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DR 37/2009
Goods And Services Tax Bill 2009
An act to provide for the imposition and collection of goods and services tax and for matters connected therewith.
ENACTED by the Parliament of Malaysia as follows:
PART I
PRELIMINARY
1. Short title and commencement
(1) This act may be cited as the Goods and services Tax Act 2009.
(2) This act comes into operation on a date to be appointed by the Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different parts or different provisions of this act.
2.Interpretation
in this act, unless the context otherwise requires—
"this act" includes any subsidiary legislation made under this act;
"consideration" in relation to the supply of goods or services to any person, includes any payment made or to be made, whether in money or otherwise, or any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of goods or services, whether by the person or by any other person:
Provided that a deposit, whether refundable or not, given in respect of the supply of goods or services shall not be considered as payment made for the supply unless the supplier applies the deposit as consideration for the supply;
"goods" means any kind of movable and immovable property but excludes money except—
(a) a bank note or coin before it becomes legal tender in Malaysia or in any other country; or
(b) a collector’s piece, investment article or item of numismatic interest;
"tax" means goods and services tax;
"input tax" means—
(a) any tax on any taxable supply of goods or services to a taxable person; and
(b) any tax paid or to be paid by a taxable person on any importation of goods,
and the goods or services are used or are to be used for the purposes of any business carried on or to be carried on by the taxable person:
Provided that where the goods or services are used or are to be used partly for the purposes of any business carried on or to be carried on by the taxable person and partly for other purposes, tax on the supply and importation shall be apportioned so that only so much as is attributable to the purposes of his business is counted as his input tax;
"output tax" means any tax on any taxable supply of goods or services made by a taxable person in the course or furtherance of his business in Malaysia;
"prescribed" means prescribed by regulations made under this act;
"document" has the meaning assigned to it in section 3 of the evidence act 1950 [Act 56];
"excise duty" has the meaning assigned to it in section 2 of the excise act 1976 [Act 176];
"customs duty" has the meaning assigned to it in section 2 of the customs act 1967 [Act 235];
"electronic" has the meaning assigned to it in section 5 of the electronic Government activities act 2007 [Act 680];
"import" has the meaning assigned to it in section 2 of the customs act 1967;
"invoice" includes any document similar to an invoice;
"tax invoice" means an invoice required to be issued by a taxable person under section 33;
"excise control" has the meaning assigned to it in section 2 of the excise act 1976;
"customs control" has the meaning assigned to it in section 2 of the customs act 1967;
"designated area" means Labuan, Langkawi or Tioman;
"director General" means the director General of customs and excise appointed under section 3 of the customs act 1967;
"computer" has the meaning assigned to it in section 2 of the computer crimes act 1997 [Act 563];
"Labuan" means the island of Labuan and its dependent islands, namely, rusukan Besar, rusukan Kecil, Keraman, Burong, Papan and Daat;
"Langkawi" means the island of Langkawi and all adjacent islands lying nearer to the island of Langkawi than to the mainland;
"Malaysia" means the territories of the Federation of Malaysia, the territorial waters of Malaysia and the sea-bed and subsoil of the territorial waters, and includes any area extending beyond the limits of the territorial waters of Malaysia, and the sea-bed and subsoil of any such area, which has been or may hereafter be designated under the laws of Malaysia as an area over which Malaysia has sovereign rights for the purposes of exploring and exploiting the natural resources, whether living or non-living;
"Minister" means the Minister charged with the responsibility for finance;
"electronic notice" means any document transmitted by the registered user by way of electronic service;
"registered person" means a person who is registered under Part IV;
"taxable person" means any person who is or is liable to be registered under this act;
"officer of goods and services tax" means any officer of customs acting in the fulfilment of his duties under this act, whether the duties are assigned to him specially or generally, or expressly or by implication;
"senior officer of goods and services tax" means—
(a) any senior officer of customs as defined in section 2 of the customs act 1967; or
(b) any officer of goods and services tax conferred with the powers of a senior officer of goods and services tax under section 5;
"officer of customs" has the meaning assigned to it in section 2 of the customs act 1967;
"supply" has the meaning assigned to it in section 4;
"taxable supply" means a supply of goods or services, other than an exempt supply but includes a zero-rated supply;
"zero-rated supply" means a zero-rated supply under section 17;
"exempt supply" means an exempt supply determined under section 18;
"owner"—
(a) in respect of goods, includes any person being or holding himself out to be the owner, or person in possession of, or beneficially interested in, or having any control of, or power of disposition over, the goods;
(b) in respect of a vessel, includes any person acting as an agent for the owner of the vessel or who receives freight or other charges payable in respect of the vessel;
"conveyance" includes any vessel, train, vehicle, aircraft or any other means of transport by which persons or goods can be carried;
"services" means anything done or to be done including the granting, assignment or surrender of any right or the making available of any facility or advantage but excludes supply of goods or money;
"imported services" means any services by a supplier who belongs in a country other than Malaysia or who carries on business outside Malaysia, to a recipient who belongs in Malaysia, and the services are consumed in Malaysia;
"electronic service" means the service provided by the director General to the registered user under section 170;
"arrangement" means any agreement, contract, plan, understanding, scheme, trust, grant, covenant, disposition or transaction and includes all steps by which it is carried into effect;
"business" has the meaning assigned to it in section 3;
"surcharge" in respect of any default in payment of any instalment, means the charge accrued under subsection 52(3);
"flat rate addition" means the prescribed flat rate addition under section 75;
"appointed date" means the date appointed by the Minister by notification in the Gazette for the coming into operation of section 9 and Parts xvi and xvii;
"usual place of residence" means—
(a) in relation to a body corporate, the place where it is incorporated or otherwise legally constituted;
(b) in relation to an unincorporated body of persons, the place where the body has its centre of administration;
(c) in relation to an individual, the place where he usually resides;
"taxable period" means any category of taxable period as may be assigned by the director General to each taxable person under section 40;
"Tioman" means the Island of Tioman and the islands of Soyak, Rengis, Tumok, Tulai, Chebeh, Labas, Sepoi and Jahat;
"money" includes currencies whether of Malaysia or any other country.
3. Meaning of "business"
(1) in this act, "business" includes any trade, commerce, profession, vocation or any other similar activity, whether or not it is for a pecuniary profit.
(2) Without prejudice to the generality of anything else in this act, the following are deemed to be the carrying on of a business:
(a) the provision by a club, association, society, management corporation, joint management body or organisation (for a subscription or other consideration) of the facilities or advantages available to its members or parcel proprietors, as the case may be; and
(b) the admission, for a consideration, of persons to any premises.
(3) anything done in connection with the termination or intended termination of a business is treated as being done in the course or furtherance of that business.
(4) subject to the second schedule, the disposition of any business as a going concern, or of its assets or liabilities (whether or not in connection with its reorganisation or winding-up), is a supply made in the course or furtherance of the business.
(5) Where any person, in carrying on any trade, commerce, profession, vocation or any other similar activity accepts any office, any services supplied by the person as the holder of the office shall be treated as supplied in the course or furtherance of that trade, commerce, profession, vocation or any other similar activity.
4. Meaning of "supply"
(1) subject to subsections (2) and (3), "supply" means all forms of supply, including supply of imported services, done for a consideration and anything which is not a supply of goods but is done for a consideration is a supply of services.
(2) Matters to be treated as a supply of goods or a supply of services shall be as specified in the First schedule.
(3) Matters to be treated as neither a supply of goods nor a supply of services shall be as specified in the second schedule.
(4) The Minister may, by order published in the Gazette, amend the First schedule and second schedule.
(5) any order made under subsection (4) shall be laid before the Dewan Rakyat.
PART II
ADMINISTRATION
5. Direct or General and other officers and their responsibilities
(1) The director General shall have the superintendence of all matters relating to goods and services tax, subject to the direction and control of the Minister.
(2) subject to the general direction and supervision of the director General, an officer of customs holding the rank of superintendent or any rank higher than the rank of superintendent shall have and exercise all powers conferred on the director General under this act other than those conferred by sections 8, 63, 77, 78, 176 and 177.
(3) any person other than an officer of customs may be appointed by or employed with the concurrence of the director General for any duty or service relating to goods and services tax and the person shall be deemed to be an officer of goods and services tax.
(4) The director General may, by authorisation in writing, confer on any officer not being a senior officer of goods and services tax all or any of the powers of a senior officer of goods and services tax for a period not exceeding ninety days in respect of any one authorisation.
(5) any officer of goods and services tax shall have all the duties and powers to enforce and ensure due compliance with the provisions of this act.
6. Recognition of office
(1) every officer of goods and services tax when discharging his duties shall, on demand made by any person, declare his office and produce to the person the authority card or badge prescribed under section 8A of the customs act 1967 or in the case of any officer of goods and services tax not being an officer of customs, any other authority card as may be approved by the director General.
(2) it shall not be an offence for any person to refuse to comply with any request, demand or order made by any officer of goods and services tax acting or purporting to act under this act if the officer refuses to declare his office and produce his authority card or badge on demand being made by the person.
(3) any person, not being an officer of goods and services tax, who unlawfully wears, uses, possesses or displays, otherwise than in the course of a stage play or other theatrical performance, any authority card or badge referred to in subsection (1), commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
7. Officers to be public servants
All officers of goods and services tax shall be deemed to be public servants within the meaning of the Penal code [Act 574].
8. Confidentiality of information
(1) every person, having any official duty or being appointed or employed under this act, shall regard and deal with all documents, information, returns or declarations relating to the business, value of the supply of goods or services of any taxable person or value of imported goods as confidential.
(2) subject to subsection (4), every person having possession or control over any document, information, return or declaration or copies thereof in relation to the business or the value of the supply of goods or services of any taxable person or value of imported goods, who at any time, otherwise than for the purposes of this act or with the express authority of the director General—
(a) communicates or attempts to communicate the information or anything contained in the document, return or declaration or copies thereof to any person; or
(b) suffers or permits any person to have access to any information or to anything contained in the document, return or declaration or copies thereof, commits an offence.
(3) no person having any official duty or being appointed or employed under this act or who is referred to in subsection (4) shall be required to produce in any matters or proceedings in any court or tribunal any document, information, return or declaration or to divulge or communicate in the matters or proceedings, any matter or thing, coming under his notice in the performance of his duties under this act, except as may be necessary for the purpose of carrying into effect the provisions of this act or in order to institute a prosecution or in the course of a prosecution for any offence committed under this act.
(4) The director General may, as he deems fit, transmit or communicate any document, information, return or declaration referred to in subsection (1) or anything contained therein, to the director General of inland revenue or the chief statistician which may be required in the performance of his official duty.
(5) notwithstanding subsection (4), the Minister may, as he deems fit, allow the director General to transmit or communicate any document, information, return or declaration referred to in subsection (1) or anything contained therein to any other person.
PART III
IMPOSITION AND SCOPE OF TAX
9. Imposition and scope of goods and services tax
(1) a tax to be known as goods and services tax, shall be charged and levied on—
(a) any supply of goods or services made in Malaysia, including anything treated as a supply under this act; and
(b) any importation of goods into Malaysia.
(2) Tax shall be charged on any supply of goods or services made in Malaysia where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him.
(3) Tax chargeable on any supply of goods or services is a liability of the person making the supply and subject to Part v, becomes due and payable at the time of supply.
(4) Tax on any importation of goods into Malaysia shall be charged, levied and payable as if it were a customs duty or excise duty and as if the imported goods are dutiable and liable to customs duty or excise duty.
(5) For the purposes of this act, "supply of goods or services made in Malaysia" shall be treated as goods or services supplied in Malaysia.
10. Rate of tax
(1) Tax shall be charged and levied at the rate fixed under this section on the supply of goods or services or on the importation of goods by reference to the value of the supply or importation as determined under this act.
(2) The Minister may, by order published in the Gazette—
(a) fix the rate of tax to be charged on the supply of goods or services or on the importation of goods; and
(b) vary or amend the rate of tax fixed under paragraph (a).
(3) any order made under subsection (2) shall, at the next meeting of the dewan rakyat, be laid on the table of the dewan rakyat and shall, at the expiration of one hundred and twenty days of being so laid or of such extended period as the dewan rakyat may by resolution direct, cease to have effect if and insofar as it is not confirmed by resolution passed by the Dewan Rakyat within the said one hundred and twenty days or, if such period has been extended, within such extended period.
(4) Where an order ceases to have effect in whole or in part as provided in subsection (3), any tax charged and levied in pursuance of the order, as the case may be, of such part thereof as ceases to have effect shall, subject to subsections (5) and (6), be refundable to the persons by whom the tax was paid.
(5) Unless the Minister otherwise directs, no tax refundable under subsection (4) shall be refunded, unless the person by whom the tax was paid makes a claim in writing to the director General within one year from the date on which the order ceases to have effect in whole or in part and the claim shall contain such particulars as the director General may require.
(6) The director General may reduce or disallow any tax refundable under subsection (4) to the extent that the refund would unjustly enrich the person by whom the tax was paid.
11. Time of supply
(1) This section shall apply in determining the time of supply of goods or services for the purposes of the charge to tax except as otherwise provided in this act.
(2) subject to subsections (4), (5), (6) and (7), the time of supply of goods shall be—
(a) at the time of removal of the goods if the goods are to be removed;
(b) at the time when the goods are made available to the person to whom the goods are supplied if the goods are not to be removed;
(c) where goods, being sent or taken on approval or sale or return or similar terms, are removed before it is known whether a taxable supply will take place, at the time when it becomes certain that the taxable supply has taken place or twelve months after the removal, whichever is the earlier.
(3) subject to subsections (4), (5) (6) and (8), the time of supply of services shall be at the time when the services are performed.
(4) Where, before the time applicable under subsection (2) or (3), the person making the supply issues a tax invoice in respect of it or where, before the time applicable under paragraph (2)(a) or (b) or subsection (3), he receives a payment in respect of it, the supply shall, to the extent covered by the invoice or payment, be treated as taking place at the time the invoice is issued or the payment is received, as the case may be, or whichever is the earlier.
(5) Where, within twenty-one days after the time applicable under subsection (2) or (3), the person making the supply issues a tax invoice in respect of it, then, the supply shall, to the extent that it is not treated as taking place at the time referred to in subsection (4) be treated as taking place at the time the invoice is issued.
(6) on the request made in writing by a taxable person, the director General may in writing, as he deems fit, alter the time at which supplies made by the taxable person are to be treated as taking place.
(7) Where there is a supply of goods by virtue only of a transfer or disposal of business assets under subparagraph 4(1) of the First schedule, the time of supply is at the time when the goods are transferred or disposed of.
(8) Where there is a supply of services by virtue only of subparagraph 4(3) of the First schedule, the time of the supply is at the time when the goods are appropriated to the use referred to in the subparagraph.
(9) notwithstanding subsections (1), (2), (3), (4), (5), (6), (7) and (8) where there is—
(a) a supply of goods or services for a consideration the whole or part of which is determined or payable periodically, or from time to time, or at the end of any period;
(b) a supply of goods for a consideration the whole or part of which is determined at the time when the goods are appropriated for any purpose;
(c) a supply of services by virtue of subparagraph 4(3) of the First schedule over a period of time;
(d) a supply of goods or services under any prescribed circumstances,
the time at which the supply made in the course or furtherance of any business in Malaysia shall be determined according to the regulations made under this act.
(10) For any case referred to in subsection (9), the regulations may provide for goods or services to be treated as separately and successively supplied at prescribed times or intervals.
12. Place of supply
(1) This section shall apply for determining, for the purposes of the charge to tax, whether goods or services are supplied in Malaysia.
(2) Where the supply of any goods involves their removal from a place in Malaysia to another place in Malaysia, the goods shall be treated as supplied in Malaysia if the goods are in Malaysia and where the supply of goods involves their removal from a place outside Malaysia to another place outside Malaysia, the goods shall be treated as supplied outside Malaysia.
(3) Where the supply of any goods involves their removal from a place in Malaysia to a place outside Malaysia, the goods shall be treated as supplied in Malaysia and where the supply of goods involves their removal from a place outside Malaysia to a place in Malaysia, the goods shall be treated as supplied outside Malaysia.
(4) a supply of services shall be deemed as made—
(a) in Malaysia if the supplier belongs in Malaysia; and
(b) in another country, if the supplier belongs in the other country.
13. Supply of imported services
(1) Where imported services, being a taxable supply if made in Malaysia, is supplied to a person (hereinafter referred to as the "recipient") for the purposes of any business carried on by him, the supply shall be treated as a supply to and by the recipient in the course or furtherance of his business, and the supply were a taxable supply.
(2) Where the recipient is a taxable person, the provisions of this act shall apply to him with respect to the supply of imported services.
(3) Where tax is due and payable under subsection (1) and the recipient is a person other than a taxable person, he shall be liable for any tax due and payable on the supply of imported services.
(4) notwithstanding section 11 and for the purposes of subsection (1), the time of supply of imported services shall, to the extent covered by any payment by the recipient, be treated to have been made when the supplies are paid for.
