GST SEMINAR MALAYSIA AUTOMOTIVE INSTITUTE (MAI) Date : 19th. June 2014 Place: Hotel Ixora Seberang Prai Penang BUSINESS PREPARATION
GST SEMINARMALAYSIA
AUTOMOTIVE INSTITUTE (MAI)
Date : 19th. June 2014
Place: Hotel Ixora
Seberang Prai
Penang
BUSINESS PREPARATION
Briefing Agenda
1. Supplies Spanning
GST
2. Non Reviewable
Contract
3. Registration
4. Special Refund
5. Business Preparation
for GST2
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Meaning of supply spanning GST
payment or invoice before appointed date and supply takes place on and
after appointed date e.g. sales of goods, airline tickets and cinema
General Rule
any supply before appointed date not subject to GST
any supply on or after appointed date subject to GST
Exception to the general rule
supply of warranty
provision of services where service tax has been charged
provision of goods where sales tax has been charged
non reviewable contracts
Supplies Spanning GST
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Supplies Spanning GST
AD – 1st. April, 2015
(Appointed Date)
General Rule:
No tax (GST) on:-
a. Supply of goods,
b. Supply of services
c. Importation of goods
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Supplies Spanning GST
AD – 1st. April, 2015
(Appointed Date)
1st. scenario:
Deemed:-
Invoice issued or payment
received on AD
Invoice issued
Payment received
Goods supplied
Services performed
Value of supply
[GST inclusive]
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Supplies Spanning GST
2nd. scenario:
No GST chargeable on the
supply of goods or services
made on or after AD
Licensees under Sales and
Service Tax Act
AD – 1st. April, 2015
(Appointed Date)Invoice issued
Payment received
Goods supplied
Services performed
Licensees is a taxable person
under GST Tax Act
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Non reviewable contract
written long term contract with no provision
to review consideration for the supply until
a review opportunity arises
AND
24 months before the date of GST
implementation { 1st. April, 2015 }
Non Reviewable Contract
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Meaning of review opportunity
Opportunity for supplier either by himself or
with agreement to –
change the consideration because of the
imposition of GST
conduct a review after AD , renegotiation or
alteration of consideration, or
conduct a review before AD, renegotiation or
alteration of the consideration
Non Reviewable Contract
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Zero rate supply (charged with GST at 0%) for 5
years after appointed date or when a review
opportunity arises whichever is the earlier if
both supplier and recipient are registered persons;
supply is a taxable supply; and
the recipient of the supply is entitled to claim input
tax on that supply
After 5 years period, revert to either standard
rate or zero rate
Non Reviewable Contract
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AD – 1st. April, 2015
(Appointed Date)
5 years after AD31st. March, 2020
Review
Opportunity
Non Reviewable Contract
Review
Opportunity
Zero rate supply for 5 years after appointed date or
when a review opportunity arises whichever is the
earlier
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Registration
Registration effective on or
from the appointed date
AD – 1st. April, 2015
(Appointed Date)
3 months before
Registration
application
Registration during the transitional period:-
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Entitle to special refund of Sales tax (100%) if
claimant is registered (mandatory) person
hold goods on appointed date for making
taxable supply
goods are subject to sales tax
hold relevant invoices or import document to
show sales tax has been paid
Special Refund
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Goods not eligible for special refund
capital goods e.g. building and land
goods used partially or incorporated into other goods e.g. raw
materials, work in progress
goods for hire e.g. cars, generators
goods not for business e.g. personal use
goods not for sale or exchange e.g. containers, pellets, stationeries,
moulds, manufacturing aids
goods entitled to drawback
goods allowed sales tax deduction under Section 31A Sales Tax Act
1972 (credit system)
Special Refund
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Manner to claim special refund
claim within 6 months from appointed date
for special refund < RM10,000 require audit certificate signed by a
chartered accountant
for special refund ≥ RM10,000 require audit certificate signed by
an approved company auditor
use special form to claim refund (online only)
to be given in eight (8) equal installments over a period of two (2)
years
to account as output tax if special refund is claimed and goods are
returned
Special Refund
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Reduce special refund to 20% (20% method)
purchase goods from non licensed
manufacturers
goods are subject to sales tax
holds invoices which does not show sales tax
has been charged
claimant is a registered (mandatory) person
hold goods on appointed date for making
taxable goods
Special Refund
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20% method
reduce the actual purchase price by 80% for
goods held on hand on appointed date
