Overview of 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.

GST will be based on consumption. What the income tax does not capture, the GST will capture it! GST is tax on what is spent and not on what is earned.


Simple facts of GST

  • Annouced in 2014 Budget by Prime Minister
  • Implementation date: 1 April 2015
  • Standard GST Rate: 6%
  • GST registration threshold: RM500,000
  • GST Bill 2014 passed by the Senate on 5 May 2014
  • GST BIll 2014 passed by the Parliament on 7 May 2014


GST to add on supplies & services

Payment of tax is made in stages by the intermediaries (companies & businesses) 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 (companies & businesses) and does not appear as an expense item in their financial accounts.

Registered person

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 (GST) 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.