14. Place where supplier or recipient of services belongs
(1) The supplier of services shall be treated as belonging in a country if—
(a) he has in that country a business establishment or fixed establishment and no such establishment elsewhere;
(b) he has no such establishment in any country but his usual place of residence is in that country; or
(c) he has such establishments both in that country and elsewhere and his establishment which is most directlyconcerned with the supply is in that country.
(2) The recipient of services shall be treated as belonging in a country if—
(a) he has his usual place of residence in that country where the supply is made to him as an individual and received by him otherwise than for the purposes of any business carried out by him; and
(b) where paragraph (a) does not apply—
(i) he has in that country a business establishment or fixed establishment and no such establishment elsewhere;
(ii) he has no such establishment in any country but his usual place of residence is in that country; or
(iii) he has such establishments both in that country and elsewhere and his establishment at which, or for the purposes of which, the services are most directly used or to be used is in that country.
(3) For the purposes of this section, a fixed establishment in any country includes a branch or an agency through which a person carries on a business in that country.
15. Value of supply of goods or services
(1) subject to the Third schedule, the value of any supply of goods or services shall be determined in accordance with this section.
(2) Where the supply is for a consideration in money, the value of the supply shall be taken to be an amount, with the addition of the tax chargeable, equal to the consideration.
(3) Where the supply is for a consideration not in money, the value of the supply shall be taken to be the open market value of that consideration.
(4) Where the supply is for a consideration not wholly in money, the value of the supply shall be taken to be an amount, with addition of the tax chargeable, equal to the aggregate of—
(a) to the extent that the supply is for a consideration in money, the amount of the money; and
(b) to the extent that the supply is not for a consideration in money, the open market value of that consideration.
(5) Where the supply is not for a consideration, the value of the supply shall be taken to be the open market value of that supply.
(6) Where the supply is not the only matter to which a consideration in money relates, the supply shall be deemed to be for the part of the consideration as is properly attributable to the supply.
(7) For the purposes of this section, the value of the supply of goods shall include excise duty paid or is to be paid where applicable.
(8) The Minister may, by order published in the Gazette, amend the Third schedule and provide for the determination of the value of a supply otherwise than in accordance with this section.
(9) any order made under subsection (8) shall be laid before the dewan rakyat.
16. Value of goods imported
The value of goods imported into Malaysia shall be the sum of the following amounts, namely—
(a) the value of the goods for the purpose of customs duty determined in accordance with the customs act 1967;
(b) the amount of customs duty, if any, paid or is to be paid on the goods; and
(c) the amount of excise duty, if any, paid or is to be paid on the goods.
17. Zero-rated supply
(1) a zero-rated supply is—
(a) any supply of goods or services determined to be a zerorated supply by the Minister under subsection (4); and
(b) any supply of goods if the goods are exported.
(2) Where a taxable person supplies goods or services and the supply is zero-rated, whether or not tax would be chargeable on the supply apart from this section, no tax shall be charged on the supply.
(3) The supply referred to in subsection (2) shall, in any other respect, be treated as a taxable supply and the rate at which tax is treated as charged on the supply shall be zero percent.
(4) The Minister may, by order published in the Gazette, determine any supply of goods or services in Malaysia to be a zero-rated supply.
(5) any order made under subsection (4) shall, at the next meeting of the dewan rakyat, be laid on the table of the dewan rakyat and shall, at the expiration of one hundred and twenty days of being so laid or of such extended period as the dewan rakyat may by resolution direct, cease to have effect if and insofar as it is not confirmed by resolution passed by the dewan rakyat within the said one hundred and twenty days or, if such period has been extended, within such extended period.
(6) Where an order ceases to have effect in whole or in part as provided in subsection (5), any tax charged and levied in pursuance of the order, as the case may be, of such part thereof as ceases to have effect shall, subject to subsections (7) and (8), be refundable to the persons by whom the tax was paid.
(7) Unless the Minister otherwise directs, no tax refundable under subsection (6) shall be refunded, unless the person by whom the tax was paid makes a claim in writing to the director General within one year from the date on which the order ceases to have effect in whole or in part and the claim shall contain such particulars as the director General may require.
(8) The director General may reduce or disallow any tax refundable under subsection (6) to the extent that the refund would unjustly enrich the person by whom the tax was paid.
(9) Where any goods specified in the order made under subsection (4) are imported into Malaysia, no tax shall be chargeable on their importation.
(10) Where any goods are claimed to have been or were to be exported and the supply of the goods is a zero-rated supply, not being goods zero-rated if supplied for home consumption and—
(a) the goods are found in Malaysia after the date on which they were claimed to have been or were to be exported; and
(b) the presence of the goods in Malaysia after that date has not been approved by the director General,
the tax that would have been chargeable on the supply but for the zero-rating shall become due and payable forthwith by the supplier or by any person in whose possession the goods are found in Malaysia and the goods may be liable to seizure under this act.
18. Exempt supply
(1) an exempt supply is a supply of any goods or services which shall not be subject to the imposition of tax under section 9.
(2) The Minister may, by order published in the Gazette, determine any supply of goods or services in Malaysia to be an exempt supply.
(3) any order made under subsection (2) shall, at the next meeting of the dewan rakyat, be laid on the table of the dewan rakyat and shall, at the expiration of one hundred and twenty days of being so laid or of such extended period as the dewan rakyat may by resolution direct, cease to have effect if and insofar as it is not confirmed by resolution passed by the dewan rakyat within the said one hundred and twenty days or, if such period has been extended, within such extended period.
(4) Where an order ceases to have effect in whole or in part as provided in subsection (3), any tax charged and levied in pursuance of the order, as the case may be, of such part thereof as ceases to have effect shall, subject to subsections (5) and (6), be refundable to the persons by whom the tax was paid.
(5) Unless the Minister otherwise directs, no tax refundable under subsection (4) shall be refunded, unless the person by whom the tax was paid makes a claim in writing to the director General within one year from the date on which the order ceases to have effect in whole or in part and the claim shall contain such particulars as the director General may require.
(6) The director General may reduce or disallow any tax refundable under subsection (4) to the extent that the refund would unjustly enrich the person by whom the tax was paid.
(7) Where any goods specified in the order made under subsection (2) are imported into Malaysia, no tax shall be chargeable on their importation.
Part Iv
Registration
19. Registration of taxable person
(1) The registration of taxable persons under this act shall be in accordance with the provisions of this Part and in the manner as may be prescribed.
(2) in this Part—
(a) references to supplies are references to supplies made in the course or furtherance of business;
(b) references to value of a supply of goods or services are references to value determined on the basis that no tax is chargeable on the supply or no flat rate addition is included in the consideration of the supply.
20. Liability to be registered
(1) The Minister may, by order published in the Gazette, specify the amount of taxable supply to give effect to the provisions of this section.
(2) any order made under subsection (1) shall be laid before the dewan rakyat.
(3) subject to subsections (5) and (6), any person who is not registered who makes any taxable supply is liable to be registered—
(a) at the end of any month, where the total value of all his taxable supplies in that month and the eleven months immediately preceding the month has exceeded the amount of taxable supply specified under subsection (1); or
(b) at the end of any month, where there are reasonable grounds for believing that the total value of all his taxable supplies in that month and the eleven months immediately succeeding the month will exceed the amount of taxable supply specified under subsection (1).
(4) subject to subsections (5) and (6), where any business carried on by any taxable person is transferred to another person as a going concern under section 69 and the transferee is not registered at the time of the transfer, the transferee is liable to be registered at that time if—
(a) the total value of all his taxable supplies in the period of twelve months immediately preceding the time of the transfer has exceeded the amount of taxable supply specified under subsection (1); or
(b) there are reasonable grounds for believing that the total value of all his taxable supplies in the period of twelve months beginning from the time of the transfer will exceed the amount of taxable supply specified under subsection (1).
(5) in determining the value of any person’s supply for the purposes of paragraphs (3)(a) and (4)(a), any supply made at the time when he was previously registered shall be disregarded if—
(a) his registration was cancelled otherwise than under subsection 26(3); and
(b) the director General is satisfied that before his registration was cancelled, he had given all the information required by the director General in order to determine whether to cancel the registration.
(6) in determining the value of any person’s supplies for the purposes of subsections (3) and (4), the following supplies shall be excluded:
(a) supplies of goods that are capital assets of the business in the course or furtherance of which they are supplied or to be supplied;
(b) supplies of imported services;
(c) supplies made in accordance with the Warehousing scheme under section 71; and
(d) supplies made within or between designated areas under section 162.
(7) any person who is liable to be registered under subsection (3) or (4) but fails to register commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
21. Notification of liability and registration
(1) a person who is liable to be registered under subsection 20(3) shall notify the director General of the liability by applying to be registered in the prescribed form within twenty-eight days from the end of the month referred to in paragraph 20(3)(a) or (b), as the case may be.
(2) The director General shall register any person who notifies his liability under subsection (1) with effect from the first day of the following month in which the twenty-eighth day falls or from such earlier date as may be agreed between the director General and him but such date shall not be earlier than the date he becomes liable to be registered.
(3) a person who is liable to be registered under subsection 20(4) shall notify the director General of the liability by applying to be registered in the prescribed form within twenty-eight days from the time when the business is transferred.
(4) The director General shall register any person who notifies his liability under subsection (3) with effect from the date when the business is transferred.
(5) Where a taxable person fails to comply with subsection (1) or (3)—
(a) the director General shall register him on the date as the director General may determine but not earlier than the date his liability to be registered became known or made known to the director General; and
(b) the person shall be liable to pay a late registration penalty equal to the specified percentage of the tax which should have been paid from the date he should have been registered to the date he is registered and hereinafter referred to as late registration period.
(6) The percentage referred to in subsection (5) shall apply to the following late registration periods:
(a) five percent if within thirty days;
(b) additional five percent after thirty days but not exceeding sixty days; and
(c) additional three percent for every subsequent thirty days or part thereof,
and subject to a maximum of twenty-five percent.
(7) references to registration in this Part are references to registration in a register kept with the director General in the form as he may determine for the purposes of this act.
(8) any person who contravenes subsection (1) or (3) commits an offence.
22. Cessation of liability to be registered
(1) subject to subsection (2), any taxable person shall
cease to be liable to be registered at the end of any month
where the director General is satisfied that the value of all his
taxable supplies in the period of twelve months then beginning,
will not exceed the amount of taxable supply specified under
subsection 20(1).
(2) a person shall not cease to be liable to be registered by
virtue of subsection (1) where the director General is satisfied
that the reason the value of all his taxable supplies will not exceed
the amount of taxable supply specified under subsection 20(1)
is that in the period in question he will cease making taxable
supplies, or will suspend making them for a period of thirty days
or more.
(3) in determining the value of any person’s supplies for
the purposes of subsection (1), the following supplies shall be
excluded:
(a) supplies of goods that are capital assets of the business
in the course or furtherance of which they are supplied
or to be supplied;
(b) supplies of imported services;
(c) supplies made in accordance with the Warehousing scheme
under section 71; and
(d) supplies made within or between designated areas under
section 162.
Direction to treat persons as a single taxable person
23. (1) Without prejudice to section 20, where the director
General is satisfied that any separation of business activities is
artificial resulting in an avoidance of tax, he may make a direction
directing that the persons named in the direction be treated as a
single taxable person carrying on the activities of the business
described in that direction and that single taxable person shall
be liable to be registered with effect from the date specified in
the direction.
(2) For the purposes of subsection (1), in determining whether
any separation of business activities is artificial, regard shall be
had to the extent to which the different persons carrying on those
business activities are closely bound to one another by financial,
economic and organisational links.
(3) The director General may make a direction naming any
person if the director General is satisfied—
(a) that the person is making or has made taxable supplies;
(b) that the activities in the course of which the person
makes or has made those taxable supplies form only
part of certain activities in the business and that the
other activities in that business whether or not they are
similar to the activities carried on by that person are
being carried on concurrently or previously, or both, by
one or more other persons; and
(c) that if all the taxable supplies made in that business were
taken into account, the person carrying on that business
would, at the time of the direction, be required to be
registered by virtue of section 20.
(4) any direction made shall be served on each of the persons
named in it.
(5) Where, after a direction had been given under this section by
specifying a description of the business, it appears to the director
General that any person who has not been named in that direction
is making taxable supplies in the course of activities which should
be regarded as part of the business activities, the director General
may make and serve on that person a supplementary direction
referring to the earlier direction and the description of business
specified in it, and adding that person’s name to those of the
persons named in the earlier direction with effect from—
(a) the date on which that person began to make the taxable
supplies; or
(b) the date specified in the earlier direction in which the
single taxable person referred to is registered under
subsection (1),
whichever is the later.
(6) Where, immediately before any direction, including a
supplementary direction, is made, any person named in the
direction is registered in respect of taxable supplies made by
him as specified in subsection (3) or (5), his registration shall
be revoked by the director General with effect from the date the
single taxable person is registered under subsection (1) and upon
the revocation of his registration, he together with all the persons
named in the direction shall be treated as a single taxable person
under this section.
(7) in relation to a business specified in a direction, the
persons named in the direction together with the person named
in the supplementary direction relating to that business being the
persons who together are to be treated as a single taxable person
are referred to as "the constituent members" in subsections (8)
and (9).
(8) Where any direction is made under this section—
(a) the single taxable person carrying on the business specified
in the direction shall be registered in the name to be
jointly nominated by the persons named in the direction
by notice in writing given to the director General not
later than fourteen days after the date of the direction
or, in default of the nomination, in the name as may be
specified in the direction;
(b) any taxable supply made by one of the constituent members
in the course of the activities of the single taxable person
shall be treated as being a taxable supply made by the
single taxable person;
(c) each of the constituent members shall be jointly and
severally liable for any tax due and payable by the
single taxable person;
(d) without prejudice to paragraph (c), any failure by the
single taxable person to comply with any requirement
imposed by or under this act shall be treated as a failure
by each of the constituent members severally; and
(e) subject to paragraphs (a) to (d), the constituent members
shall be treated as a partnership carrying on the business
of the single taxable person and any question as to the
scope of the activities of that business at any time shall
be determined accordingly.
(9) Where it appears to the director General that any person
who is one of the constituent members should no longer be
regarded as such for the purposes of paragraphs (8)(c) and (d) and
the director General gives notice in writing to that effect, that
person shall not have any liability by virtue of those paragraphs
for anything done after the date specified in that notice and
accordingly on that date he shall be treated as having ceased to
be a member of the partnership referred to in paragraph (8)(e).
Voluntary registration
24. (1) Where any person who is not liable to be registered
satisfies the director General that he is carrying on a business
and he—
(a) makes a taxable supply including a taxable supply which
is disregarded under this act; or
(b) intends to make a taxable supply,
in the course or furtherance of that business, the director General
may, if the person applies in the prescribed form and subject
to such conditions as the director General deems fit to impose,
register the person from such date as the director General may
determine and the person shall remain registered for a period of
not less than two years or such other shorter period.
(2) Where any person who is not liable to be registered
satisfies the director General that he is carrying on a business
and he—
(a) makes a supply outside Malaysia which would be a taxable
supply if made in Malaysia; or
(b) intends to make a supply outside Malaysia which would
be a taxable supply if made in Malaysia,
in the course or furtherance of that business, and in either case
he—
(a) has a business establishment in Malaysia or his usual
place of residence is in Malaysia; and
(B) does not make and does not intend to make a taxable
supply in Malaysia,
the director General may, if the person applies in a prescribed
form and subject to such conditions as the director General deems
fit to impose, register the person from such date as the director
General may determine.
(3) The director General may cancel the registration of a
person under paragraph (1)(b) or (2)(b) if he does not begin
to make a supply by the intended date in his application or if
he is in breach of any condition imposed under subsection (1)
or (2).
(4) The director General may refuse any application for
registration made under subsection (1) or (2) as he deems fit.
Notification of cessation of liability or voluntary
registration
25. (1) a person registered under section 21 or subsection 24(1)
who ceases to make or ceases to have the intention of making
a taxable supply shall notify the director General in writing of
that fact and the date thereof within thirty days from the date of
cessation or intention to cease.
(2) a person registered under subsection 24(2) who—
(a) ceases to make or ceases to have the intention of making
a supply outside Malaysia which would be a taxable
supply if made in Malaysia; or
(b) makes or intends to make a taxable supply in
Malaysia,
shall notify the director General in writing of that fact and the
date thereof within thirty days from the date of the occurrence.
(3) any person who contravenes subsection (1) or (2) commits
an offence.
Cancellation of registration
26. (1) Where a registered person makes a request in writing to
cancel his registration or makes a notification under section 25,
the director General may cancel the person’s registration from
such date as the director General may determine if he is satisfied
that the person can be deregistered.
(2) Where the director General is satisfied that a registered
person has ceased to be registrable, the director General may
cancel his registration with effect from the day on which he
ceased to be registrable or from such later date as the director
General may determine.
