Bhd shall charge sales tax 10% on the value of
the work performed on 16 September 2018.

7. Q : EM Packaging (M) Sdn Bhd has issued an invoice on 23 August 2018.

However, the subcontract work had been performed started on 23
August 2018 until 04 October 2018. What is the tax treatment on the
subcontract work performed?
A : EM Packaging (M) Sdn Bhd shall charge GST at standard rate 0% for the
value of work performed until 31 August 2018. Meanwhile, sales tax shall
be charged on the value of the subcontract work performed from 1
September 2018 until 4 October 2018.

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8. Q : I am a registered manufacturer and have a canteen provided for our

employees at the factory. However, the company is not the operator
or the owner of the canteen. What is the tax treatment on the
operation of the canteen?

A : The operator of the canteen is liable to be registered if his sales value

exceeds RM1,500,000.

9. Q : If I am a registered manufacturer and provides management service /

shared services, what is the tax treatment for the services
performed?
A : Preparations of all types of management services and other charges
related to the preparation including management or project coordination is
subject to service tax as stated under Group G First Schedule of the
Service Tax Regulations 2018.

Q Registered manufacturer provides consultancy / design / engineering

10.
services. What is the tax treatment for the services performed by the
registered manufacturer?

A : Preparation of consultancy / design / engineering services and other

services related to it is subject to service tax as stated under Group G First
Schedule of the Service Tax Regulations 2018.

11. Q : Registered manufacturer provides repair, testing services and also

research and development (R&D) services. What is the tax treatment
for the services performed by the registered manufacturer?

A : Services such as repair, testing, or research and development services is

not part of the prescribed services under the Service Tax Act 2018.
Therefore, the services are not subject to service tax.

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12. Q : Transportation charged by the manufacturer to his customer on

delivery of goods.
A : Transportation service on delivery of goods by the manufacturer to his
customer is not part of the prescribed services under the Service Tax Act
2018. Therefore, the service is not subject service tax.

13. Q : Customs declaration on importation and exportation charged by the

customs agent to the manufacturer.
A : If the customs declaration performed by an operator whose principal is in
the Special Areas i.e. warehouse, the customs declaration is not subject to
service tax. However, if the operator’s principal is located in the PCA thus
the customs declaration is subject to service tax.

14. Q : Warehouse rental or storage charged by the warehouse operator to

the manufacturer.
A : The warehouse rental or storage charged by the warehouse operator to the
manufacturer is not part of the prescribed services under the Service Tax
Act 2018. Therefore, the service is not subject to service tax.

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INQUIRY

For any inquiries for this guide please contact:

Internal Tax Division

Royal Malaysian Customs Department
Level 3 - 7, Block A, Menara Tulus,
No. 22, Persiaran Perdana, Presint 3,
62100 Putrajaya.

FURTHER ASSISTANCE AND INFORMATION ON SST

Further information on can be obtained from :

(i) SST website : https://mysst.customs.gov.my

(ii) Customs Call Center:

• Tel : 03-7806 7200 / 1-300-888-500
• Fax : 03-7806 7599
• Email: [email protected]

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APPENDIX

Table 1: Sales Tax Treatment for Designated Areas (DA)

TRANSPORTED TRANSPORTED TYPE OF SALES TAX

NO.
FROM TO FORM TREATMENT

Overseas / Place Designated Areas No sales tax

1. K1
Outside Malaysia (DA) Section 50(a)(i)

Malaysia / Principal Designated Areas No sales tax

2. K2
Customs Area (PCA) (DA) Section 50(a)(i)

No sales tax
Designated Areas Designated Areas
3. K8 Section
(DA) (DA)
50(a)(ii)
No sales tax
Designated Areas Special Areas
4. K8 Section
(DA) (Free Zone / FZ)
50(a)(iii)
Special Areas No sales tax
Designated Areas
5. (Licensed K8 Section
(DA)
Warehouse / LW) 50(a)(iii)
Special Areas
No sales tax
Designated Areas (Licensed
6. K1 Section
(DA) Manufacturing
50(a)(iii)
Warehouse / LMW)
Special Areas (Joint No sales tax
Designated Areas
7. Development Area / JDA1 Section
(DA)
JDA) 50(a)(iii)
Inland Clearance
Designated Areas Exemption
8. Depot K8
(DA) Item 49
(ICD)

