In preparing for this new tax regime, Sarawak Energy Berhad and its group of companies (“SEB Group”) strives to be ready and in compliant with the GST legislation. Hence, our GST system will be designed so that you will be paid in accordance with the new GST regime. As you are the vendor / supplier in respect of goods and services for SEB Group, we would like to highlight some basic GST information to assist you to prepare for the transition to the GST regime as we move forward.
The Malaysian Government will implement the Goods and Services Tax (“GST”) at the rate of 6%, replacing the existing sales tax and service tax effective 1 April 2015. GST is a multi-stage tax imposed on domestic consumption. It is charged on all taxable supplies of goods and services in Malaysia, including imported goods and services except those specifically zero-rated or exempted. Payment of tax is made in stages by the intermediaries 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 consumers. Therefore, the tax itself is not a cost to the intermediaries.
(1) BUSINESS REGISTRATION
(a) Mandatory & Voluntary Registration
Vendors / suppliers who make taxable supplies at the annual turnover exceeding RM500,000 are liable for mandatory registration. However, vendors / suppliers who do not exceed the threshold of RM500,000 can elect for voluntary registration. The voluntary registration is subject to further approval by the Director General of Royal Malaysian Customs Department (“RMCD”). The GST registration with RMCD is open from 1 June 2014 onwards.
You may visit the RMCD’s website at www.gst.customs.gov.my for more details on the GST registration process and to ensure you are aware of the responsibilities and obligations as a registrant under GST.
(b) GST Registration Number
Once you have registered, you will receive an approval letter from RMCD which informs you of your GST registration number and effective date of GST registration. The GST registration number allocated to you must be specified in all tax invoices and debit / credit notes that you address to us.
In the future, if you have deregistered and received confirmation from RMCD on the cancellation, please promptly inform us and provide the necessary documentary evidence. This will allow us to change your business entity status in our database from “GST registered” to “Non-GST registered”.
When you are deregistered, you cannot charge output tax on your supplies made to us and you are not required to issue a tax invoice or debit / credit note showing GST.
(2) TAX INVOICE
Vendors / suppliers who are GST registered must provide a tax invoice to us (as soon as when goods or services have been delivered or rendered). Tax invoices will also be required to be issued for any advance payments to be made. The tax invoice can be either a full tax invoice or a simplified tax invoice (for total value of the taxable supplies of RM500 and less) but both must be in a format required by RMCD. Please refer to Appendix I and II for samples of both tax invoices as provided in the GST Guide on Tax Invoice and Records Keeping (as at 20 July 2014) issued by the RMCD.
The GST registration number specified in all tax invoices must be the same as the GST registration number that you have provided to us (please refer to the attached questionnaire).
(3) DEBIT NOTE AND CREDIT NOTE
Debit notes and credit notes in the format required by RMCD must be issued if there are further adjustments to the price and / or the value of GST payable in a previously issued tax invoice. Please refer to Appendix III and IV for sample of debit / credit notes as provided in the GST Guide on Tax Invoice and Records Keeping (as at 20 July 2014) issued by the RMCD.
The GST registration number specified in all debit and credit notes must be the same as the GST registration number that you have provided to us.
Under the GST regime, sales tax and service tax will be repealed. Hence, no sales tax or service tax should be charged on supplies made to us by you. Following that, any cost reduction or saving should be passed on by you to us as a result of the abolishment of sales tax and service tax for supplies made under the existing and new contracts with us that straddle 1 April 2015.
For more information on GST, you may visit the RMCD’s website at www.gst.customs.gov.my
Appendix I - Example of Full Tax Invoice (Wholly Taxable Supply)
Appendix II - Example of Simplified Tax Invoice (Wholly Taxable Supply)
Appendix III - Example of Debit Note
Appendix IV - Example of Credit Note