Goods and Services Tax (GST) will be charged on any supply of goods or services if it is:
- A taxable supply;
- Made in Malaysia;
- Made by a taxable person; and
- In the course of furtherance of any business
In addition to the above, GST will also be charged on the following:
- Imported goods
- Imported servces
Meaning of supply
Supply in GST includes all forms of supply, including supply of imported services, for a consideration and anything which is not a supply of goods but is provided for a consideration is a supply of services.
A supply is concluded when goods has been delivered or services has been provided in return for a consideration. Consideration is defined as anything, whether in money or in kind, received in exchange of something else.
Deemed supply has happened when the supply of goods or services has resulted in NO Consideration is received.
There are 4 types of supply in GST system.
- Standard-rated supplies are taxable supplies of goods and services which are subject to GST at standard rate.
- A taxable person who is registered under GST has to collect GST on the supply and is eligible to claim input tax credit on his business inputs in making taxable supplies.
- Zero-rated supplies are taxable supplies of goods and services which are subject to GST at zero percent rate.
- In this respect, businesses do not collect any GST on their supplies but are entitled to claim credit on inputs used in the course or furtherance of the business.
Do you know?
1. Free gift with value more than RM500 is Deemed Supply, you need to pay GST.
2. Land & property are Goods and rental of properties are Services.
- Exempt supplies are supplies of goods or services which are not subject to GST.
- In this context, businesses do not collect any GST on their supplies and are not entitled to claim credit on his business inputs.
Supplies not within the scope of GST
- Supplies which do not fall within the charging provision of the GST Act include non-business transactions, sale of goods from a place outside Malaysia to another place outside Malaysia as well as services provided by the Government sector.