Special refund = actual price x 20% x sales tax rate
Example:
Holds RM10,000 of raw materials on appointed date
Special refund = RM10,000 x 20% x 10%
= RM200
Special Refund
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Establishing GST committee
Modification to accounting system
Preparing bills and invoices
Utilising GST Portal
GST Forms
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WHAT BUSINESS SHOULD DO
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ESTABLISHING GST COMMITTEE
To implement a GST compliant system
GST
Project
Team
Initiate
impact
study
Pre GST and
dry run
1st phase 2nd phase 3rd phase
Make changes to
system processes
and staff training
Key areas requiring attention
Tax
regulatory
compliance
Documentation
and system
Legal and
transitional
issues
Education
and training
Vendor and
supplier
communication
Apr 2014 -- June 2014
(3 months)
July 2014 -- Jan 2015
(7 months)
Feb 2015 -- Mar 2015
(2 months)
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DEPARTMENT ACTION TO BE TAKEN
Finance,
Administration and
Legal
Cash flow impact and cash optimisation
Compliance cost and budgeting
Review legal contracts and documents
Maximise claim for input tax
Claim special refund
Monitor bad debts
Get the correct appropriate registration
Apply for special schemes
Cancel sales tax and service tax licence
Marketing and Sales Effect on prices
Tax invoice
Credit terms
Purchasing Supplier selection
Document for input tax claim
IT Accounting system
Corporate Strategy Optimise business model
Optimise corporate structure
Staff Staff training
GST Project Team
MAPPING TRANSACTIONS
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BUSINESSES’ PREPARATION
GST Implication on Prices
identify existing suppliers
talk to small suppliers to get them registered
review procurement policy to avoid tax cascading
negotiate prices with suppliers to pass on savings
review sales price
pass on savings
absorption of GST
Price Control and Anti Profiteering Act 2011
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GST Implication on Stock Management
monitor business stocks
purchase strikes and lulls
procurement policy
registration and deregistration
special refund
physical stock take on hand
documents to support refund
audit certificate
BUSINESSES’ PREPARATION
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GST Implication on Cash Flow
need to analyze cash flow impact
cash recover from customer before GST is due
assess the need to provide for one time fund to
cater for GST payment upfront
review credit terms to customers
review requirement to apply for special schemes
BUSINESSES’ PREPARATION
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GST Implication on Bad Debts
ensure a proper matching of GST payment to
government and payment received from
customers
monitor payment from customers
understand evidence of ‘reasonable efforts’
BUSINESSES’ PREPARATION
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GST Implication on Invoicing
identify whether standard rate, exempt, zero rate
or out of scope supply
issuance of full and simplified tax invoice
requirement not to issue tax invoice for imported
services and second hand goods under margin
scheme
21 days rule
self billed invoice
BUSINESSES’ PREPARATION
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GST Implication on Output Tax
gifts > RM500 subject to GST
commercial samples in a form not ordinarily
available for sale to the public not subject to GST
deemed supply e.g, private use and disposal of
business assets subject to GST
supplies to connected persons
BUSINESSES’ PREPARATION
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GST Implication on Input Tax
blocked inputs not claimable
incidental financial supplies
claim > tax amount more than RM30 to be supported
by full tax invoice
De Minimis rule
BUSINESSES’ PREPARATION
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GST Implication on Contracts
avoid long term contract without legal review
absorption of GST
pricing strategy to pass on savings
GST Implication on Human Resource
enhance staff understanding of GST
avoid unnecessary mistakes
false information may open to audit case
review policy on employee benefits
BUSINESSES’ PREPARATION
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GST Implication on System
review system and processes
perform complete mapping of transactions to identify
required changes
GST liability on every transaction
use of online submissions to the Customs
computerized system
ready made software
upgrading present system
BUSINESSES’ PREPARATION
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GST PORTAL
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FORMS NO. TITLE
GST-01 Application for Goods and Services Tax Registration
GST-02
GST-02A
GST-02B
Application for group / Joint ventures registration
Group Member/ Venturer registration
Notice of change of representative member/ venture operator and
removal of group member/ venturer
GST-03 Goods and Services Tax Return
GST-04 Goods and Services Tax Declaration by person other than taxable
person
GST-04A Auction/ sale in satisfaction of debt details for GST registered
principal
GAZETTED FORMS
GST FORMS
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GST -01
Name of form :
Application for goods and
services tax registration.
