Outlined below are findings since the implementation of
GST in Malaysia on 1 April 2015, serving as a reminder to all GST
The Malaysian Goods and Services Tax (GST) was originally due to
be implemented in 2011, however, it did not come into effect until
1 April 2015. Now a year in, the Royal Malaysian Customs Department
(RMCD) has released related information.
The total collection from 1 April to 31 December 2015 was RM27.012 billion, with the estimated
collection for the 2016 financial year increasing to RM39
The GST rate will remain unchanged at 6%, with no plans to alter
it. Meanwhile, developments have been announced to help strengthen
the GST legislation, promote accuracy in submission and encourage
timely payments, including:
Penalties associated with late
payment of GST
Definition of when a taxable person
is considered to be holding a tax invoice.
From 1 January 2016 onwards, there will be penalties for
organisations with late payment of GST. According to the RMCD, the
penalty rate increases with 30 day increments,
resulting in the following:
A 5% penalty rate for GST that is
between 1 and 30 days overdue
A 15% penalty rate for GST that is
between 31 and 60 days overdue
A 25% penalty rate for GST that is
over 60 days overdue.
When does 6 Years Rule start?
It is important to understand GST requirements, especially when
claiming input tax.
For example, when a taxable individual is considered to hold a
tax invoice. This is the earlier of either: the date that the tax
invoice was posted into the company's accounts payable, or a
year from the date the individual holds the tax invoice.
If a taxable individual has not claimed back their input tax in
the taxable period, the Director General may allow the
individual to make a claim within six years from the date of supply to the
person in question.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Constitution Amendment Bill for Goods and Services Tax (GST) has been approved by The President of India and the GST council have decided to enforce GST from 1st July 2017.
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