Key Facts about GST Malaysia

1. GST will be implemented from April 1, 2015
2. GST will replace Sales Tax and Service Tax
3. GST will be imposed on all Goods and Services supplied in the country or imported
4. The GST Standard Rate will be 6%, payable upon consumption..
5. Basic goods and necessities will be charged GST at 0% (zero rated items) 
6. There are other items which are exempted from GST.
7. Supplies made by the Federal and State Government departments are not included in the scope of GST except for services determined by Minister of Finance
8. Supplies related to regulatory activities and enforcement by local authorities and statutory bodies are not included in the scope of GST
9. GST is imposed on all goods and services at all stages of production, manufacturing, wholesale and retail activities
10. The tax that is imposed on all business inputs such as raw materials and capital assets is called Input Tax
11. The GST that is charged on all supplies (sales) is called Output Tax.
12. GST Registered business can fully claim the deduction for the Input tax that they pay upon consumption.
13. The input tax is fully claimable from the Government by a mechanism called input tax credits (which is an offset against the output tax collected, before remitting the net balance)
14. Mandatory registration for companies with turnover of more than Rm500,000 per year.
15. Voluntary registration allowed for companies whose turnover is less than Rm500,000 per year.
16. GST registration opened in June 2014
17. Last date to register for GST is December 31, 2014
18. GST is not a tax on the business.  Instead, GST is a tax on the consumer who consumes goods and services supplied by the registered business.

Why you need to plan for GST for your business

1. GST will be a new tax in Malaysia, and the administration is different from Sales Tax or Services Tax.
2. For most Malaysians,  it will be the first time they have to transact in a GST environment.
3. Mistakes are bound to happen due to ignorance on the GST regulations, and limited resources to administer the GST collection and payment process
4. Strict penalties if you submit incorrect GST amounts
5. Although GST is not a business cost, the amount of GST to collect is based on the sales value.  The amount of GST paid is calculated based on Purchase of raw Material and Capital assets, and other business expenses. 
6. Proper record keeping is important for accurate tax declarations
7. The more transactions your business generates, the more difficult it is to keep track of all transactions manually
8. It is very important to invest in a computerised accounting software or upgrade your accounting software  to be able to capture the transaction records accurately and on a timely basis
9. GST affects every business, whether or not you are compulsorily required to register for GST.    You have to select the right type of software for manage GST more efficiently.

Responsibilities and obligations as a registered GST supplier

As a registered GST supplier, you will have to

1. account for GST collected on taxable supplies made and collected
2. submit GST return and pay tax by due date
3. issue tax invoice on taxable supply made
4. keep adequate records of business transactions relating to GST