(3) Where the director General is satisfied that on the day on
which a registered person was registered he was not registrable,
the director General may cancel his registration with effect from
the date of notification in writing by the director General.
(4) For the purposes of this section, "registrable" means liable
to be registered under section 20 or eligible to be registered under
section 24.
Group registration
27. (1) Two or more companies are eligible to be treated as
members of a group if they satisfy the conditions as may be
prescribed.
(2) Members of a group may apply in the prescribed form to the
director General to be treated as a group and every member shall,
in that application, nominate a member to be their representative
member.
(3) The director General may, as he deems fit, approve or refuse
any application made under subsection (2) and upon approval,
impose conditions.
(4) The director General may, as he deems fit, refuse to
register the member nominated by the members of the group as
the representative member.
(5) The registration of a group shall be in the name of the
representative member.
(6) Where companies have been treated as a group—
(a) any taxable supply of goods or services by a member
of the group to another member of the group shall be
disregarded;
(b) any taxable supply of goods or services by or to a member
of the group shall be treated as a supply by or to the
representative member;
(c) any business carried on by a member of the group shall
be treated as carried on by the representative member;
and
(d) any importation of goods or supply of imported services
by any member shall be treated as being imported by the
representative member and any tax paid or due and payable
by a member of the group on the importation of goods
or supply of imported services shall be treated as paid
or due and payable by the representative member.
(7) all members of the group shall be liable jointly and severally
for any tax due and payable by the representative member.
(8) The director General may cancel the registration of a group
or terminate the treatment of a company as a member of a group
as he deems fit.
Registration of partnership
28. (1) The registration—
(a) of persons carrying on a business in a partnership shall
be in the name of the firm; and
(b) of the same persons carrying on separate businesses
in a partnership may be in the separate names of the
respective firms.
(2) in determining whether goods or services are supplied to
or by the persons referred to in subsection (1), no account shall
be taken of any change in the partnership.
(3) notwithstanding any written law to the contrary, until the
notification in writing of the date on which a change in partnership
is made to the director General, any person who has ceased to
be a partner in the partnership shall be regarded as continuing to
be a partner for the purposes of this act and shall be liable for
the proportion of the partnership’s liability on any tax due and
payable on any supply of goods or services by the partnership.
(4) Where any person ceases to be a partner in a partnership
during any taxable period or is treated as so doing by virtue of
subsection (3), any notice, whether of assessment or otherwise,
which is served on the partnership and relates to the taxable
period or to any other taxable period during the whole or part
of which he was a partner in the partnership, shall be deemed
as to have been served also on him.
(5) notwithstanding any written law to the contrary, any notice,
whether of assessment or otherwise, which is addressed to a
partnership by the name in which it is registered under this act,
and is served in accordance with this act shall be deemed as
having been properly served on the partnership and accordingly,
where subsection (4) applies, as having been properly served on
any previous partner.
(6) subsections (1) and (4) shall not affect the extent to which,
under any other written law, a partner is liable for tax owed by
the firm.
(7) Where a person is a partner in a firm during part only
of a taxable period, his liability for tax on any supply of goods
or services by the firm during the taxable period shall be the
proportion of the firm’s liability as may be just.
(8) Where any notice is required to be given by a partnership
under this act, it shall be the joint and several liability of all
partners to give the notice, except that if a notice is given by
any one partner, it shall be regarded as sufficient compliance
with the requirement.
(9) any person who fails to pay for the proportion of the
partnership’s liability on any tax due and payable which he is
liable to pay under subsection (3) commits an offence.
Registration of societies or similar organisation
29. (1) The registration of any society or similar organisation
may be in the name of the society or similar organisation and
in determining whether goods or services are supplied to or by
the society or similar organisation, no account shall be taken of
any change in its members.
(2) Where anything is required to be done under this act by
or on behalf of the society or similar organisation, the affairs of
which are managed by a committee, or committee of its members,
it shall be the joint and several responsibility of—
(a) every member holding office as president, chairman,
treasurer, secretary or any similar office; or
(b) in default of any such member, every member holding
office as a member of a committee,
except that if it is to be done or done strictly by any official or
committee member, it shall be regarded as sufficient compliance
with the requirement.
Registration of branches or divisions
30. (1) Where any business of a taxable person is carried on by
one or more branches or divisions, that taxable person may apply
for registration in the prescribed form to the director General for
any of the branches or divisions to be registered in the name of
the branch or division.
(2) The director General may approve an application made
under subsection (1) subject to such conditions as he deems fit
to impose if he is satisfied that the taxable person has fulfilled
the following requirements:
(a) it is likely to cause real difficulty for the taxable person
to submit a single return in respect of all the branches
or divisions but for the separate registration;
(b) each branch or division maintains a separate account in
respect of its activities;
(c) each branch or division is separately identifiable by
reference to the nature of the activities carried on by
or the location of the branch or division; and
(d) each branch or division has the same taxable period.
(3) The director General may, at any time by notice in writing
to the registered person, cancel the registration approved under
subsection (2) in respect of any or all of the branches or divisions
if he is satisfied that—
(a) the registered person has failed to comply with any condition
imposed by the director General under subsection (2);
(b) any of the requirements referred to in subsection (2) has
ceased to apply;
(c) the registered person has provided any false, misleading
or inaccurate declaration or information in his application
under subsection (1); or
(d) it is necessary for the protection of the revenue.
(4) Where the director General cancels the registration in
accordance with subsection (3), it shall have effect from the date
of the cancellation as determined by the director General.
(5) subject to subsection (6), the taxable person may apply in
writing to the director General for any branch or division separately
registered under subsection (2) to cease to be so registered, and
the director General may cancel the separate registration with
effect from the date of application or from such later date as
may be determined by the director General.
(6) a taxable person registered under subsection (2) shall
remain registered for a period of not less than two years or such
other shorter period as the director General may determine.
Personal representatives deemed to be taxable persons
31. (1) Where a taxable person—
(a) dies;
(b) goes into liquidation or receivership;
(c) becomes bankrupt; or
(d) becomes incapacitated,
the director General may deem any personal representative carrying
on the business in the interim to be a taxable person from the
date the personal representative takes over until the time when a
person is registered in respect of the business or in the case of
incapacity, until the time as the incapacity ceases.
(2) any requirement to pay tax on the personal representative
carrying on the business referred to in subsection (1) shall apply
to him to the extent of the assets over which he has control.
(3) The personal representative carrying on the business referred
to in subsection (1) shall, within twenty-one days commencing to
do so, notify in writing to the director General of that fact and
of the date of the death, liquidation, receivership, bankruptcy or
the nature of the incapacity and the date on which it began.
(4) notwithstanding any written law to the contrary, the personal
representative carrying on the business referred to in subsection (1)
shall, before disposing any of the assets of that taxable person, set
aside a sum out of the assets as appears to the director General
to be sufficient to pay for any tax and penalty, if any, that is or
will thereafter become due and payable or payable, as the case
may be, in respect of any taxable supply of goods or services
that have been supplied by that taxable person before the personal
representative is deemed to be a taxable person carrying on the
business in the interim and the personal representative shall pay
for the tax and penalty.
(5) The personal representative carrying on the business referred
to in subsection (1) who fails to comply with subsection (4) shall
be personally liable to pay for the tax or penalty, that is or will
thereafter become due and payable or payable, as the case may
be.
(6) Where two or more personal representatives carry on the
business referred to in subsection (1), the obligations and liabilities
of the personal representatives shall be attached to all of them
jointly and severally, subject to a right of contribution between
themselves as in cases of contract.
(7) any person who contravenes subsection (3) commits an
offence and shall, on conviction, be liable to a fine not exceeding
five thousand ringgit or to imprisonment for a term not exceeding
one year or to both.
Exemption from registration for persons making or intending
to make zero-rated supply
32. (1) notwithstanding any provision of this act, where any
person who makes or intends to make a taxable supply satisfies
the director General that the supply is a zero-rated supply,
the director General may, if he deems fit and on that person’s
request, exempt the person from registration until the exemption
is withdrawn.
(2) Where there is a change in the nature of the supply made
by the person exempted from registration under subsection (1),
he shall notify in writing to the director General of the change
within thirty days of the date on which it occurred.
Part V
Accounting, Assessment, Recovery, ETC.
Issuance of tax invoice
33. (1) except as otherwise provided in this section, every
registered person who makes any taxable supply of goods or
services in the course or furtherance of any business in Malaysia,
shall issue a tax invoice—
(a) containing the prescribed particulars in respect of the
supply;
(b) within twenty-one days after the time when the supply is
deemed as taking place under section 11 or within any
longer period as the director General may allow; and
(c) stating the amount payable excluding tax, the rate of tax
and the total tax chargeable shown as a separate amount,
except as the director General may otherwise allow and
subject to conditions as he deems fit to impose.
(2) The director General may, upon request in writing and
subject to conditions as he deems fit to impose, allow—
(a) any one or more of the prescribed particulars not to be
contained on a tax invoice if he is satisfied that there
are or will be sufficient records available to establish
the particulars of the supply; or
(b) a tax invoice not to be issued if he is satisfied that it will
not be appropriate for the registered person to issue a
tax invoice.
(3) subject to the prescribed conditions, where a registered
person provides a document to himself namely a self-billed invoice
which purports to be a tax invoice in respect of a supply of goods
or services to him by another registered person, the document
may, with the prior approval of the director General, be treated
as the tax invoice.
(4) Where goods or services described in subsection 66(4) or
subparagraph 4(7) of the First schedule are sold by auction or
otherwise than by auction, the auctioneer or the person selling the
goods or services shall issue a document containing the particulars
of the tax chargeable as may be prescribed and the document
issued to the buyer shall be treated as a tax invoice provided
by the person by whom the goods or services are deemed to be
supplied in accordance with subsection 66(4) or subparagraph
4(7) of the First schedule.
(5) no invoice showing an amount which purports to be a tax
shall be issued—
(a) on any supply of goods or services which is not a taxable
supply;
(b) on any zero-rated supply; or
(c) by any person who is not a registered person.
(6) a tax invoice under subsection (1) is not required to be
issued where a registered person makes the following supply:
(a) a zero-rated supply; or
(b) a supply made without consideration on which tax is
charged.
(7) notwithstanding subsection (1), no tax invoice shall be
issued for—
(a) any supply of second-hand goods under section 60; or
(b) any supply of imported services.
(8) any person who contravenes this section commits an
offence.
Production of tax invoices by computer
34. For the purposes of any provision under this act in relation
to a tax invoice, a registered person shall be treated as having
issued a tax invoice to another person notwithstanding that there
is no delivery of any equivalent document in paper form to the
person if the requisite particulars are recorded in a computer
and are—
(a) transmitted or made available to the person by electronic
means; or
(b) produced on any material other than paper and is delivered
to the person.
Credit note and debit note
35. Where any taxable supply is made by or to any registered
person which involves the issuance and receipt of credit note or
debit note under the prescribed circumstances and conditions, the
registered person, whether he is the supplier or recipient of the
taxable supply, shall make adjustments in his returns accordingly
and the credit note and debit note shall contain the prescribed
particulars.
Duty to keep records
36. (1) every taxable person shall keep full and true records
written up to date of all transactions which affect or may affect
his liability to tax, including the following records:
(a) all records of goods and services supplied by or to that
taxable person including tax invoices, invoices, receipts,
debit note, credit note and export declaration forms;
(b) all records of importations of goods; and
(c) all other records as may be prescribed.
(2) any record kept under this section shall be—
(a) preserved for a period of seven years from the latest date
to which the record relates;
(b) in the national or english language; and
(c) kept in Malaysia, except as otherwise approved by the
director General and subject to the conditions as he
deems fit.
(3) Where the record is in an electronically readable form, the
record shall be kept in such manner as to enable the record to
be readily accessible and convertible into writing.
(4) Where the record is originally in a manual form and is
subsequently converted into an electronic form, the record shall
be retained in its original form prior to the conversion.
(5) a copy of the record shall be admissible in evidence in
any proceedings to the same extent as the record itself.
(6) any person who contravenes this section commits an offence
and shall, on conviction, be liable to a fine not exceeding fifty
thousand ringgit or to imprisonment for a term not exceeding
three years or to both.
Accounting basis
37. (1) For the purposes of section 41, every taxable person
shall account for tax in accordance with the time of supply under
sections 11, 13, 71, 73 and 74.
(2) notwithstanding subsection (1), the director General may,
upon application in writing by any registered person and subject
to the prescribed conditions, approve the registered person to
account for tax solely on a payment basis.
(3) Where the registered person has been approved to account
for tax on a payment basis under subsection (2), the registered
person shall account for tax in the prescribed manner.
(4) Where the registered person has been approved to account
for tax on a payment basis under subsection (2) and elects not
to proceed with the payment basis, he may apply in writing
to the director General to account for tax in accordance with
subsection (1).
(5) The director General may refuse to approve the application
made under subsection (2) or (4) as he deems fit.
(6) The director General may, by notice in writing, revoke
the approval under subsection (2) under the prescribed
circumstances.
(7) Where there is a change in the basis of accounting, the
registered person shall make adjustment of the tax in the prescribed
manner.
Credit for input tax against output tax
38. (1) any taxable person is entitled to a credit for so much
of his input tax as is allowable under section 39 to be deducted
from any output tax that is due from him.
(2) For the purposes of any tax on a taxable supply of goods
or services to a taxable person, any flat rate addition included in
the consideration of any supply acquired by a registered person
from the approved person under section 75 shall be treated as a
tax on the supply.
(3) subject to subsections (4) and (5), where—
(a) no output tax is due at the end of any taxable period;
or
(b) the amount of the credit entitled by virtue of subsection (1)
to the taxable person exceeds the output tax,
the amount of the credit or the amount of credit that exceeds the
output tax, as the case may be, shall be refunded to the taxable
person by the director General.
(4) The whole or any part of any input tax due as credit to
any taxable person in any taxable period may be held over to
be credited to any following or subsequent taxable period, either
on the taxable person’s own application in writing or on any
direction given by the director General.
(5) Where at the end of any taxable period any amount is due
under subsection (3), the director General may withhold payment
of the amount if—
(a) the taxable person fails to furnish the return under
section 41 or to provide any information as required by
the director General; or
(b) the director General has reasonable grounds to believe
that the amount should not be the amount due to the
person.
(6) no deduction shall be made under subsection (1) nor shall
any refund be made under subsection (3), except on a claim made
in the prescribed manner and within the prescribed time.
(7) Where any taxable person has made no taxable supply
during a taxable period or any previous taxable period, any refund
to be made under subsection (3) shall be made subject to the
conditions imposed by the director General as he deems fit.
(8) subject to subsections (5) and (7), any refund to be made
by the director General under subsection (3) shall be made within
the prescribed time.
(9) except as the director General may otherwise allow,
where—
(a) a taxable person fails to pay his supplier the consideration
or any part thereof for the supply of any goods or services
made by his supplier to him at the end of the period of
six months following the date of supply; and
(b) the taxable person has credited under subsection (1) or
been refunded under subsection (3) the input tax to
which the consideration or the part thereof which he
failed to pay relates,
the taxable person shall account of an amount equal to the input
tax which shall be deemed as his output tax.
(10) The taxable person shall account the amount deemed as
output tax under subsection (9) in the taxable period after the
period of six months has elapsed and in accordance with the
method which he was required to use when he first credited the
input tax and he shall repay the amount to the director General
at the same time as any tax in respect of the taxable period would
be due and payable by him.
(11) Where a taxable person—
(a) has complied with subsection (10); and
(b) pays his supplier the consideration or any part thereof
for the supply of goods or services referred to in
paragraph (9)(a),
the taxable person shall be entitled to treat an amount equal to
the input tax relating to the payment referred to in paragraph (b)
as if it were an input tax for the taxable period during which the
payment was made.
(12) The whole or any part of tax charged on any supply of
goods or services or importation of goods as may be prescribed
shall be excluded from any credit under this section.
Amount of input tax allowable
39. (1) The amount of input tax for which any taxable person
is entitled to credit in any taxable period shall be so much of
the input tax for the period that is allowable and reasonable to
be attributable to the following supplies made or to be made by
the taxable person in the course or furtherance of any business
in Malaysia:
(a) any taxable supply, including a taxable supply which is
disregarded under this act;
(b) any supply made outside Malaysia which would be a
taxable supply if made in Malaysia; or
(c) any other supply as may be prescribed.
(2) input tax attributable to any exempt supply shall be treated
as input tax attributable to a taxable supply—
(a) where the value of all exempt supplies would be less
than the prescribed amount and less than the prescribed
proportion of the total value of all supplies; or
(b) in other prescribed circumstances.
Taxable period
40. (1) The director General shall assign each taxable person to
one of the following categories for the purposes of determining
his taxable period:
(a) "category a" means the category of taxable persons
whose taxable period is a period of one month ending
on the last day of any month of any calendar year;
(b) "category B" means the category of taxable persons whose
taxable period is a period of three months ending on
the last day of any month of any calendar year; or
(c) "category c" means the category of taxable persons
whose taxable period is a period of six months ending
on the last day of any month of any calendar year.