Designated Areas Overseas / Place K2 (air / sea mode) Exemption

9.
(DA) Outside Malaysia K8 (road mode) Item 56
Sales tax
Designated Areas Malaysia / Principal chargeable
10. K1
(DA) Customs Area (PCA) (Import)
Section 50(b)

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Table 2: Sales Tax Treatment for Special Areas (Free Zone / FZ)

TRANSPORTED TRANSPORTED TYPE OF SALES TAX

NO.
FROM TO FORM TREATMENT

FCZ : ZB1
Overseas / Place Special Areas No sales tax
1. import
Outside Malaysia (Free Zone / FZ) Section 57(a)(i)
FIZ : K8

Malaysia / Principal Special Areas No sales tax

2. K2
Customs Area (PCA) (Free Zone / FZ) Section 57(a)(i)

Special Areas Special Areas No sales tax

3. K8
(Free Zone / FZ) (Free Zone / FZ) Section 57(a)(ii)
Special Areas
Special Areas No sales tax
4. (Licensed Warehouse / K8
(Free Zone / FZ) Section 57(a)(ii)
LW)
Special Areas
Special Areas (Licensed No sales tax
5. K1
(Free Zone / FZ) Manufacturing Section 57(a)(ii)
Warehouse / LMW)
Special Areas (Joint
Special Areas No sales tax
6. Development Area / JDA1
(Free Zone / FZ) Section 57(a)(ii)
JDA)

Special Areas Designated Areas No sales tax

7. K8
(Free Zone / FZ) (DA) Section 57(a)(iii)

Special Areas Inland Clearance Depot Exemption

8. K8
(Free Zone / FZ) (ICD) Item 49
FCZ : ZB1
Special Areas Overseas / Place Exemption
9. export
(Free Zone / FZ) Outside Malaysia Item 56
FIZ : K8
Sales tax
Special Areas Malaysia / Principal chargeable
10. K1
(Free Zone / FZ) Customs Area (PCA) (Import)
Section 57(b)

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Table 3: Sales Tax Treatment for Special Areas (Licensed Warehouse / LW)

TRANSPORTED TRANSPORTED TYPE OF SALES TAX

NO.
FROM TO FORM TREATMENT

Special Areas
Overseas / Place No sales tax
1. (Licensed Warehouse K8
Outside Malaysia Section 57(a)(i)
/ LW)
Special Areas
Malaysia / Principal No sales tax
2. (Licensed Warehouse K2
Customs Area (PCA) Section 57(a)(i)
/ LW)
Special Areas Special Areas
No sales tax
3. (Licensed Warehouse (Licensed Warehouse K8
Section 57(a)(ii)
/ LW) / LW)
Special Areas
Special Areas No sales tax
4. (Licensed Warehouse K8
(Free Zone / FZ) Section 57(a)(ii)
/ LW)
Special Areas
Special Areas
(Licensed No sales tax
5. (Licensed Warehouse K8
Manufacturing Section 57(a)(ii)
/ LW)
Warehouse / LMW)
Special Areas Special Areas (Joint
No sales tax
6. (Licensed Warehouse Development Area / JDA1
Section 57(a)(ii)
/ LW) JDA)
Special Areas
Designated Areas No sales tax
7. (Licensed Warehouse K8
(DA) Section 57(a)(iii)
/ LW)
Special Areas Inland Clearance
Exemption
8. (Licensed Warehouse Depot K8
Item 49
/ LW) (ICD)
Special Areas
Overseas / Place Exemption
9. (Licensed Warehouse K8
Outside Malaysia Item 56
/ LW)
Special Areas Sales tax chargeable
Malaysia / Principal
10. (Licensed Warehouse K1 / K9 (Import)
Customs Area (PCA)
/ LW) Section 57(b)

All Rights Reserved © 2018 Royal Malaysian Customs Department 44

 Guide On Manufacturing and Import / Export
As at 23 August 2018

Table 4: Sales Tax Treatment for Special Areas

(Licensed Manufacturing Warehouse / LMW)

