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Amendment to the Sales Tax (Persons Exempted from Payment of Tax) Order 2018

The Sales Tax (Persons Exempted from Payment of Tax) (Amendment) (No 3) Order 2021 has been gazetted and comes into operation on 6 August 2021

Please click on the above header link for a copy of the said Amendment Order at the official portal of the Federal Legislation.

The amendments are in respect of Item 3 of Schedule B, and include (amongst others):-

Goods exempted

  • Substituted HS Code 0403.90.90 60 with 0403.90.90 90
  • Included HS Code 2202.99.10 00

Conditions

  • Expanded to cover goods transported from a licensed warehouse under section 65 of the Customs Act 1967, a licensed manufacturing warehouse under section 65A of the Customs Act 1967 or a free zone established under the Free Zone Act 1990
  • Emphasized that the goods shall be used directly and solely for the manufacture of milk products falling under the respective HS Codes
  • Included ‘Any other conditions as the Director General may deem fit to impose’

Certificate to be signed by

  • Replaced with ‘The manufacturer approved by the Director General’

With this amendment to the exemption, it is important for manufacturers of the exempted milk products to immediately assess whether the goods manufactured will be impacted.  Where relevant, quick actions need to be taken to either update the exemptions applied or to be applied

Updated Service Tax Guides

The Royal Malaysian Customs Department has issued the following updated Service Tax Guides as at 4 August 2021 (available in Malay language only):

  • General Guide on Service Tax
  • Guide on Group C: Night Clubs, Dance Halls, Cabarets, Health and Wellness Centres, Massage Parlours, Public Houses and Beer Houses; Group D: Private Club; Group E: Golf Club and Golf Driving Range
  • Guide on Transmission and Distribution of Electricity Services
  • Guide on Management Services

Please click on the above header link for copies of the Guides at the MySST portal.

Amongst others, we wish to highlight a notable update in the Guide on Management Services, as follows:

  • In the previous Guide on Management Services (as at 15 January 2021), Example 5A states that Service Tax would be applicable on the maintenance management services which is charged separately from rental, even though the building owner appears to be maintaining its own assets.  You may refer to our Tax Whiz dated 18 January 2021 for more details.
  • In this updated Guide on Management Services (as at 4 August 2021), Example 5A has been amended to state that maintenance management fees charged by the building owner for services rendered on common areas are not subject to Service Tax.  However, maintenance management services provided on tenanted areas would be subject to Service Tax.

The above is a change in the Service Tax treatment and businesses (particularly property owners) should assess whether this would impact their current treatment.  If Service Tax has been charged previously on common areas, businesses should consider whether any adjustments need to be made.  For other asset owners, note that there are other examples in the Guide that would be relevant.

Our highlights are intended to provide a general overview of the key proposed tax changes and should not be used or relied upon as a substitute for detailed advice or as a basis for formulating business decisions.

Should you have any questions or require further clarification, please do not hesitate to email or contact any of our Executive Directors, Directors, Associate Directors or Managers whom you are accustomed to dealing with or who are responsible for the tax affairs of your organization.

Ng Sue Lynn

Executive Director
- Indirect Tax Practice

Dato’ Tan Sim Kiat

Advisor 
- Indirect Tax Practice

Yap Choon Ling

Director
- Indirect Tax Practice