(2) a taxable person may, after being assigned to any category
under subsection (1), apply in writing to the director General to
be assigned to any category other than the category to which he
has been assigned.
(3) The director General may, upon receiving any application
under subsection (2), allow or refuse the application and where
the director General—
(a) allows the application, he shall assign the taxable person
to the category as applied for;
(b) refuses the application, he shall retain the category to
which the taxable person was first assigned.
(4) The director General may, as he deems fit, reassign the
taxable person to any category other than the category to which
he was first assigned.
(5) notwithstanding subsection (1), the director General may,
if he considers it necessary in the circumstances of any particular
case, vary the length of any taxable period or the date on which
any taxable period begins or ends.
Furnishing of returns and payment of tax
41. (1) every taxable person shall, in respect of his taxable
period, account for tax in a return as may be prescribed and the
return shall be furnished to the director General in the prescribed
manner not later than the last day of the month following after
the end of his taxable period to which the return relates.
(2) notwithstanding subsection (1), where the taxable person
registers later than the date he should have been registered, he
shall furnish—
(a) the return for the period beginning from the date he
should have been registered and ending on the date in
which he was so registered to the director General not
later than the last day of the month following the end
of the period; and
(b) subsequent returns for the taxable periods as
determined by the director General in accordance with
subsection 40(5).
(3) Where a taxable period has been varied under
subsection 40(5) and notwithstanding subsection (1), the return
shall be furnished not later than the last day of the thirty days
from the end of the varied taxable period.
(4) any person who—
(a) ceases to be liable to be registered under section 20; or
(b) ceases to be registered under section 24,
shall, not later than thirty days after so ceasing or such later date
as the director General may allow, furnish a return containing
particulars as the director General may determine in respect of
that part of the last taxable period during which the person was
registered.
(5) any taxable person who is required to furnish a return
under this section shall pay to the director General the amount
of tax due and payable by him in respect of the taxable period
to which the return relates not later than the last day on which
he is required to furnish the return.
(6) The return referred to in subsections (1), (2) (3) and (4)
shall be furnished whether or not there is tax to be paid.
(7) any person who contravenes this section commits an offence
and shall, on conviction, be liable to a fine not exceeding fifty
thousand ringgit or to imprisonment for a term not exceeding
three years or to both.
Furnishing of declarations and payment of tax by person other
than a taxable person
42. (1) Where any person other than a taxable person is liable
for tax under subsection 13(3) and paragraphs 66(4)(b) and
73(4)(b), the person shall—
(a) account for tax in a declaration as may be prescribed
and the declaration shall be furnished to the director
General; and
(b) pay to the director General the amount of tax due and
payable by him,
not later than the last day of the subsequent month from the
month in which the supply is made or treated as taken place
under those provisions.
(2) any person who contravenes subsection (1) in respect of
paragraph (a) commits an offence.
(3) any person who contravenes subsection (1) in respect
of paragraph (b) commits an offence and shall, on conviction,
be liable to a fine not exceeding fifty thousand ringgit or to
imprisonment for a term not exceeding three years or to both.
Power to assess
43. (1) Where any taxable person—
(a) fails to apply for registration under section 21;
(b) fails to furnish a return under section 41; or
(c) furnishes a return which to the director General appears
incomplete or incorrect,
the director General may assess to the best of his judgement the
amount of tax including the penalty under section 45, if any, due
and payable from the taxable person and shall forthwith notify
him of the assessment in writing.
(2) Where an amount has been paid to any person as being
refund of tax under subsection 38(3) and Part vii which ought
not to have been paid to him, the director General may assess
the amount as being tax due and payable from him and shall
forthwith notify him of the assessment in writing.
(3) The assessment under subsections (1) and (2) shall not be
made more than six years from the date on which the tax was
due and payable or from the date on which the refund was made,
as the case may be, except where in the opinion of the director
General any form of fraud or wilful default has been committed
by or on behalf of any person in connection with or in relation to
tax, the director General may, for the purposes of making good
any loss of tax or payment of refunds of tax attributable to the
fraud or wilful default, make an assessment at any time.
(4) Where any taxable person has been supplied with or has
obtained control of any goods or has imported any goods in the
course or furtherance of a business, the director General may
require him to account for the goods.
(5) Where the taxable person fails to account for the goods
under subsection (4) by reason that the goods have been or are
available to be supplied by him or have been exported or removed
by way of supply or have been lost or destroyed, the director
General may assess to the best of his judgement the amount of
tax that would have been chargeable in respect of the supply of
the goods if they had been supplied by him and shall forthwith
notify the taxable person of the assessment in writing.
(6) Where—
(a) the director General has made an assessment under
subsection (1) in respect of paragraph (1)(a) or (b);
(b) the tax assessed has been paid but no return has been
furnished for the period to which the assessment relates;
and
(c) the person fails to furnish a return for any subsequent
taxable period,
the director General may, as he deems fit, assess an amount of
tax greater than that which he otherwise would have considered
to be appropriate.
(7) Where it appears to the director General that the amount
which ought to have been assessed in an assessment under this
section exceeds the amount which was so assessed, he may—
(a) under the same provision as that assessment was made;
and
(b) within the period during which that assessment could
have been made,
make a supplementary assessment of the amount of the excess
and shall forthwith notify the person in writing accordingly.
(8) Where an amount has been assessed and notified to any
person under subsection (1), (2), (5) or (7), it shall be deemed
to be an amount of tax due and payable from him and may be
recovered accordingly and the amount of tax and penalty, if any,
shall be paid by the person to the director General unless or
except to the extent that the assessment has been withdrawn or
reduced.
(9) The director General may make any alteration in or
addition to the assessment made under this section as he deems
fit to ensure the correctness thereof and shall forthwith notify
the person in writing.
Director General may disregard or vary certain
arrangements
44. (1) Where the director General is satisfied that the purpose
or effect of any arrangement is directly or indirectly—
(a) to alter the incidence or postpone the time due of any tax
which is due and payable by or which would otherwise
have been due and payable by any person;
(b) to relieve any person from any liability to pay tax or to
furnish a return;
(c) to reduce or avoid any liability imposed or which would
otherwise have been imposed on any person by this
act;
(d) to obtain any credit or refund of input tax or any increase
thereof for any person which would not otherwise have
been obtained; or
(e) to hinder or prevent the operation of this act in any
respect,
the director General may, without prejudice to such validity as it
may have in any other respect or for any other purpose, disregard
or vary the arrangement and make such adjustments as he deems
fit to counteract any tax advantage obtained or obtainable by that
person from or under the arrangement.
(2) For the purposes of this section the director General may
deem—
(a) any person other than a taxable person who is a party to
or has participated in any arrangement, to be a taxable
person;
(b) any supply of goods or services, whether or not a taxable
supply, that is affected by or is part of any arrangement,
made to and made by any taxable person or a person
deemed to be a taxable person under paragraph (a), to
be a taxable supply;
(c) any supply of goods or services that, but for any arrangement
affected by this section, would have been the taxable
period in which the supply was made, to take place in
any taxable period;
(d) any supply of goods or services, that is affected by
or is part of any arrangement, to have been made, or
consideration for the supply to be given, at open market
value.
(3) This section shall not apply to any arrangement carried
out for bona fide commercial reasons and had not as one of its
main purposes the obtaining of any tax advantage.
(4) For the purposes of this section, "tax advantage"
includes—
(a) any avoidance or reduction in the liability of any person
to pay tax;
(b) any increase in the entitlement of a person to a credit or
refund of input tax;
(c) any reduction in the total consideration payable by any
person in respect of any supply of goods or services;
or
(d) any postponement of the time when tax is due and
payable.
Penalty for late payment
45. (1) Where any tax due and payable remains unpaid by any
taxable person after the last day on which it was due and payable
under subsection 41(5), the taxable person shall be subject to the
following percentage of late payment penalty:
(a) five percent if within thirty days;
(b) additional five percent after thirty days but not exceeding
sixty days; and
(c) additional three percent for every subsequent thirty days
or part thereof,
and subject to a maximum of twenty-five percent.
(2) The late payment penalty under subsection (1) shall apply
to any tax due and payable but remains unpaid by any person
other than a taxable person under section 42.
Offsetting unpaid tax against refund
46. notwithstanding any provision of this act, where any person
fails to pay in whole or in part—
(a) any amount of tax due and payable under this act; or
(b) any amount of customs duty or excise duty,
the director General may set off, against the unpaid amount
referred to in paragraphs (a) and (b), any amount or any part of
any amount refundable to that person and the director General
shall treat the amount set off as payment received from that
person.
Recovery of tax, etc., as a civil debt
47. (1) Without prejudice to any other remedy and notwithstanding
any appeal against any decision of the director General under
section 132, any tax due and payable, any penalty payable and
any surcharge accruing under this act may be recovered by the
Minister as a civil debt due to the Government.
(2) Where an invoice shows a supply of goods or services
as having taken place with tax chargeable on the supply, there
shall be recoverable from the person who issued the invoice an
amount equal to—
(a) that which is shown on the invoice as tax; or
(b) if the tax is not separately shown, so much of the total
amount shown as payable as is to be taken as representing
tax,
on the supply.
(3) subsection (2) shall apply whether or not—
(a) the invoice is a tax invoice issued under section 33;
(b) the supply shown on the invoice actually takes or has
taken place or the amount shown as tax or any amount
of tax is or was chargeable on the supply; or
(c) the person issuing the invoice is a taxable person,
and any amount recoverable from the person under subsection (2)
shall be recoverable as such and shall otherwise be recoverable
as a civil debt due to the Government.
(4) in any proceedings to recover the tax, penalty or surcharge
under subsection (1), the production of a certificate signed by
the director General that any tax, penalty or surcharge and the
amount shown thereof as due in any return, assessment or notice
made under this act from a person named therein and giving the
address of the person and purporting to be a copy of or an extract
from any notice of assessment shall be conclusive evidence of
the making of the assessment and shall be sufficient authority
for the court to give judgement for that amount.
(5) any penalty or surcharge imposed under this act shall,
for the purposes of this act and the Limitation act 1953
[Act 254], the Limitation ordinance of sabah [Sabah Cap. 72]
and the Limitation ordinance of sarawak [Sarawak Cap. 49], as
the case may be, be recoverable as if it were tax due and payable
under this act and accordingly subsection 6(4) of the Limitation
act 1953, section 3 of the Limitation ordinance of sabah and
section 3 of the Limitation ordinance of sarawak, as the case
may be, shall not apply to the penalty or surcharge.
Seizure of goods for the recovery of tax, etc.
48. (1) Without prejudice to section 43, any goods belonging
to the person referred to in section 43 which may be in excise
control or customs control or at his place of business may be
seized until the tax, penalty or other moneys, or the deficient
tax, penalty or other moneys, are paid, or the refund erroneously
paid to him is repaid.
(2) notwithstanding section 52, the director General may seize
or sell any goods belonging to the person liable to pay the tax,
penalty or other moneys for recovery of the amount due and
payable under section 43 and accrued under section 52 or any
outstanding balance thereof.
(3) Where the tax, penalty or other moneys or deficiency, or
the refund to be repaid remain unpaid, as the case may be, the
director General may—
(a) after giving not less than thirty days’ notice in writing
to the owner or his agent if the name and address of
the owner or agent is known to him; or
(b) after due notice in the Gazette if the name and address
of the owner or agent is not known to him,
sell the goods.
(4) The proceeds of the sale of any such goods shall be applied
to the payment of the tax, penalty and other moneys or deficient
tax, penalty or other moneys payable or the refund erroneously
paid or other charges which may be due in respect of selling off
such goods and the surplus, if any, shall be paid to the owner of
such goods and if the owner cannot be found within one month of
the sale, such surplus shall be paid into the consolidated Fund.
(5) Where at the sale of any such goods no sufficient bid is
forthcoming to defray the tax, penalty or other moneys payable
or deficient tax, penalty or other moneys payable or the refund
erroneously paid, as the case may be, the goods shall be forfeited
to the Government and shall be disposed of in such manner as
the director General may direct.
(6) every auction sale under this section—
(a) shall be conducted by or in the presence of a senior
officer of goods and services tax; and
(b) may be conducted electronically in the manner to be
determined by the director General.
Power to collect tax, etc., from person owing money to taxable
person
49. (1) Where any tax, penalty, surcharge or other moneys is
due and payable, payable or accrued by any taxable person, the
director General may, by notice in writing a copy of which shall
be forwarded to the taxable person at his last-known place of
address, require—
(a) any person by whom any money is due or accruing or
may become due and payable to the taxable person;
(b) any person who holds or may subsequently hold money
for or on account of the taxable person;
(c) any person who holds or may subsequently hold money
for or on account of some other person for payment to
the taxable person; or
(d) any person having authority from any other person to
pay money to the taxable person,
to pay to the director General forthwith, or within the time as
the director General allows, the money not being salary or wages
due or accruing due to the taxable person or so much thereof as
is sufficient to pay the tax, penalty or surcharge, if any, due and
payable, payable or accrued by the taxable person as aforesaid.
(2) all payments made pursuant to any notice under this section
shall be deemed to be made on behalf of the taxable person and
with the authority of the taxable person and all other persons
concerned.
(3) For the purposes of this section, the director General may
require any person to give him information as to any money, fund
or asset which may be held by the person for or of any moneys
due by him to any other person.
Recovery of tax from persons leaving Malaysia
50. (1) Where the director General has reason to believe that any
person is about or is likely to leave Malaysia without paying—
(a) any tax due and payable by him;
(b) any penalty payable under section 45;
(c) any surcharge accrued under section 52; or
(d) any other money recoverable from him under this act,
the director General may issue to any commissioner of Police
or director of immigration a notice containing particulars of the
person and the offence committed with a request that the person
be prevented from leaving Malaysia unless and until he pays the
tax, penalty, surcharge or any other moneys, or furnishes security
to the satisfaction of the director General for their payment.
(2) subject to any order issued or made under any written law
for the time being in force relating to banishment or immigration,
any commissioner of Police or director of immigration who
receives a notice under subsection (1) in respect of a person shall
exercise all measures which may include the removal and retention
of any certificate of identity, passport, exit permit or other travel
document in relation to that person as may be necessary to give
effect to the notice.
(3) The director General shall cause the notice issued under
subsection (1) to be served personally or by registered post on
the person to whom the notice relates:
Provided that the non-receipt of the notice by that person shall
not invalidate anything done under this section.
(4) Where the person in respect of whom a notice has been
issued under subsection (1) produces on or after the date of the
notice a written statement signed by the director General stating
that any tax, penalty, surcharge or any other money specified in
the notice have been paid or that security has been furnished
for its payment, the statement shall be sufficient authority for
allowing that person to leave Malaysia.
(5) no legal proceedings shall be instituted or maintained
against the Federal Government, a state Government or any public
officer in respect of anything lawfully done under this section.
(6) For the purposes of this section—
(a) "commissioner of Police" means the commissioner
appointed under subsection 5(1) of the Police act 1967
[Act 344];
(b) "director of immigration" means the director of immigration
appointed under subsection 3(1a) of the immigration
act 1959/1963 [Act 155].
Power to require security
51. Where it appears to the director General requisite to do
so for the due compliance with the provisions of this act and
generally for the protection of the revenue, the director General
may require any person to give security or further security of such
amount in such manner as he may determine for the payment of
any tax which is or may become due and payable from him.
Payment by instalments
52. (1) The director General may allow any tax or penalty to
be paid by instalments, under the prescribed circumstances in
such amounts and on such dates as the director General may
determine.
(2) Where the tax is allowed to be paid by instalments, section
45 shall not be applicable to the tax from the date the director
General allows the payment by instalments.
(3) Where there is a default in the payment of any one instalment
on its due date for the payment of the balance of the amount
due and payable or payable, the whole outstanding balance shall
become due and payable or payable on that date and shall, without
any further notice being served on the person liable to pay the
amount due, be subject to a surcharge equal to ten per cent of
that balance and the surcharge shall be recoverable as if it were
due and payable or payable under this act.
Imported goods not to be released until tax paid
53. any imported goods shall not be released from the customs
control until the tax on those goods has been paid in full except
as otherwise allowed by the director General.
Liabilities of directors, etc.
54. notwithstanding any written law to the contrary, where
tax, penalty, surcharge or any other money is due and payable,
payable or accrued under this act by—
(a) a company;
(b) a firm; or
(c) a society or other body of persons,
the directors of the company or the partners of the firm or officials
or committee members of the society or other body of persons, as
the case may be, shall together with the company, firm, society
or other body of persons be jointly and severally liable for the
tax, penalty, surcharge or any other money:
Provided that in relation to a company that is being wound
up, the directors of the company shall only be liable where the
assets of the company are insufficient to meet the amount due,
after paying any sums having priority under the companies act
1965 [Act 125] in relation to the application of the assets of the
company in the winding-up over the tax, penalty, surcharge or
any other money.