TRANSPORTED TRANSPORTED TYPE OF SALES TAX

NO.
FROM TO FORM TREATMENT
Special Areas
Overseas / Place (Licensed No sales tax
1. K1
Outside Malaysia Manufacturing Section 57(a)(i)
Warehouse / LMW)
Special Areas
Invoice &
Malaysia / Principal (Licensed No sales tax
2. Delivery
Customs Area (PCA) Manufacturing Section 57(a)(i)
Order
Warehouse / LMW)
Special Areas Special Areas
(Licensed (Licensed No sales tax
3. GPB1
Manufacturing Manufacturing Section 57(a)(ii)
Warehouse / LMW) Warehouse / LMW)
Special Areas
(Licensed Special Areas No sales tax
4. K2
Manufacturing (Free Zone / FZ) Section 57(a)(ii)
Warehouse / LMW)
Special Areas
Special Areas
(Licensed No sales tax
5. (Licensed Warehouse GPB2
Manufacturing Section 57(a)(ii)
/ LW)
Warehouse / LMW)
Special Areas
Special Areas (Joint
(Licensed No sales tax
6. Development Area / JDA1
Manufacturing Section 57(a)(ii)
JDA)
Warehouse / LMW)
Special Areas
(Licensed Designated Areas No sales tax
7. K2
Manufacturing (DA) Section 57(a)(iii)
Warehouse / LMW)
Special Areas
Inland Clearance
(Licensed Exemption
8. Depot K2
Manufacturing Item 49
(ICD)
Warehouse / LMW)
Special Areas
(Licensed Overseas / Place Exemption
9. K2
Manufacturing Outside Malaysia Item 56
Warehouse / LMW)
Special Areas
Sales tax chargeable
(Licensed Malaysia / Principal
10. K9 (Import)
Manufacturing Customs Area (PCA)
Section 57(b)
Warehouse / LMW)

All Rights Reserved © 2018 Royal Malaysian Customs Department 45

 Guide On Manufacturing and Import / Export
As at 23 August 2018

Table 5: Sales Tax Treatment for Special Areas (Joint Development Area / JDA)

TRANSPORTED TRANSPORTED TYPE OF SALES TAX

NO.
FROM TO FORM TREATMENT

Special Areas (Joint

Overseas / Place No sales tax
1. Development Area / JDA1
Outside Malaysia Section 57(a)(i)
JDA)
Special Areas (Joint
Malaysia / Principal No sales tax
2. Development Area / JDA3
Customs Area (PCA) Section 57(a)(i)
JDA)
Special Areas (Joint
Overseas / Place Exemption
3. Development Area / JDA2
Outside Malaysia Item 56
JDA)
Special Areas (Joint
Malaysia / Principal No Sales tax
4. Development Area / JDA3
Customs Area (PCA) Section 57(b)
JDA)

Table 6: Sales Tax Treatment for Duty Free Shop (DFS)

• Taxable Goods
• Liquor and Tobacco Products

TRANSPORTED TYPE OF SALES TAX

NO. TRANSPORTED FROM
TO FORM TREATMENT
TAXABLE GOODS
Overseas / Place
Duty Free Shop Exemption
1. Outside Malaysia K8
(DFS) in PCA Item 66
Overseas / Place
Duty Free Shop Exemption
2. Outside Malaysia K8
(DFS) in FCZ Item 66
Special Areas
Duty Free Shop Exemption
3. (Licensed K8
(DFS) in PCA Item 66
Warehouse / LW)
Special Areas
Duty Free Shop Exemption
4. (Licensed K8
(DFS) in FCZ Item 66
Warehouse / LW)
LIQUOR AND TOBACCO PRODUCTS
Special Areas
Duty Free Shop Exemption
5. (Licensed K8
(DFS) in DA Item 67
Warehouse / LW)
Special Areas Duty Free Shop
Exemption
6. (Free Commercial (DFS) in DA K8
Item 68
Zone / FCZ)

All Rights Reserved © 2018 Royal Malaysian Customs Department 46