Goods and services tax (GST)

Disclaimer : This entry is for my own reference only. I don't take responsibilities for any incurring events with regards of this entry from now on.

• GST
• Jenis barangan
• Kebaikan GST

At first, I don't understand what GST is. Apa bezanya dengan SST (Sales and Service Tax) yang ada sekarang? Forgive me for being ignorance tapi GST is everywhere now (2014) and I guess it's the time for me to look thoroughly what it is all about. Actually the first ever interview I've been after finishing my final paper in uni is with Ernst & Young as GST consutant back in 2010. No wonder why I did not make it in the second round as I have no idea what is it hahahaha... Whatever. It is good to know that the industry player is getting ready for this moment wayyyyyy back then.

GST

GST falls under indirect tax atau cukai tidak langsung. Registration deadlines for businesses with income more than RM500,000 is at 31st December 2014. The actual implementation is on 1st April 2015. However, for business which has turnover of less than RM500,000 have the voluntary option to register.

Failed to register can cause fine ranging from RM1,500 to RM 20,000 with effect after the date of official implementation of GST.

Those who register are eligible to charge GST to their customer, however, those who did not register have no other option but to absorb GST as consumer.

I can say that SST is single stage tax whereas GST is actually a multi stage taxation, with every level included such as manufacturers, wholesalers, retailers and consumers

Types of supply

1. Standard rate supply (6%)
2. Zero rated supply - not collect GST on supplies but entitled to claim credit tax input used in the course of furtherance of business.
3. Exempt supplies - not collect GST. Not eligible to claim tax credit on input
4. Supplies not within the scope of GST - eg. service provided by government, sales incurred from a place outside Malaysia

The keywords to understand here is kredit cukai input atau input tax credit. I am too lazy to demonstrate in graphic but lets just say, for instance, a wholesaler (W) who is registered for GST bought its supplies from manufacturer (M) (also register for GST) for a value of RM 100,000. Therefore, in M's invoice stated that W have to bear GST of 6% (RM 6,000).

After that, W sold its supplies to retailer (R) for a total invoice value of RM150,000. That means, R have to bear GST of 6% as well (RM9,000). W is eligible for input tax credit of RM6,000 for supplies bought from M, which means the GST remit is RM 3,000 by wholesaler instead of RM6,000 (RM9,000 - RM6,000). Got it?

I can conclude that, in GST tax is fairly distributed all the way until it reaches the final stage in the chain which is the consumer. 

Kebaikan GST

By implementing GST, it will lower business cost, enhance global competitiveness, enhance compliance, reduce red tape, fair pricing, greater transparency.

It is obviously not me, myself making up all these points. When I understand GST, I know all the above is very logic. Why? Should I elaborate more? Hahahaha... 

1. Lower business cost. Remember that I point out about kredit cukai input? Yea, thanks u got the idea.
2. Enhance global competitiveness. Trading outside Malaysia tak diimpose GST. Adalah cukai lain tapi later lah ya..
3. Enhance compliance. I think so as semua companies yang nak charge GST are required to register.. Where?? Di Custom Dept. of course. Can use manual post, TAP system (Tax payer access point) or walk in je.
4. Reduce red tape. Secara automatiknya ya.. Maybe tapi mungkin awal-awal mesti ada juga karenah.
5. Fair pricing. Yes, because tax is distributed fairly along the chain.
6. Greater transparency. Sebab of course company nak claim input tax credit, so have to disclose invoice kat kastam lah or whatever way they disclose so that they will be eligible for that. Kalau SST ada jer mamak charge ok. Tanpa register ke Kastam whatsoever so pendapatan negara tu sedikit sebanyak terbocor sebab sebagai pengguna do u really know yang mamak tu ada bayar ke SST to kastam? Atau dia charge other income je for SST yang dia kutip tu. Tapi GST, hopefully senarai company yang register akan boleh disemak dengan cepat lah so that peniaga tak sesuka hati charge GST even tak register.