PART VI
FUND FOR GST REFUND
Establishment of Fund for GST Refund
55. (1) a fund to be known as the Fund for GsT refund (in
this section referred to as "the Fund") is established which shall
be specified in and incorporated into the second schedule to the
Financial Procedure act 1957 [Act 61].
(2) There shall be paid into the Fund the amount of tax collected
under this act as may be authorized by the Minister.
(3) The moneys of the Fund shall be applied for the making
of any refund under section 38 and Part vii.
(4) The Fund shall be administered by the accountant General
of Malaysia.
(5) notwithstanding subsection (2) and the provisions of the
Financial Procedure act 1957, the Minister may authorize the
payment into the consolidated revenue account in the Federal
consolidated Fund of all or part of the moneys of the Fund.
Non-applicability of section 14a of the Financial Procedure
Act 1957
56. section 14a of the Financial Procedure act 1957 shall not
apply to any refund under section 38 and Part vii.
PART VII
RELIEF, EXEMPTION, REFUND AND REMISSION
Power of Minister to grant relief and exemption
57. (1) The Minister may, by order in the Gazette and subject
to such conditions as he deems fit to impose, relieve any person
or class of persons from the payment of the whole or any part
of the tax which may be due and payable on any taxable supply
of goods or services or any importation of goods or class of
goods.
(2) any order made under subsection (1) shall be laid before
the dewan rakyat.
(3) The Minister may, in any particular case and subject to
such conditions as he deems fit to impose—
(a) relieve any person or class of persons from the payment
of the whole or any part of the tax which may be due
and payable on any taxable supply of goods or services
or any importation of goods or class of goods; and
(b) exempt any taxable person or class of taxable persons
from charging and collecting tax on any taxable supply
of goods or services.
(4) Where a taxable person supplies goods or services to a person
or a class of persons referred to in subsection (1) or paragraph
(3)(a), the taxable person shall be exempted from charging and
collecting tax due and payable on the supply.
(5) Where any person who is granted relief under subsection (1)
or paragraph (3)(a) fails to comply with the condition subject to
which the relief was granted, any tax that has been the subject
of the relief shall become due and payable by the person at the
time when the condition ceased to be fulfilled.
Refund of tax, etc., overpaid or erroneously paid
58. (1) any person who has overpaid or erroneously paid any
tax, penalty or surcharge may make a claim therefor in the
prescribed form to the director General within six years from
the time the overpayment or erroneous payment occurred and the
director General may refund the tax, penalty or surcharge, as the
case may be, after being satisfied that the person has properly
established the claim.
(2) The director General may reduce or disallow any refund
due under this section to the extent that the refund would unjustly
enrich the person referred to in subsection (1).
(3) notwithstanding subsection (1), where a claim involves an
amount of tax of not more than one thousand ringgit, the person
making the claim shall make an adjustment in the return under
section 41 to claim the amount of tax overpaid or erroneously
paid.
(4) a claim under this section shall be supported by such
evidence as required by the director General.
(5) except as provided by this section, the director General
shall not be liable to refund an amount paid to the person referred
to in subsection (1) by way of tax by virtue of the fact that it
was not tax due to him.
(6) This section shall not apply to a claim for refund under
sections 10, 17 and 18.
Bad debt relief
59. (1) subject to regulations made under this act, any person
who is or has ceased to be a taxable person may make a claim
to the director General for a relief for bad debt on the whole or
any part of the tax paid by him in respect of the taxable supply
if—
(a) the person has not received any payment or part of the
payment in respect of the taxable supply from the debtor
six months from the date of supply or the debtor has
become insolvent before the period of six months has
elapsed; and
(b) sufficient efforts have been made by him to recover the
debt.
(2) Where the person referred to in subsection (1)—
(a) has not received any payment in respect of the taxable
supply, the person may make a deduction or claim for
the whole of the tax paid; or
(b) has received part of the payment in respect of the taxable
supply, the person may make a deduction or claim for
an amount calculated in accordance with the following
formula:
a1 x c B
where a1 is the payment not received in respect of the
taxable supply;
B is the consideration for the taxable supply;
and
c is the tax due and payable on the taxable
supply.
(3) Where a relief for bad debt has been made by the director
General to a person and any payment in respect of the taxable
supply for which the tax is due and payable is subsequently
received by the person, the person shall repay to the director
General an amount calculated in accordance with the following
formula:
a2 x c B
where a2 is the payment received in respect of the
taxable supply;
B is the consideration for the taxable supply;
and
c is the tax due and payable on the taxable
supply.
Relief for second-hand goods
60. (1) any taxable person may, subject to the prescribed
conditions, secure a reduction of any tax chargeable on any supply
of goods of the prescribed descriptions in cases where no tax was
chargeable on the previous supply of goods.
(2) The tax chargeable on the supply of goods referred to in
subsection (1) shall be reduced to the tax charged as if the supply
of goods was for a consideration equal to the excess of x - Y,
where x is the consideration for which the goods are
supplied; and
Y is the consideration for which the goods were
acquired,
and where there is no excess, tax shall not be charged.
(3) This section shall apply to cases where the previous
supply of goods, and notwithstanding subsection (1), the previous
importation of goods took place before the appointed date.
(4) For the purposes of this section, references to a supply
of goods where no tax was chargeable include references to the
matters under paragraph 4 of the second schedule.
Recovery of tax, etc., erroneously refunded
61. Where any tax, penalty or surcharge after having been paid
has been erroneously refunded to any person, the person shall
pay the refund erroneously paid to him upon a demand made by
the director General within six years from the date on which
the refund was made.
Tourist Refund Scheme
62. (1) There shall be a scheme to be known as "Tourist refund
scheme" which allows any tourist who qualifies to claim a refund
on tax paid on certain goods purchased in Malaysia from an
approved outlet.
(2) The operation of the Tourist refund scheme shall be as
prescribed.
Remission of tax, etc.
63. (1) The Minister may remit the whole or any part of the tax
due and payable under this act where he deems fit.
(2) The director General may remit the whole or any part of
the penalty payable or surcharge accrued under this act where
it is just and equitable to do so.
(3) Where a person who has been granted remission under
subsections (1) and (2) has paid any of the tax, penalty or
surcharge to which the remission relates, he shall be entitled to
a refund of the amount of tax, penalty or surcharge which had
been remitted.
Remission of tax on goods lost, etc., under customs control
64. (1) Where any imported goods are—
(a) by unavoidable accident, lost, damaged or destroyed;
or
(b) lost through theft or evaporation,
at any time after their arrival in Malaysia but before removal
from customs control, the director General may remit the whole
or any part of any tax due and payable thereon.
(2) after removal of any goods from customs control, no
abatement of any tax charged on the importation of the goods
shall be allowed—
(a) on account of loss or damage; or
(b) on account of any claim that the weight, measure, volume
or value as determined by the director General for the
purposes of ascertaining the tax on the goods, or any
other factor affecting the goods, is incorrect,
unless notice in writing of the claim has been given to the director
General by any claimant at or before the time of the removal.
PART VIII
SPECIAL CASES
Non-application to Government
65. (1) This act shall not apply in relation to any supply of
goods or services made by—
(a) the Federal Government and state Governments, unless
the Minister otherwise directs in an order in the Gazette;
or
(b) any local authority and statutory body in respect of its
regulatory and enforcement functions.
(2) For the purpose of subsection (1), the local authority or
statutory body is taken to perform its regulatory and enforcement
functions where—
(a) the local authority or statutory body is given powers by
any written law expedient for or in connection with the
performance of its regulatory and enforcement functions;
and
(b) the supply made by the local authority or statutory body
is not of the same kind or similar to a taxable supply
made by any other person in the course or furtherance
of a business.
Agents
66. (1) Where goods or services are supplied by an agent acting
on behalf of a principal, the supply shall be deemed to be made
by the principal and not by the agent.
(2) Where goods or services are supplied to an agent acting
on behalf of a principal, the supply shall be deemed to be made
to the principal and not to the agent.
(3) Where goods or services are supplied through an agent
acting in his own name, the supply shall be treated as a supply
to the agent and as a supply by the agent.
(4) notwithstanding subsection (3), where an agent is acting in
his own name as an auctioneer and the goods are not the goods
described under subparagraph 4(7) of the First schedule—
(a) a supply by a principal who is a taxable person to the
auctioneer shall be disregarded; and
(b) the supply made by the auctioneer shall be treated as a
supply made by the principal and the auctioneer whether
or not he is a taxable person shall be liable for any tax
due and payable on the supply.
(5) Where goods or services are supplied by an agent acting
on behalf of a principal who is a taxable person and does not
belong in Malaysia, the supply shall be deemed to be made by
the agent:
Provided that the supply deemed to be made by the agent shall
not include any supply made by the agent in his own name.
(6) For the purpose of subsection (5), a person shall be treated
as not belonging in Malaysia if—
(a) he has no business establishment or other fixed establishment
in Malaysia;
(b) he has no such establishment in any country and his usual
place of residence is not in Malaysia; or
(c) he has such establishment both in Malaysia and elsewhere
and his establishment which is most directly concerned
with the supply is not in Malaysia,
and for the purposes of paragraphs (a), (b) and (c), a fixed
establishment in Malaysia or in any other country includes a
branch or an agency through which a person carries on a business
in Malaysia or in that other country, as the case may be.
(7) Where goods are imported and supplied by an agent who is
a taxable person acting on behalf of a principal who is a person
other than a taxable person, the goods shall be deemed to be
imported and supplied by the agent.
Supplies spanning change in rate or description
67. (1) notwithstanding section 11, this section shall apply where
there is a change in the—
(a) rate of tax fixed under section 10;
(b) description of the supply of goods or services determined
as zero-rated supply under section 17; or
(c) description of the supply of goods or services determined
as exempt supply under section 18.
(2) Where there is a change in the rate of tax fixed under
section 10, the rate at which tax is chargeable on any supply
spanning the change in the rate of tax shall be as follows:
(a) tax shall be charged at the old tax rate on the higher of
the following amounts:
(i) full payment or part payment received before the
date of change in the rate of tax; or
(ii) value of the supply of goods where the goods are
wholly or partly removed or made available or
services are wholly or partly performed before
the date of change in the rate of tax; and
(b) tax shall be charged at the new tax rate on the difference,
if any, between the amount of the whole supply and the
amount referred to in paragraph (a).
(3) Where there is a change in the description of the supply of
goods or services determined as zero-rated supply under section
17, the rate at which tax is chargeable on the supply spanning
the change in the description shall be as follows:
(a) in the case of a zero-rated supply being changed to a
standard rated supply and spans the change—
(i) no tax shall be charged on the higher of the
following amounts:
(aa) full payment or part payment received before
the date of change in the description; or
(bb) value of the zero-rated supply of goods where
the goods are wholly or partly removed or
made available or services are wholly or
partly performed before the date of change
in the description; and
(ii) tax shall be charged on the difference, if any,
between the amount of the whole supply and the
amount referred to in subparagraph (a)(i);
(b) in the case of a standard rated supply being changed to
a zero-rated supply and spans the change—
(i) tax shall be charged on the higher of the following
amounts:
(aa) full payment or part payment received before
the date of change in the description; or
(bb) value of the standard rated supply of the
goods where the goods are wholly or partly
removed or made available or services are
wholly or partly performed before the date
of change in the description; and
(ii) no tax shall be charged on the difference, if any,
between the amount of the whole supply and the
amount referred to in subparagraph (b)(i).
(4) Where there is a change in the description of the supply of
goods or services determined as an exempt supply under section
18, the rate at which tax is chargeable on the supply spanning
the change in the description shall be as follows:
(a) in the case of an exempt supply being changed to a
taxable supply and spans the change—
(i) no tax shall be charged on the higher of the
following amounts:
(aa) full payment or part payment received before
the date of change in the description; or
(bb) value of the exempt supply of goods where
the goods are wholly or partly removed or
made available or services are wholly or
partly performed before the date of change
in the description; and
(ii) tax shall be charged on the difference, if any,
between the amount of the whole supply and the
amount referred to in subparagraph (a)(i);
(b) in the case of a taxable supply being changed to an
exempt supply and spans the change—
(i) tax shall be charged at the old tax rate on the
higher of the following amounts:
(aa) full payment or part payment received before
the date of change in the description; or
(bb) value of the taxable supply of the goods
where the goods are wholly or partly
removed or made available or services are
wholly or partly performed before the date
of change in the description; and
(ii) no tax shall be charged on the difference, if any,
between the amount of the whole supply and the
amount referred to in subparagraph (b)(i).
(5) For the purposes of this section—
(a) any supply spanning the change in the rate of tax or
description refers to any supply where—
(i) full payment is received before the date of change
in the rate of tax or description and the goods
are wholly removed or made available or services
are wholly performed after the date;
(ii) full payment is received after the date of change
in the rate of tax or description and the goods
are wholly removed or made available or services
are wholly performed before the date;
(iii) full payment is received before the date of change
in the rate of tax or description and the goods
are partly removed or made available or services
are partly performed before and after the date;
(iv) full payment is received after the date of change
in the rate of tax or description and the goods
are partly removed or made available or services
are partly performed before and after the date;
(v) the goods are wholly removed or made available or
services are wholly performed before the date of
change in the rate of tax or description and part
payment is received before and after the date;
(vi) the goods are wholly removed or made available
or services are wholly performed after the date of
change in the rate of tax or description and part
payment is received before and after the date;
(vii) part payment is received before the date of change
in the rate of tax or description and part payment
is received after the date;
(viii) part payment is received before the date of change
in the rate of tax or description and the goods
are partly removed or made available or services
are partly performed after the date;
(ix) goods are partly removed or made available or
services are partly performed before the date of
change in the rate of tax or description and part
payment is received after the date; or
(x) goods are partly removed or made available or
services are partly performed before the date of
change in the rate of tax or description and the
goods are partly removed or made available or
services are partly performed after the date;
(b) "new tax rate" means the rate of tax applicable on the date
the change in the rate of tax comes into operation;
(c) "old tax rate" means the rate of tax applicable immediately
before the date the change in the rate of tax comes into
operation;
(d) "standard rated supply" means any supply which is
chargeable to a rate of tax fixed under section 10.
(6) any person who contravenes this section commits an
offence.
Adjustment of contracts on changes in tax
68. Where after the entering into any contract for any taxable
supply of goods or services and before the goods are supplied or
services are performed, there is a change in the rate of tax charged
on the supply, then unless express provision for the exclusion of
any such change in the tax charged is contained in the contract or
where the change in the rate of tax has been taken into account,
the contract shall be deemed to be adjusted as follows:
(a) where the change in the rate of tax renders the supply
liable to be charged with tax or increases the amount of
any tax charged or chargeable in relation to the supply,
the supplier may add to the agreed price in the contract
the amount of the tax or the increase in the tax;
(b) where the change in the rate of tax renders the supply
exempt from tax or reduces the amount of any tax charged
or chargeable in relation to the supply, the supplier may
deduct from the agreed price in the contract the amount
of the tax or the reduction of the tax.
Transfer of going concern
69. (1) Where any taxable person (hereinafter referred to as the
"transferor") transfers his business to another person (hereinafter
referred to as the "transferee") as a going concern—
(a) for the purpose of determining whether the transferee is
liable to be registered under this act, the transferee shall
be treated as having carried on the business before as
well as after the transfer and any supply by the transferor
shall be treated as supplied by the transferee; and
(b) the transferor shall transfer to the transferee, unless
otherwise permitted in writing by the officer of goods
and services tax upon the request of the transferor,
all records relating to the business as required under
section 36 and the transferee shall keep the records in
accordance with section 36.
(2) Where—
(a) a business or part thereof carried on by a taxable person
is transferred as a going concern to a transferee who
is or is to be a taxable person by virtue of the transfer
together with the assets of the business; and
(b) by virtue of the second schedule, the supply of the assets
to the taxable person is treated as neither a supply of
goods nor a supply of services,
the transferee shall be deemed to have incurred input tax on
the value of the supply of the assets and to have deducted the
input tax from any output tax due from him on the day of the
supply.
(3) For the purposes of this section, the value of the supply of
any assets under subsection (2) shall be calculated in accordance
with section 15 without the addition of tax.
(4) The transferor and transferee may claim any input tax
incurred which is incidental to the transfer of going concern.
Joint venture
70. (1) Where two or more registered persons participate in
a petroleum-related activity under a joint venture, evidenced
contractually in writing, for the purpose of making taxable supply
(hereinafter referred to as "venturers"), the venturers may apply
to the director General to be deemed as a joint venture.
(2) The venturers shall, in the application under subsection (1),
nominate one of the venturers to be the venture operator or to
appoint a joint operating company to be the venture operator.
(3) a joint operating company appointed under subsection (2)
shall be deemed to be a taxable person for the purposes of the
joint venture.
(4) Where a joint venture under subsection (1) has been
approved, the joint venture shall be registered as a registered
person and the registration shall be in the name of the venture
operator.
