Dear Valued Clients,
GST is upon us and there are some significant updates at the eleventh hour. Kindly spend some times and go through the following summaries as they may be significant to certain industries.
(1) Special Refund of Sales Tax on Goods Held-In-Hand
Previous: The Customs required that for local purchases, special refund can only be claimed if the full amount had been paid.
Revised: Panel Decision 2/2015 has declared that the rule has been relaxed, and the special refund can be claimed as long as amounts outstanding are fully paid before 30 May 2015.
You may access Panel Decision 2/ 2015 here.
Alternatively, you may also refer to our revised guide to sales tax refund by clicking the image to the right.
(2) IMPORTANT: Panel Decision 1/ 2015 (Amendment)
The following summaries are provided for your reference, you may access Panel Decision 1/ 2015 (Amendment) here.
(A) Bad debt relief
Previous: The Customs had indicated previously that if bad debt relief is not claimed immediately after the expiry of sixth month, businesses are required to write in in future periods as they intend to make the claim.
Revised: In Panel Decision 1/ 2015 (Amendment), the Customs has stated that “if bad debt relief is not claimed immediately after the expiry of sixth month, the taxable person has to notified the Director General (DG) within 5 days after the expiry of sixth month on his intention to claim at a later date.“.
In our opinion, this is a very puzzling amendment as it means that a company has outstanding balances that are not recoverable after 6 months, they will have to write in IMMEDIATELY within 5 days to state their intention to claim at a later date; a highly impractical requirement to say the least!
(B) Translating local sales in foreign currency
For translation of local sales in foreign currency to ringgit, more sources and basis of exchange rates have been allowed. For more details, please read Panel Decision 1/2015 (Amendment).
(C) Input tax credit on passenger motor car
More types of situation where input tax on passenger car can be claimed have been stated in the Amendment but which is still very limited.
(D) Lists of zero-rated medicines and milk
In latest news “The Star”, the list of zero-rated medicines has been expanded from 2,500 to 4,215 types.
It has also been reported that milk for infants up to 36 months will be zero-rated.
(3) Residential Stratified Property
It is reported that maintenance and sinking fund fees for all types of residential building with strata titles will be exempt from GST. If so, it still leaves doubt for service fesss collected under JMB (strata title yet to be obtained) and service fees collected by societies for neighborhoods on whether GST is chargeable.
We are still awaiting amendments to the Law to confirm on the technical accuracy.
Please take note and we encourage reading of the source material for detailed information.