Application to be a GST
registered person
Type of registration:
Normal
Single taxable person
Single entity
Branch / division
GST FORMS
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GST-03
Name of form : Goods and
services tax return.
Document Identification No:
generated by the system
if GST-03 is submitted
electronically.
Given by officer in charge
if GST-03 is submitted
manually.
GST FORMS
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FORMS
NO.
TITLE
GST- A Registration / Inclusion / Removal / Update of Director /Owner/ Partner /
Principal Office Bearer / Capital Market Services Representative/ Authorized
Person
GST- B Registration of Branch or Division
GST- C Registration / Inclusion / Update of Sole Proprietorship Entity
GST- D Details of Overseas Principal
NON-GAZETTED FORMS
GST FORMS
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FORMS NO. TITLE
GST- Adm1 Application for Approved Trader Scheme/Approved Toll Manufacturer
Scheme / Approved Jeweller Scheme
GST-Adm1A Details of Finished Goods / Services Supplied Under Approved Trader
Scheme/Approved Toll Manufacturer Scheme / Approved Jeweller
Scheme
GST-Adm1B Details of Raw Material / Components / Accessories and Machine
Imported Under Approved Trader Scheme
GST-Adm1C Details of Principal and Value Added Activities under Approved Toll
Manufacturer Scheme
GST-Adm1C(i) Local Customer Details and Undertaking under Approved Toll
Manufacturer Scheme
GST- Adm1C(ii) Raw Material / Components Details under Approved Toll Manufacturer
Scheme
ADMINISTRATIVE FORMS
GST FORMS
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FORMS NO. TITLE
GST- Adm1D Details of New Application / Additional Supplier of Local Precious
Metal Approved Jeweller Scheme
GST-Adm2 Application for Flat Rate Scheme/Margin Scheme/Self-Billed
Invoice/Tourist Refund Scheme
GST-Adm2A
GST-Adm2B
Supplier Details of and Undertaking Under Self-Billed Invoice
Branch / Outlet Details under Tourist Refund Scheme (TRS)
GST-Adm3 Application for Goods and Services Tax Registration Exemption
GST-Adm4 Application for Cancellation of Goods and Services Tax Registration /
Special Scheme
GST- Adm5 Application for Review
GST- Adm6 Installment Application Form
ADMINISTRATIVE FORMS
GST FORMS
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FORMS NO. TITLE
GST- Adv1
GST- Adv1-1
GST- Adv1-2
GST- Adv2-1
Application for an Advance Ruling
Application for Extension of time to submit additional documents/
information
Withdrawal of Advance Ruling Application
Application for Withdrawal of Issued Advance Ruling
GST-Adv3 Application for Extension of Advance Ruling
ADMINISTRATIVE FORMS
GST FORMS
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Wish List
Implementation problems are minimized
Public accept GST implementation
Minimum impact on prices of goods and services
Both business community and Government are
well -prepared to implement GST
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Ketua Setiausaha,
Perbendaharaan Malaysia
Pejabat Pelaksanaan GST
Komplek Kementerian Kewangan,
No.5, Persiaran Perdana,
Pusat Pentadbiran Kerajaan Persekutuan Malaysia,
62596 PUTRAJAYA.
Tel : 03-88823000
GST PORTAL
www.gst.customs.gov.my
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Customs Call Centre (CCC)Tel: 03- 78067200
Fax: 03- 78067599
Email: [email protected]
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INQUIRY
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Royal Malaysian CustomsMinistry of Finance
Malaysia
Thank you