(5) Where a joint venture has been registered under subsection
(4)—
(a) the venture operator shall maintain a separate account
for the joint venture;
(b) any taxable supply of goods or services for the purposes of
carrying on a business of the joint venture between a venturer
and the venture operator shall be disregarded;
(c) where—
(i) each venturer acquires any taxable supply of goods
or services for the joint venture, he shall claim
the deduction of input tax on acquisitions made
by him in respect of the joint venture;
(ii) the venture operator acquires any taxable supply of
goods or services for the joint venture, he shall
claim the deduction of input tax on acquisitions
made by him in respect of the joint venture;
(d) each venturer shall account and pay for tax on the supplies
made by him in respect of the joint venture.
(6) The director General may cancel the registration of a joint
venture under subsection (4) if he deems fit for the protection of
the revenue.
(7) all venturers of the joint venture shall be liable jointly
and severally for any tax due from venture operator.
(8) Where the Minister prescribes any other activity to be
deemed as a joint venture under section 181, this section shall
apply mutatis mutandis to the prescribed activity.
(9) For the purposes of this section—
(a) "joint venture" means a contractual arrangement whereby
two or more parties undertake an economic activity that
is subject to joint control but does not include jointlycontrolled
entities;
(b) "petroleum-related activity" means an upstream activity
which begins with initial exploration including seismic
and drilling activities and ends when the product (crude
oil or natural gas) leaves the platform to be transported
to storage facilities;
(c) any petroleum-related activity which is outsourced to a
third party shall be taken as an activity undertaken and
managed by the third party and not an activity undertaken
and managed by the joint venture;
(d) "venturer" means a party to a joint venture and has joint
control over that joint venture;
(e) "venture operator" means the person who operates or
manages the joint venture.
(10) any person who contravenes subsection (5) in respect of
paragraph (d) commits an offence.
Warehousing Scheme
71. (1) Where imported goods on which tax would be chargeable
under this act are supplied while they are subject to a warehousing
scheme and before the duty point, then if there is more than one
such supply, any but the last such supply shall, except where the
contrary intention appears, be disregarded.
(2) The last supply referred to in subsection (1) shall be treated
as taking place at the duty point and the value of the supply shall
be treated as including the duty, if any.
(3) The tax on the last supply referred to in subsection (1)
shall be due and payable at the duty point, together with the
duty, if any, by the person who is required to pay the duty or,
if no duty is due and payable, by the person by whom the goods
are removed, except as may be otherwise provided by regulations
made under this act.
(4) no person shall remove from a warehousing scheme any
goods subject to tax and duty except—
(a) after payment of the tax together with the duty, if any;
(b) if the goods are in customs warehouse or licensed warehouse,
under such conditions as the director General deems fit
to impose, for deposit in another customs warehouse or
licensed warehouse; or
(c) in accordance with such conditions as the director General
deems fit to impose, for a re-export from Malaysia,
and in no case shall any goods be removed from a warehouse.
(5) any goods which are not subject to any duty shall be
construed as being under customs control if they are subject to
a warehousing scheme and shall be construed as being removed
from customs control if they are removed from a warehousing
scheme.
(6) a reference in this section to goods being subject to a
warehousing scheme shall be a reference to goods being kept in
a warehouse or being transported between warehouses without
the payment of any tax or duty and a reference to the removal
of goods from a warehouse shall be construed accordingly.
(7) For the purposes of this section—
(a) "customs warehouse" has the meaning assigned to it in
section 2 of the customs act 1967;
(b) "duty" means customs duty or excise duty or both customs
duty and excise duty;
(c) "duty free shop" has the meaning assigned to it in section
2 of the customs act 1967;
(d) "duty point" in relation to any goods, means the time
when the goods are removed from the warehousing
scheme;
(e) "inland clearance depot" has the meaning assigned to it
in section 2 of the customs act 1967;
(f) "licensed warehouse" has the meaning assigned to it in
section 2 of the customs act 1967;
(g) "warehouse" means —
(i) any customs warehouse;
(ii) any licensed warehouse;
(iii) any duty free shop;
(iv) any inland clearance depot.
(8) any person who contravenes subsection (4) commits an
offence.
Approved Trader Scheme
72. (1) There shall be a scheme to be known as "approved
Trader scheme" which allows the director General to suspend
the payment of tax chargeable on the goods imported by any
taxable person who qualifies at the time of importation provided
that the goods are imported in the course or furtherance of his
business.
(2) any taxable person granted an approval under the approved
Trader scheme shall account the suspended payment of tax together
with the tax chargeable on the supply of goods or services made
by him in the return for the taxable period to which the suspension
relates subject to the prescribed conditions.
Approved Toll Manufacturer Scheme
73. (1) There shall be a scheme to be known as "approved
Toll Manufacturer scheme" which allows any taxable person
who qualifies to disregard the supply of goods which comprises
the treatment or processing of goods for and to a person who
belongs in a country other than Malaysia subject to the prescribed
conditions (hereinafter referred to as the "toll manufacturer").
(2) any person who belongs to Malaysia and receives the
treated or processed goods from the toll manufacturer (hereinafter
referred to as the "recipient") shall account and pay for tax as
if the recipient had himself supplied and acquired the goods in
Malaysia in the course or furtherance of his business and as if
the supply were a taxable supply.
(3) notwithstanding section 11, the supply of the treated or
processed goods shall be regarded as taking place at the earlier
of the following times:
(a) whenever a payment in respect of the supply is made;
or
(b) whenever the recipient receives an invoice relating to the
supply.
(4) The recipient shall—
(a) if he is a taxable person, include the tax due and payable
in his return; or
(b) if he is not a taxable person, be liable for the tax.
(5) The recipient shall account and pay for the tax as if the
tax were a tax on a supply made by him.
(6) For the purposes of this section, a person shall be treated
as belonging in a country if—
(a) he has in that country a business establishment or fixed
establishment and no such establishment elsewhere;
(b) he has no such establishment in any country but his usual
place of residence is in that country; or
(c) he has such establishments both in that country and
elsewhere and his establishment which is most directly
concerned with the supply is in that country.
(7) For the purposes of subsection (6), a fixed establishment
in any country includes a branch or an agency through which a
person carries on a business in that country.
Approved Jeweller Scheme
74. (1) There shall be a scheme to be known as "approved
Jeweller scheme" which allows any taxable person who qualifies
to treat a prescribed supply of goods to him as if he had himself
supplied and acquired the goods in the course or furtherance of his
business (hereinafter referred to as the "approved jeweller").
(2) Where any taxable person makes any prescribed supply of
goods to the approved jeweller and the prescribed supply of goods
is a taxable supply (hereinafter referred to as the "supplier"), tax
on the prescribed supply of goods shall not be accounted by the
supplier subject to the prescribed conditions.
(3) The approved jeweller who receives the prescribed supply
of goods from the supplier shall account and pay for the tax as
if he himself had supplied and acquired the goods in Malaysia in
the course or furtherance of his business and as if the prescribed
supply of goods were a taxable supply.
(4) notwithstanding section 11, the prescribed supply of goods
shall be treated as taking place at the earlier of the following
times:
(a) whenever a payment in respect of the prescribed supply
of goods is made; or
(b) when the approved jeweller receives an invoice relating
to the supply.
(5) The approved jeweller shall account and pay for the tax
as if the tax were a tax on the prescribed supply of goods made
by him.
Flat Rate Scheme
75. (1) There shall be a scheme to be known as "Flat rate
scheme" which allows any person who qualifies and is carrying
on a business involving the prescribed activities (hereinafter
referred to as the "approved person") to include a prescribed flat
rate addition in the consideration for any taxable supply of goods
made by him from the prescribed activities to any registered
person in the course or furtherance of the business.
(2) The approved person shall not—
(a) account for the prescribed flat rate addition; and
(b) be entitled to credit for input tax against output tax under
section 38.
(3) The registered person shall be entitled to a credit for input
tax against output tax under section 38 on any taxable supply
of goods acquired from the approved person from the prescribed
activities under the Flat rate scheme equal to the prescribed flat
rate addition on the supply.
Equity and futures market
76. (1) a holder of a capital Market services Licence and
holders of a capital Market services representative’s Licence
shall be treated as a single entity for the purpose of registration
under this act:
Provided that the holder of a capital Market services Licence
is a taxable person.
(2) The registration of the single entity shall be in the name
of the holder of the capital Market services Licence and the
holder of the capital Market services Licence shall be the lead
member of the single entity.
(3) Where the holder of a capital Market services Licence
and holder of a capital Market services representative’s Licence
have been registered as a single entity—
(a) the holders of the capital Market services representative’s
Licence shall be members of the single entity;
(b) any taxable supply of goods or services in carrying on
a business of dealing in securities or trading in futures
contracts between members and lead member of the
single entity shall be disregarded;
(c) any business of dealing in securities or trading in futures
contracts transacted by a member of the single entity shall
be treated as a supply made by the lead member;
(d) any supply of goods and services in carrying on a business
of dealing in securities or trading in futures contracts
made to a member of the single entity shall be treated
as a supply made to the lead member;
(e) the lead member of the single entity shall maintain separate
account for each member of his single entity;
(f) the lead member of the single entity shall be liable on any
taxable supply made by the single entity in carrying on
a business of dealing in securities or trading in futures
contracts;
(g) any input tax allowable to any member of the single
entity in carrying on a business of dealing in securities
or trading in futures contracts shall be claimed by the
lead member on behalf on the members of the single
entity.
(4) For the purpose of this section—
(a) "capital Market services Licence" has the meaning
assigned to it in section 2 of the capital Markets and
services act 2007 [Act 671];
(b) "capital Market services representative’s Licence" has
the meaning assigned to it in section 2 of the capital
Markets and services act 2007.
PART IX
GOODS AND SERVICES TAX RULING
Public ruling
77. (1) The director General may, at any time, make a public
ruling on the application of any provision of this act in relation
to any person or class of persons, or any type of arrangement.
(2) The director General may withdraw, either wholly or partly,
any public ruling made under this section.
(3) notwithstanding any provision of this act, where a public
ruling in subsection (1) applies to any person in relation to an
arrangement and the person applies the provision in the manner
stated in the ruling, the director General shall apply the provision
in relation to the person and the arrangement in accordance with
the ruling.
Advance ruling
78. (1) subject to this section and any regulations made under
this act, on the application made by any person, the director
General shall make an advance ruling on the application of any
provision of this act to the person and to the arrangement for
which the ruling is sought and the ruling shall take effect from
the date as specified in the ruling.
(2) an application under subsection (1) shall be made in such
manner and form as the director General may determine and
subject to the prescribed fees.
(3) notwithstanding any provision of this act, where an advance
ruling applies to any person in relation to an arrangement and the
person applies the provision in the manner stated in the ruling,
the director General shall apply the provision in relation to the
person and the arrangement in accordance with the ruling.
(4) an advance ruling made under subsection (1) does not
apply to a person in relation to an arrangement if—
(a) the arrangement is materially different from the arrangement
stated in the ruling;
(b) there was a material omission or misrepresentation in, or
in connection with the application of the ruling;
(c) the director General makes an assumption about a future
event or another matter that is material to the ruling,
and that assumption subsequently proves to be incorrect;
or
(d) the person fails to satisfy any of the conditions stipulated
by the director General.
Finality of an advance ruling
79. (1) an advance ruling issued to any person for the purpose
of any arrangement shall be final.
(2) no appeal shall be lodged by any person against any
advance ruling.
Receiving two advance rulings
80. Where an applicant receives two or more different advance
rulings on the same subject matter, the rulings shall be deemed
as being void and the applicant shall immediately notify the
director General who shall, within thirty days from the date of
the notification, issue a new advance ruling.
Ruling not applicable when provision of the Act is amended
or repealed
81. a ruling shall not apply from the date a provision of this
act is amended or repealed to the extent that the amendment or
repeal changes the way the provision applies in the ruling.
PART X
ENFORCEMENT
Powers of inspection and investigation
82. any senior officer of goods and services tax shall have all
the powers necessary to carry out an inspection and to investigate
the commission of any offence under this act.
Access to place or premise
83. (1) any senior officer of goods and services tax shall for the
purposes of this act at all times have full and free access to any
place or premises where any person carries on his business.
(2) Where any senior officer of goods and services tax exercises
his powers under subsection (1), the person who carries on his
business or any other person present at the place or premise at
that time of entry shall provide to him all reasonable facilities
and assistance for the exercise of his duties under this section.
(3) Where any senior officer of goods and services tax enters
upon any place or premises in accordance with this section, he
may—
(a) require the taxable person or any other person to produce
any goods, document or thing which relates to the
person’s business and, if he is a taxable person, any
record which is required to be kept under section 36;
(b) examine any goods, document or thing;
(c) seize and detain any goods, document or thing if in his
opinion it may afford evidence of the commission of
any offence under this act;
(d) require the person to answer any question relating to any
goods, document or thing;
(e) require any container, envelope or other receptacle in the
place or premises to be opened;
(f) at the risk and expense of the owner of the business, open
and examine any package, or any goods or material in
the place or premises; or
(g) take samples of any goods or material and make copies
or extracts of any document, if he deems necessary.
(4) Where any senior officer of goods and services tax is unable
to obtain full and free access to the place or premises under
subsection (1) or to any receptacle contained therein, he may, at
any time, enter the place or premises and open the receptacle by
force if necessary.
(5) any person who refuses to permit any senior officer of
goods and services tax to enter upon any place or premises in
accordance with this section commits an offence and shall, on
conviction, be liable to imprisonment for a term not exceeding
seven years or to a fine not exceeding one hundred thousand
ringgit or to both.
Access to recorded information or computerized data
84. (1) any senior officer of goods and services tax exercising
his powers under sections 82, 83 and 86 and any officer of goods
and services tax exercising his powers under section 87 shall be
given access to any recorded information or computerized data,
whether stored in a computer or otherwise.
(2) in exercising his powers, the senior officer of goods and
services tax or the officer of goods and services tax, as the case
may be—
(a) may inspect and check the operation of any computer
and any associated apparatus or material which he
has reasonable cause to suspect is or has been used in
connection with that information or data; and
(b) may require—
(i) the person by whom or on whose behalf, the officer
has reasonable cause to suspect, the computer is
or has been so used; or
(ii) the person having charge of, or is otherwise
concerned with, the operation of the computer,
apparatus or material,
to provide him with such reasonable assistance as he may require
for the purposes of this section.
(3) The senior officer of goods and services tax or the officer
of goods and services tax, as the case may be, may make copies
or take extracts of the recorded information or computerized data
if he deems necessary.
(4) For the purposes of subsection (1), "access" includes being
provided with the necessary password, encryption code, decryption
code, software or hardware and any other means required to
enable comprehension of recorded information or computerized
data.
Magistrate may issue search warrant
85. (1) Whenever it appears to any Magistrate, upon written
information upon oath and after any inquiry which he may think
necessary, that there is reasonable cause to believe that in any
place, premises or conveyance, there are concealed or deposited
any goods, document or thing which may afford evidence of the
commission of an offence under this act, the Magistrate may
issue a warrant authorizing any officer of goods and services tax
named therein, at any time and with or without assistance—
(a) to enter the place, premises or conveyance and to search
for and seize the goods, document or thing;
(b) to arrest any person or persons being in the place, premises
or conveyance in whose possession the goods, document
or thing are found or who may reasonably be suspected
as having concealed or deposited such goods, document
or thing.
(2) The officer of goods and services tax authorized under
subsection (1) may, if it is necessary so to do—
(a) break open any outer or inner door of the place, premises
or conveyance and enter every part thereof, if necessary
forcibly;
(b) remove by force any obstruction to the entry to search
or to seize as he is empowered to effect; and
(c) detain every person found in the place, premises or
conveyance until the search has been completed.
When search may be made without warrant
86. Whenever it appears to the senior officer of goods and
services tax that there is reasonable cause to believe that in any
place, premises or conveyance there are concealed or deposited
any goods, document or thing which may afford evidence of the
commission of any offence under this act and if he has reasonable
grounds for believing that by reason of the delay in obtaining
a search warrant the goods, document or thing are likely to be
removed, he may exercise in, upon and in respect of the place,
premises or conveyance all the powers under section 85 in the
same manner as if he was empowered so to do by a warrant
issued under that section.
Power to stop and search conveyance
87. (1) The officer of goods and services tax may stop and
examine any conveyance for the purposes of ascertaining whether
any goods in respect of which he has reason to believe that an
offence under this act has been committed are contained therein
and the person in control or in charge of the conveyance shall,
if required so to do by the officer of goods and services tax—
(a) stop the conveyance and allow the officer of goods and
services tax to examine it;
(b) move the conveyance to another place for examination;
and
(c) not proceed until permission to do so has been given by
the officer of goods and services tax.
(2) The person in control or in charge of the conveyance
examined under this section shall, on the request of the officer
of goods and services tax, open all parts of the conveyance for
examination by the officer of goods and services tax and take
all measures necessary to enable the examination as the officer
of goods and services tax considers necessary to be made.
