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Excise Duty on Sugar Sweetened Beverages – Updates

On 7 March 2019, the Director General of the Royal Malaysian Customs Department (“RMCD”) announced to the media (Bilangan 1-3/2019) that the implementation of Excise Duty (RM0.40/ litre) on sugary drinks in the form of ready to drink package that was proposed during the 2019 National Budget by the Honourable Minster of Finance will now be postponed to 1 July 2019 (instead of 1 April 2019).

In addition, the Media Release also states that the Government has agreed to increase the dutiable threshold to 7g/ 100 ml from 5g/ 100ml for flavoured milk based drinks that contain lactose classifiable under tariff code Heading 22.02, except soya milk drinks.

At present, there are eight (8) tariff codes in total under the Heading of 22.02 in the Duties Order, amongst others, including the two (2) lines below with Terms of Subheading as:-

§  Flavoured UHT milk based drinks (2202.99.1000)

  • Soya milk drinks (2202.99.2000)

It is uncertain at this state whether additional tariff codes with specific Terms of Subheadings will be introduced, or will the total number of tariff lines remains the same at eight (8) but existing Terms of Subheadings to be revised or reorganized to achieve the desired objective of the Government.

Producers and importers of beverages classifiable under Headings 22.02 and 20.09, in particular the former, are therefore encouraged to monitor closely development in this regard in the coming roadshows that will be conducted by RMCD nationwide.  

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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