Implementation of Sales Tax and Service Tax (SST) – 11th Update

Head Office, KL

Further to FMM circular CD/10/2019 on implementatio nof Sales Tax and Service Tax (SST), new updates following SST Technical Committee chaired by YBhg Dato’ Seri Paddy bin Abd Halim, Director General of Customs Department on November 29, 2019 are:

Goods Returned for Reprocessing – The current timeframe to claim for sales tax exemption for goods returned for reprocessing and re-exported is three (3)months. Customs Department has agreed subject to conditions in Schedule A, item 35 (e), Sales Tax (Person Exempted from Payment of Tax) Order 2018 to allow the industry to apply for extension of this period from the Director-General;
Exemption of Sales Tax on Pallets – Pallets used as packaging materials qualify for exemption under Item 1 or Item 3 of Schedule C,Sales Tax (Person Exempted from Payment of Tax) Order 2018; However pallets used in transportation (for local sales or export) cannot qualify for exemption as Customs indicated that the pallets maybe reusable; and
GST Input Tax Refunds - The Customs Department highlighted that as at November 18, 2019 the Government has yet to reimburse RM9.39 billion in GST input tax refund to respective companies and individuals. The Customs Department is implementing the following strategies to refund companies:

Outstanding Refund (per taxable period)	Reimbursement Strategy
< RM50,000	Customs will make full refund Companies can still be subject to audits by Customs within a 6 year period
≥ RM50,000 up to < RM100,000 with multiple GST returns	80% refund 20% retained with Customs Only site visit or sample audit will be made Retained sum released after site visit or sample audit
≥ RM50,000 up to < RM100,000 with single GST return	Payment will be held until site visit
≥ RM100,000 with multiple GST returns	70% refund 30% retained with Customs Site visit or field audit will be made Retained sum released after site visit or field audit
≥ RM100,000 with single GST return	Payment will be held until audit completed OR Customs will refund 100% BUT Company provides bank guarantee of 30% of outstanding refund to Customs first Site visit or field audit will be made Retained sum released after site visit or field audit
≥ RM100,000 with single GST return

To assist member companies to better understand about SST, FMM is organising SST seminar: One Year in Review on January 9, 2020 atHilton Hotel Petaling Jaya. Please click on the link below for registration details (Registration Deadline: January 2, 2019). https://old.fmm.org.my/events_details.aspx?eventID=ac0ec5d7-2d3b-4051-bf85-330b251f7251

Enquiries: Ms Tan Ai Joo, FMM at Tel: 03-62867320, Fax:03-62741266/7288 or [email protected]