Seizure of goods, etc., the subject of an offence
88. (1) all goods, document or thing in respect of which the
officer of goods and services tax has reasonable cause to suspect
that there has been committed any offence under this act or any
violation of any of the provisions of this act and any receptacle,
package or conveyance (if the conveyance is a vessel, the vessel
is not exceeding two hundred tons net registered tonnage or if
the conveyance is an aircraft, the aircraft is other than an aircraft
engaged in international carriage) in which the goods, document or
thing may have been found or which has been used in connection
with the offence or violation, and any other goods, document or
thing which may reasonably be believed to have a bearing on the
case, may be seized by the officer of goods and services tax in
any place either on land or in the territorial waters.
(2) Whenever any goods, document, thing, receptacle, package
or conveyance are seized under this act, the officer of goods and
services tax shall forthwith give notice in writing of the seizure
and the grounds therefor to the owner of the goods, document,
receptacle, package or conveyance, if known, either by delivering
the notice to him personally or by post at his place of abode, if
known.
(3) This section relating to the seizure of—
(a) any goods, document or thing shall apply to all the contents
of any receptacle, package or conveyance in which the
same are found and to any article used to conceal the
same;
(b) any conveyance shall apply to the tackle, equipment and
furnishings of the conveyance and if the conveyance is
an animal vehicle, to any animal by which the same is
drawn.
(4) any goods of a perishable nature or any animals seized
under this section may forthwith be sold and the proceeds of the
sale held to abide the result of any prosecution or claim.
List of goods, etc., seized
89. (1) except as provided in subsection (2), where any seizure
is made under this Part, the senior officer of goods and services
tax or the officer of goods and services tax, as the case may
be, shall prepare a list of the goods, document or thing seized
and immediately deliver a copy signed by him to the occupier
of the place or premises or the owner of the conveyance which
has been searched or to any other person present at the place,
premises or conveyance.
(2) Where the place or premises are unoccupied, the officer
shall, whenever possible, post a list of the goods or document
seized conspicuously at the place or premises.
Return or disposal of movable goods
90. (1) Where any movable goods has been seized under this
Part, a senior officer of goods and services tax may, at his
discretion—
(a) temporarily return the movable goods to the owner thereof
or to the person from whose possession, custody or control
it was seized, or to any person as the senior officer of
goods and services tax may consider entitled thereto,
subject to such terms and conditions as the senior officer
of goods and services tax may impose, and, subject in
any case, to sufficient security being furnished to the
satisfaction of the senior officer of goods and services
tax that the movable goods shall be surrendered to the
senior officer of goods and services tax on demand
being made by the senior officer of goods and services
tax and that the said terms and conditions, if any, shall
be complied with;
(b) return the movable goods to the owner thereof or to the
person from whose possession, custody or control it
was seized, or to such person as the senior officer of
goods and services tax may consider entitled thereto,
with liberty for the person to whom the movable goods
is so returned to dispose of the same, the return being
subject to security being furnished to the satisfaction of
the senior officer of goods and services tax in an amount
not less than an amount which, in the opinion of the
senior officer of goods and services tax, represents—
(i) the value of the movable goods, on the date on
which the goods are so returned; and
(ii) the tax due and payable in respect thereof,
for the payment of the amount secured to the director General
in the event of the court making an order for the forfeiture under
section 123; or
(c) sell or destroy the movable goods, as appropriate in the
circumstances, where it is a living creature or where, in
the opinion of the senior officer of goods and services
tax, it is of a perishable or dangerous nature or likely
to speedily deteriorate in quality or value, and where it
is sold, he shall hold the proceeds of sale to abide the
result of any prosecution or claim.
(2) Whenever any movable goods are returned or disposed
under subsection (1), a document purporting to be a certificate in
accordance with subsection 118(1) shall be issued by the senior
officer of goods and services tax.
(3) any person who—
(a) fails to surrender on demand to a senior officer of goods
and services tax the movable goods temporarily returned
to him under paragraph (1)(a); or
(b) fails to comply with or contravenes any of the terms or
conditions imposed under paragraph (1)(a),
commits an offence and shall, on conviction, be liable to a fine
not exceeding ten thousand ringgit or to imprisonment for a term
not exceeding one year or to both.
(4) The criminal liability of any person under subsection (3)
shall be in addition to any other liability that the said person
or any other person may incur under the terms and conditions
relating to the return of the movable goods under paragraph (1)(a).
(5) The provisions of subsection (3) shall not apply to the
person, if any, who is the guarantor or surety of the person to
whom the goods is returned under paragraph (1)(a).
(6) The Minister may, either generally or in any particular case
or class of cases, give such directions to the director General as
he may deem necessary or expedient with regard to the exercise of
the powers conferred on the senior officer of goods and services
tax under subsection (1).
(7) no person shall be entitled to maintain any action on
account of any act done or any decision taken by or on behalf
of the Minister or by or on behalf of a senior officer of goods
and services tax under this section, and no court shall have any
jurisdiction to entertain any such action.
(8) For the purposes of this section, "movable goods" includes
any description of movable goods whatsoever seized under this
act.
Powers of arrest
91. (1) any officer of goods and services tax may arrest without
warrant—
(a) any person found committing or attempting to commit, or
employing or aiding any person to commit or abetting
the commission of, an offence under this act;
(b) any person whom he may reasonably suspect to have in
his possession any goods, document or thing liable to
seizure under this Part;
(c) any person whom he may reasonably suspect to have
committed an offence under this act,
and the officer of goods and services tax may search or cause
to be searched any person so arrested:
Provided that—
(a) any person so arrested who requests that his person be
searched in the presence of a senior officer of goods
and services tax shall not be searched except in the
presence of and under the supervision of the officer,
but the person may be detained until the arrival of the
officer, or taken to any office or police station where
the officer may be found;
(B) the goods and baggage of any person who requests to be
present when they are searched and so presents himself
within a reasonable time shall not be searched except
in his presence;
(c) no person shall be searched except by another person of
the same gender, and such search shall be conducted
with strict regard to decency.
(2) any officer of goods and services tax making an arrest
under subsection (1) shall, without unnecessary delay, bring the
person arrested to the nearest police station, and thereafter the
person shall be dealt with in accordance with the law relating to
criminal procedure for the time being in force.
(3) if any person liable to arrest under this act is not arrested
at the time of committing the offence for which he is so liable, or
after the arrest makes his escape, he may at any time thereafter
be arrested and dealt with as if he had been arrested at the time
of committing the offence.
(4) a senior officer of goods and services tax may cause to be
taken photographs, finger, thumb impressions and any other form
of identification that may be required under any other written
law of any person charged with an offence against this act.
(5) every person so arrested may be released from
custody—
(a) on his depositing such reasonable sum of money as the
senior officer of goods and services tax may require;
(b) on his executing a bond, with such surety or sureties, as
the senior officer of goods and services tax may require;
or
(c) on his depositing such reasonable sum of money as the
senior officer of goods and services tax may require and
his executing a bond, with such surety or sureties, as the
senior officer of goods and services tax may require.
(6) any person who has been released from custody under
subsection (5) may be arrested without warrant by any officer
of goods and services tax—
(a) if the officer has reasonable grounds for believing that
any condition on or subject to which the person was
released or otherwise admitted to bail has been or is
likely to be breached; or
(b) on being notified in writing by the surety of the person
that the person is likely to breach any condition on
or subject to which the person was released and that
the surety wishes to be relieved of his obligation as
surety.
Power to examine persons
92. (1) a senior officer of goods and services tax investigating
an offence under this act may—
(a) order any person who appears to be acquainted with the
facts and circumstances of the case to attend before him
for the purpose of being examined orally in relation
to any matter which may, in his opinion, assist in the
investigation into the offence; or
(b) order any person to produce before him any document
or any certified copy of the document or any other
article or thing which may, in his opinion, assist in the
investigation into the offence.
(2) Paragraph (1)(b) shall not apply to banker’s books.
(3) a person to whom an order under paragraph (1)(a) has
been given shall—
(a) attend in accordance with the terms of the order to be
examined, and shall continue to attend from day-to-day
where so directed until the examination is completed;
and
(b) during the examination, be bound to answer all questions
relating to the case put to him and shall be legally
bound to state the truth, whether or not the answer is
made wholly or partly in answer to questions but he
may refuse to answer any question the answer to which
would have a tendency to expose him to a criminal
charge or penalty or forfeiture.
(4) a person to whom an order has been given under paragraph
(1)(b) shall not conceal, destroy, alter, remove from Malaysia, or
deal with, expend, or dispose of, any document, article or thing
specified in the order, or alter or deface any entry in document,
article or thing, or cause the act to be done, or assist or conspire
to do the act.
(5) a person to whom an order is given under subsection (1)
shall comply with the order and with the requirements of
subsections (3) and (4) notwithstanding any written law to the
contrary.
(6) a statement made by any person in the course of an
investigation under this act whether or not a caution has been
administered to him under subsection 93(3) shall be recorded in
writing by the senior officer of goods and services tax examining
him and the statement so recorded shall be read to and signed
by the person, and where the person refuses to sign the record,
the senior officer of goods and services tax shall endorse on it
under his hand the fact of the refusal and the reason for it, if
any, stated by the person examined.
(7) The record of an examination made in the course of an
investigation under this act or any document, article or thing
produced under paragraph (1)(a), shall, notwithstanding any
written law to the contrary, be admissible in evidence in any
proceedings under this act in any court—
(a) for an offence under this act; or
(b) for the forfeiture of goods under section 123 or 124,
regardless whether the proceedings are against the person who
was examined, or who produced the document, article or thing,
or against any other person.
(8) any person who contravenes subsection (4) or (5) commits
an offence.
Admissibility of statements in evidence
93. (1) in any trial or inquiry by a court into an offence under
this act, any statement, whether the statement amounts to a
confession or not or whether it is oral or in writing, made at any
time, whether before or after the person is charged or whether in
the course of an investigation under this act or not, and whether
or not wholly or partly in answer to questions, by an accused
person to or in the hearing of any officer of goods and services
tax, and whether or not interpreted to him by any officer of goods
and services tax or any other person, shall, notwithstanding any
written law to the contrary, be admissible at his trial in evidence
and, if the person tenders himself as a witness, the statement may
be used in cross-examination and for the purpose of impeaching
his credit.
(2) no statement made under subsection (1) shall be admissible
or used in cross-examination or for the purpose of impeaching
the credit of the person making the statement if the making of
the statement appears to the court to have been caused by any
inducement, threat or promise having reference to the charge
against the person, proceeding from a person in authority and
sufficient in the opinion of the court to give the person grounds
which would appear to him reasonable for supposing that by
making it he would gain any advantage or avoid any evil of a
temporal nature in reference to the proceedings against him.
(3) Where any person is arrested for an offence under this
act, he shall be cautioned in the following words or words to
the like effect:
"it is my duty to warn you that you are not obliged to say
anything or to answer any question, but anything you say, whether
in answer to a question or not, may be given in evidence".
(4) a statement made by any person accused of an offence
under this act made before there is time to caution him shall
not be rendered inadmissible in evidence merely by reason of no
such caution having been administered if it has been administered
as soon as possible.
(5) notwithstanding anything to the contrary contained in
any written law, a person accused of an offence under this act
to which subsection (1) applies, shall not be bound to answer
any question relating to the case after any caution referred to in
subsection (3) has been administered to him.
PART XI
OFFENCES AND PENALTIES
Penalty for incorrect return
94. any person who—
(a) makes an incorrect return by omitting from the return
any information;
(b) understates any output tax or overstates any input tax in
a return; or
(c) gives any incorrect information in relation to any matter
affecting his own liability to tax or the liability to tax
of any other person,
commits an offence and shall, on conviction, be liable—
(a) to a fine not exceeding fifty thousand ringgit or to
imprisonment for a term not exceeding three years or
to both; and
(B) to a penalty equal to the amount of tax which has been
undercharged or would have been so undercharged if the
return or information had been accepted as correct.
Penalty for evasion of tax, fraud
95. (1) any person who with intent to evade or to assist any
other person to evade tax—
(a) omits from a return any information in relation to any
matter affecting the amount of his or the other person’s
chargeability to tax;
(b) makes any false statement or entry in any return;
(c) gives any false answer whether in writing or otherwise
to any question asked or request for information made
in accordance with the provisions of this act;
(d) prepares or maintains or authorizes the preparation
or maintenance of any false books of account, false
invoices or other false records, or falsifies or authorizes
the falsification of any books of accounts, invoices or
records; or
(e) makes, uses or authorizes the use of any fraud, art or
contrivance,
commits an offence and shall, on conviction, be liable—
(a) for the first offence, to a fine of not less than ten times
and not more than twenty times the amount of tax or
to imprisonment for a term not exceeding five years or
to both; and
(B) for a second or subsequent offence, to a fine of not
less than twenty times and not more than forty times
the amount of tax or to imprisonment for a term not
exceeding seven years or to both:
Provided that where the amount of tax cannot be ascertained,
the person shall be liable to a fine of not less than fifty thousand
ringgit and not more than five hundred thousand ringgit or to
imprisonment for a term not exceeding seven years or both.
(2) any person who assists in, or advises with respect to,
the preparation of any return where the return results in an
understatement of the liability for tax of another person shall,
unless he satisfies the court that the assistance or advice was given
with reasonable care, commits an offence and shall, on conviction,
be liable to a fine of not less than two thousand ringgit and not
more than twenty thousand ringgit or to imprisonment for a term
not exceeding three years or to both.
(3) any reference in this section in relation to a person who
makes, uses or authorizes the use of any fraud, art or contrivance
includes a reference to a person who, without the authority of
the officer of goods and services tax—
(a) destroys, damages, erases, alters or manipulates data
stored in, or used in connection with, a computer; or
(b) introduces into, or records or stores in, a computer by
any means data for the purpose of—
(i) destroying, damaging, erasing, altering or manipulating
data stored in, or used in connection with, a
computer; or
(ii) interfering with, interrupting or obstructing the
lawful use of the computer or the data stored in,
or used in connection with, a computer; or
(c) otherwise uses a computer,
the purpose or effect of which is to evade tax.
(4) For the purposes of subsection (3), "data" includes any
computer programme or part of a computer programme.
(5) any reference in this section relating to evading tax includes
a reference to obtaining any of the following:
(a) credit for input tax against output tax under section 38;
(b) relief for bad debt under section 59; and
(c) claim under the Tourist refund scheme under
section 62,
where the person concerned is not entitled to the credit, relief
or claim.
(6) in any prosecution under this section, any evasion of tax
shall be deemed to be with the knowledge of the accused unless
the contrary be proved by the accused.
Penalty for improperly obtaining refund, etc.
96. any person who causes or attempts to cause the refund under
subsection 10(4), 17(6), 18(4), 38(3), 58(1), 62(1) or 194(1) or
entitlement to relief under subsection 59(1) to any person by the
director General of any amount in excess of the amount properly
so refundable or relieved to him commits an offence and shall,
on conviction, be liable—
(a) to a fine not exceeding fifty thousand ringgit or to
imprisonment for a term not exceeding three years or
to both; and
(b) to a penalty of two times the amount refunded or entitled
as a relief in excess of the amount properly so refundable
or so entitled as a relief.
Penalty for offences in relation to goods, invoices and
receipts
97. (1) any person who acquires possession of or deals with any
goods, or accepts the supply of any services, having reasonable
cause to believe that tax on the supply of goods or services or on
the importation of the goods has been or will be evaded, commits
an offence and shall, on conviction, be liable—
(a) to a fine not exceeding thirty thousand ringgit or to
imprisonment for a term not exceeding two years or to
both; and
(b) to a penalty of two times the amount of the tax.
(2) in any prosecution under subsection (1), any evasion of tax
shall be deemed to be with the knowledge of the accused unless
the contrary be proved by the accused.
(3) any person other than a registered person who issues an
invoice or a receipt showing an amount as being tax or as being
attributable to tax commits an offence and shall, on conviction,
be liable—
(a) to a fine not exceeding thirty thousand ringgit or to
imprisonment for a term not exceeding three years or
to both; and
(b) to a penalty of two times the amount of tax so shown.
Penalty for obstructing, etc., officer of goods and services
tax
98. any person who—
(a) in any way assaults, hinders or obstructs the officer of
goods and services tax in the performance of his duties
under this act; or
(b) fails to give reasonable facilities or assistance to any
officer of goods and services tax in the performance of
his duties under this act,
commits an offence and shall, on conviction, be liable to
imprisonment for a term not exceeding seven years or to a fine
not exceeding one hundred thousand ringgit or to both.
Penalty for refusing to answer question or giving false
information
99. (1) any person who, being required under this act to give
any information which may reasonably be required by the officer
of goods and services tax which it is in his power to give, refuses
to give the information or furnishes as true information which he
knows or has reason to believe to be false commits an offence.
