The following are not classified as a supply in GST and NO GST should be charged on these supplies:

• Transfer of a going concern
• Contributions to Pension, provident or social security fund
• Supplies by societies, etc, where:
  ⊗ Supply is made to members and is available without payment other than the membership subsription and the value of the supply is nominal, OR
  ⊗ Supply to a donor or sponsor which does not have commercial value
• Insurance indemnity settlement
• Diplomatic and consular services
• Supply of goods where the goods have been excluded from input tax credit under Section 38(12)

Supply in GST includes all forms of supply, including supply of imported services, done for a consideration and anything which is not a supply of goods but is done for a consideration is a supply of services.

Consideration is anything (in money or in kind) received in exchange for something else.

A supply arises where consideration is received and it is for something that is done.

Zero-Rated Supply means goods and services sold by the companies are free from Goods and Services Tax (GST). No GST will be charged on these goods & services.

For company and business, GST paid on the assets, purchases or expenses for their businesses can be claimed as Input Tax Credit.

Even though the persons who are running the businesses under the list of Zero-Rated Supply do not have annual sales of more than RM500,000, they are still eligible to register with Customs Department and to claim back the GST they paid.

List of Zero-Rated Supply

1. Agricultural products – paddy, fresh or chilled vegetables, certain provisionally preserved vegetables
2. Essential foodstuff – oils, salt, flour, etc
3. Livestocks and livestock supplies or poultry – live animals and unprocessed meat
4. Eggs
5. Fish – live, fresh, frozen and dried
6. First 200 units of electricity for domestic use
7. Water for dosmestic users
8. Goods supplied to designated areas from Malaysia – Labuan, Langkawi & Tioman
9. Exported goods
10. Exported services – for example, archiecture services in connection with land outside Malaysia
11. Services in Malaysia – for example, pilotage, salvage or towage services
12. International services – for example, transport of passengers or goods from a place in Malaysia to a place outside Malaysia

For full list of Zero-Rated Goods & Services, please download here: P.U. (A) 272 – Goods and Services Tax(Zero Rated Supplies) 

The GST paid by the following persons are not aligible for any Input Tax Credit:

• Non-registered company or business
• Company or Business making Exempt Supply
• Expenses incurred for non-business use
• Expenses which have been classified as Blocked Items

Businesses That Can Not Claim Input Tax Credit

1. Financial Services
2. Public Transport Services
3. Private Education Services
4. Tolled Highways or Bridges
5. Childcare Services
6. Funeral, Burial and Cremation Services
7. Private Healthcare Services
8. Supplies Made by Societies
9. Residential Land or Building
10. Agriculture or General Use Land
11. Businesses with annual sales not more than RM500,000

Consideration includes any payment made or to be made, whether in money or otherwise, or any act or forbearance, whether or not voluntary, for the supply of goods or services, whether by the person or by any other person.

Types of Consideration

1. Monetary consideration – payment by cash, cheque or credit card, bank transfer and deduction from bank account.
2. Non-monetary consideration – goods or services provided as payment

Payments Not Treated as Consideration

• There is no direct link between the payment and the supply
• There is no supply of goods or services in return for the payment
• Fines and Penalty charges – unless the fine is imposed in fulfilment of terms of an agreement
• Grants
• Monetary Donation
• Sponsorship payment where sponsor does not receive any identifiable benefits in return
• Project Funding – for example, co-sponsoring a research project – funds contributed are dependent on cost of project rather than for commercial benefit

Deposit

Deposit is not part of the Consideration for the supply if it does not form part of the payment for the supply.

The following are few types of deposits:

• Forfeiture Deposit – not consideration for any supply – effectively amounts to a compensation payment for damages due to non performance of the contract or for breach of contract.
• Security Deposit – not consideration as this is merely for a security. For example, for safe return of goods on hire or loan – hence not consideration for a supply
• Return Deposit – not consideration – not part of payment but a return of money to the customer due to cancellation of the contract between the supplier and customer

[ezcol_1third]1.  TYPE of supply[/ezcol_1third]

[ezcol_2third_end]
Are my outputs taxable?

• Standard-rated
• Zero-rated
• Exempt
• Out-of-scope
• Deemed supply

Is my input tax recoverable?

[/ezcol_2third_end]

[ezcol_1third]2.  PLACE of supply[/ezcol_1third]

[ezcol_2third_end]Is my supply made in Malaysia?[/ezcol_2third_end]

[ezcol_1third]3.  TIME of supply[/ezcol_1third]

[ezcol_2third_end]

When do I account for GST?

• 21 days rule

[/ezcol_2third_end]

[ezcol_1third]4.  VALUE of supply[/ezcol_1third]

[ezcol_2third_end]At what value should I charge GST?[/ezcol_2third_end]