(2) When any of the information is proved to be untrue or
incorrect in whole or in part it shall be no defence to allege
that the information or any part of the information was furnished
inadvertently or without criminal or fraudulent intent, or was
misinterpreted or not fully interpreted by an interpreter provided
by the informant.
Penalty for offences by authorized and unauthorized
persons
100. any person who—
(a) being a person appointed for the due administration of
this act or any assistant employed in connection with
the assessment and collection of tax—
(i) withholds for his own use or otherwise any portion
of the amount of tax or penalties collected;
(ii) otherwise than in good faith, demands from any
person an amount in excess of the authorized
assessment or tax or penalties;
(iii) submits any false return, statement or report,
whether in writing or otherwise, of the amount
of tax or penalty collected or received by him;
or
(iv) defrauds any person, embezzles any money or
otherwise uses his position so as to deal wrongfully
either with the director General or any other
individual; or
(b) not being authorized under this act to do so collects or
attempts to collect any tax or penalty under this act,
commits an offence and shall, on conviction, be liable to a fine
not exceeding fifty thousand ringgit or to imprisonment for a
term not exceeding three years or to both.
Attempts and abetments
101. any person who attempts to commit any offence punishable
under this act, or abets the commission of the offence, shall be
punishable with the punishment provided for the offence.
General penalty
102. any person who commits an offence under this act for
which no penalty is expressly provided shall, on conviction,
be liable to a fine not exceeding thirty thousand ringgit or to
imprisonment for a term not exceeding two years or to both.
Offences by bodies of persons, etc.
103. (1) Where a company, a firm, a society, an association or
other body of persons commits an offence under this act, any
person who at the time of the commission of the offence was a
director, partner, manager, secretary or other similar officer of
the company, firm, society, association or other body of persons
or was purporting to act in the capacity or was in any manner
or to any extent responsible for the management of any of the
affairs of the company, firm, society, association or other body of
persons or was assisting in the management, shall be deemed to
be guilty of the offence unless, having regard to the nature of his
functions in that capacity and to all circumstances, he proves—
(a) that the offence was committed without his knowledge,
consent or connivance; and
(b) that he took all reasonable precautions and had exercised due
diligence to prevent the commission of the offence.
(2) Where any person would be liable under this act to any
punishment, penalty or forfeiture for any act, omission, neglect
or default, he shall be liable to the same punishment, penalty or
forfeiture for every such act, omission, neglect or default of any
employee or agent, or of the employee of the agent provided that
the act, omission, neglect or default was committed by—
(a) the employee in the course of his employment;
(b) the agent when acting on behalf of the person; or
(c) the employee of the agent when acting in the course
of his employment in such circumstances that had the
act, omission, neglect or default been committed by the
agent, his principal would have been liable under this
section.
Tax, etc., to be payable notwithstanding any proceedings,
etc.
104. The institution of proceedings or the imposition of a
penalty, fine or term of imprisonment under this act or the
compounding of an offence under section 127 shall not relieve
any person from the liability to pay for tax, penalty or surcharge
under this act.
PART XII
TRIALS AND PROCEEDINGS
Prosecution
105. no prosecution for an offence under this act shall be
instituted except by or with the written consent of the Public
Prosecutor.
Jurisdiction to try offences
106. Notwithstanding any written law to the contrary, a Sessions
Court shall have jurisdiction to try any offence under this Act
and to impose the full punishment for the offence.
Conviction under any other law
107. Nothing in this Act shall prevent the prosecution, conviction
and punishment of any person according to the provisions of any
other written law for the time being in force.
Burden of proof
108. If in any prosecution in respect of any goods seized for nonpayment
of tax or for any cause of forfeiture or for the recovery
of any penalty under this Act, any dispute arises whether tax has
been paid in respect of the goods, or whether the supply of goods
or services or importation of goods is exempt from or not liable
to any tax chargeable under this Act or is subject to tax at the
rate of zero percent or any value upon which tax is chargeable
under this Act, or any amount of tax chargeable under this Act
is subject to any deduction or set-off or any amount should be
deducted as input tax, or whether the goods or services had been
lawfully supplied or the goods had been lawfully imported, or
concerning the place from where those goods were brought, the
burden of proof of every such case shall lie on the accused in
the prosecution or the person making the claims.
Evidential provisions
109. (1) In any proceedings under this Act any statement purporting
to be signed by the Director General or an officer authorized
by him which forms part of or is annexed to the information,
complaint or statement of claim, shall, until the contrary is proved,
be evidence of any fact stated therein.
(2) A transcript of any particulars contained in a return or
other document relating to tax, if it is certified under the hand
of the Director General or an officer authorized by him to be a
true copy of the particulars, shall be admissible in evidence as
proof of those particulars.
(3) No statement made or document produced by or on behalf
of any person shall be inadmissible in evidence against the person
in any proceedings against him to which this section applies, by
reason only of the fact that he was or may have been induced to
make the statement or produce the document by any inducement,
promise or threat made by any person having any official duty
under, or being appointed for the due administration of, this
Act.
(4) Nothing in this Act shall—
(a) affect the operation of Chapter IX of Part III of the
Evidence Act 1950; or
(b) be construed as requiring or permitting any person to
produce or give to a court, the Chairman of the Goods
and Services Tax Appeal Tribunal, the Director General
or any other person any document, thing or information
on which by the Chapter or those provisions he would
not be required or permitted to produce or give to a
court.
(5) For the purposes of section 95, where in any proceedings
it is proved that any false statement or entry has been made in
any return rendered under this Act by or on behalf of any person
or in any books of account or records of any person—
(a) the person shall be presumed, until the contrary is proved,
to have made the false statement or entry or to have
caused the false statement or entry to be made or to have
allowed it to be made with intent to evade the payment
of tax or to obtain a refund of tax to which the person
is not entitled, as the case may be; and
(b) any other person who made any the false statement or
entry shall be presumed, until the contrary is proved,
to have made the false statement or entry with intent to
assist the first-mentioned person to evade the payment
of tax or to obtain a refund of tax to which he is not
entitled.
(6) Where any officer of goods and services tax has obtained
any document or other evidence in exercise of his powers
under this Act, the document or copy of the document or other
evidence, as the case may be, shall be admissible in evidence in
any proceedings under this Act, notwithstanding anything to the
contrary in any written law.
(7) Where any document which is to be used in any proceedings
against any person for an offence under this Act is in a language
other than the national language or English language, a translation
of the document into the national language or English language
shall be admissible in evidence where the translation is accompanied
by a certificate of the person who translated the document setting
out that it is an accurate, faithful and true translation and the
translation had been done by the person at the instance of any
officer of goods and services tax.
(8) Subsection (7) shall apply to a document which is translated,
regardless of whether the document was made in or outside
Malaysia, or whether the translation was done in or outside
Malaysia, or whether possession of the document was obtained by
any officer of goods and services tax in or outside Malaysia.
Evidentiary value of copies of electronic notice
110. (1) For the avoidance of doubt, any electronic notice or any
electronic record of an electronic notice or any copy or print out
thereof shall not be inadmissible in evidence merely on the basis
that it was filed, lodged or transmitted through the electronic
service, without the delivery of any equivalent document or
counterpart in paper form.
(2) Notwithstanding any other written law, in any proceedings
under this Act, any electronic notice or any electronic record
of an electronic notice or any copy or print out thereof which
is—
(a) certified by the Director General to contain all or any
information filed, lodged or transmitted through the
electronic service in accordance with this Part; and
(b) duly authenticated in the manner specified in section 172
or is otherwise authenticated in the manner provided in
the Evidence Act 1950 for the authentication of document
produced by computer,
shall be admissible as evidence of the facts stated or contained
therein.
Evidence by certificate, etc.
111. (1) Any certificate signed by the Director General stating
that—
(a) a person was or was not, at any date, registered under
this Act;
(b) any return has not been furnished or had not been furnished
at any date;
(c) any tax shown as due in any return or assessment has
not been paid;
(d) any penalty and the amount thereof shown as due from
a person named therein; or
(e) any public ruling made under section 77 or advance ruling
made under section 78,
shall be sufficient evidence of the facts therein.
(2) In any proceedings in respect of any offence under this Act
in which the existence, description, classification, composition,
quantity, quality or value of, or any other matter in relation to,
any movable goods returned, sold or destroyed under section
90, is in question, any document produced by the prosecution
purporting to be a certificate in respect of any the matter given
and signed by—
(a) an "analyst" within the meaning of subsection 113(3);
(b) a senior officer of goods and services tax; or
(c) any person, regardless whether or not he is a public
officer, authorized by or on behalf of the Minister either
generally or in any particular case, for the purposes of
this section,
shall be admissible in evidence and its conclusiveness shall not
be challenged on the ground that the movable goods in respect
of which the certificate is given has not been produced before
the court either in part or in entirety, and it shall be evidence
of its contents, including the facts stated therein, without proof
of the signature to the certificate.
Proportional examination or testing of goods seized to be
accepted by courts
112. (1) When any goods liable to seizure under the provisions
of this Act have been seized, it shall be sufficient to open and
examine five per centum only of each description of the package
or receptacle in which the goods are contained.
(2) If it is necessary to test any goods seized under this Act,
it shall be sufficient to test only a sample not exceeding five
per centum in volume or weight of the goods examined under
subsection (1).
(3) The court shall presume that the goods contained in the
unopened packages or receptacles are of the same nature, quantity
and quality as those found in the similar packages or receptacles
which have been opened.
Production of a certificate of analysis
113. (1) In any prosecution under this Act, a certificate of
analysis purporting to be under the hand of an analyst shall,
on production thereof by the prosecutor, be sufficient evidence
of the facts stated therein unless the accused requires that the
analyst be called as a witness, in which case he shall give notice
thereof to the prosecutor not less than three clear days before the
commencement of the trial:
Provided always that in any case in which the Public Prosecutor
intends to give in evidence any certificate of analysis he shall
deliver a copy thereof to the accused not less than ten clear days
before the commencement of the trial.
(2) Analysts are bound to state the truth in the certificates of
analysis under their hands.
(3) For the purposes of this section, "analyst" means—
(a) a person employed as a Chemist in the Department of
Chemistry, or as a Chemist or Assistant Chemist at the
Institute for Medical Research;
(b) a Senior Chemist in the Department of Agriculture;
(c) a person employed as a Chemist or Geologist in the
Department of Minerals and Geoscience;
(d) any chemist in the employment of the Government of
Malaysia or Singapore;
(e) any other person or class of persons who is or are
declared by the Minister charged with responsibility
for the Department of Chemistry, by notification in the
Gazette, to be an analyst or analysts;
(f) any police officer or officer of customs who is declared
by the Minister by notification in the Gazette to be an
analyst;
(g) any person appointed by the Minister under section
399 of the Criminal Procedure Code [Act 593] to be a
Document Examiner;
(h) any Inspector of Weights and Measures appointed under
any written law relating to weights and measures; and
(i) any person or class of persons who is or are declared by
the Minister, by notification in the Gazette, to whom
the provisions of this section shall apply.
(4) If an analyst is called by the accused under subsection (1),
he shall be called at the expense of the accused unless the court
otherwise directs.
(5) For the purposes of subsection (3), "Minister" means the
Minister responsible for the matter in connection with which the
reference is made.
Proof as to registration or licensing of vessel and conveyances
in Malaysia or Singapore
114. Where in any prosecution under this Act, it is relevant
to ascertain particulars as to the registration or licensing of any
vessel or conveyance registered or licensed in any port or place
in Malaysia or Singapore, a certificate purporting to be signed
by the officer responsible under any written law in Malaysia
or in Singapore for the registration or licensing shall be prima
facie evidence as to all particulars concerning the registration
or licensing contained therein, and the burden of proving the
incorrectness of any particulars stated in the certificate shall be
on the person denying the same.
Proof as to tonnage or build of a craft
115. (1) Where in any prosecution under this Act, it is relevant to
ascertain the tonnage or build or any other particulars descriptive
of the identity of a craft, and if any of these particulars relating
to the identity of the craft is in question, then any document
produced by the prosecution purporting to be a certificate in respect
of any such matter given and signed by any officer responsible
for such under any written law shall be admissible in evidence,
and it shall be evidence of its contents, inclu ding the facts stated
therein, without proof of the signature to the certificate.
(2) This section shall apply not withstanding anything contained
in any other written law or rule of evidence to the contrary.
Proof as to accuracy of a metre or other device for measuring
petroleum
116. Where in any proceedings under this Act, it is necessary to
prove the accuracy of a metre or any other device for measuring
petroleum, a certificate purporting to be signed by any officer
responsible under any written law for the measurement shall be
admissible in evidence and shall be accepted by the court as
prima facie evidence of the facts stated in the certificate.
Imprisonment for non-payment of fine
117. Notwithstanding the provisions of the Criminal Procedure
Code, the period of imprisonment imposed by any court in respect
of the non-payment of any fine under this Act, or in respect of
the default of a sufficient distress to satisfy any such fine, shall
be such period of such description, as in the opinion of the court
will satisfy the justice of the case, but shall not exceed in any
case the maximum fixed by the following scale:
Where the fine The period
does not exceed five thousand ringgit two months
exceeds five thousand ringgit but does four months
not exceed ten thousand ringgit
exceeds ten thousand ringgit but six months
does not exceed twenty thousand ringgit
with two additional months for every ten thousand ringgit after
the first twenty thousand ringgit of the fine until a maximum
period of six years is reached.
Manner of seizure not to be enquired into on trial before
court or on appeal to High Court
118. On any trial before any court and in any proceedings on
appeal in the High Court, relating to the seizure of goods subject
to forfeiture under this Act, the court shall proceed to the trial or
hear the appeal on the merits of the case only, without enquiring
into the manner or form of making any seizure, except in so
far as the manner and form of seizure may be evidence on the
merits.
Obligation of secrecy
119. (1) Except as provided under section 120, the name,
identification card number, passport number, address of an
informer or any other information which can lead to identity of
the informer and the substance of the information received from
an informer shall be kept secret and shall not be disclosed by
any officer of goods and services tax or any person who in the
ordinary course of his duties comes into possession of or has
control of or access to the information to any person except the
designated officer of goods and services tax authorized by the
Director General.
(2) Any person who contravenes subsection (1) commits an
offence and shall, on conviction, be liable to imprisonment for
a term not exceeding seven years or to a fine not exceeding one
hundred thousand ringgit or to both.
Protection of informers from discovery
120. (1) Except as hereinafter provided, no witness in any civil
or criminal proceedings shall be obliged or permitted to disclose
the name, address or any information of an informer or the
substance of the information received from him or to state any
matter which might lead to his discovery.
(2) If any books, documents or papers which are in evidence or
liable to inspection in any civil or criminal proceedings whatsoever
contain any entry in which any informer is named or described
or which might lead to his discovery, the court shall cause all
the passages to be concealed from view or to be obliterated
so far only as may be necessary to protect the informer from
discovery.
(3) If on the trial for any offence under this Act the court
after full enquiry into the case believes that the informer wilfully
made in his complaint a material statement which he knew or
believed to be false or did not believe to be true, or if in any
other proceedings the court is of opinion that justice cannot be
fully done between the parties thereto without the discovery of the
informer, it shall be lawful for the court to require the production
of the original complaint, if in writing, and permit enquiry, and
require full disclosure, concerning the informer.
Forfeiture and release of goods liable to seizure
121. (1) All goods liable to seizure under this Act shall be
liable to forfeiture and all forfeited goods shall be disposed of
in accordance with the direction of the Director General.
(2) Notwithstanding subsection (1), the Director General or
any senior officer of good and services tax may, where he deems
fit, at any time direct any goods liable to seizure under this Act
to be released to the person from whose possession, custody or
control the goods was seized.
No costs or damages arising from seizure to be recoverable
unless seizure without reasonable or probable cause
122. No person shall in any proceedings before any court in
respect of the seizure of any goods seized in exercise or the
purported exercise of any power conferred under this Act, be
entitled to the costs of the proceedings or to any damages or
other relief other than an order for the return of the goods or
the payment of the value unless the seizure was made without
reasonable or probable cause.
Court to order disposal of goods seized
123. (1) An order for the forfeiture or for the release of anything
liable to forfeiture under this Act shall be made by the court before
which the prosecution with regard thereto has been held, and an
order for the forfeiture of goods shall be made if it is proved to
the satisfaction of the court that an offence under this Act has
been committed and that the goods were the subject matter of or
were used in the commission of the offence notwithstanding that
no person may have been convicted of the offence.
(2) The amount secured under paragraph 90(1)(a) or (b) or
the amount realized by sale under paragraph 90(1)(c) shall be
forfeited by the court if it is proved to the satisfaction of the
court that an offence under this Act has been committed and that
the movable goods in respect of which the amount was secured
or realized by sale, as the case may be, was the subject matter
of or was used in the commission of the offence notwithstanding
that no person may have been convicted of the offence.
(3) All goods forfeited shall be delivered to an officer of goods
and services tax and shall be disposed of in accordance with the
directions of the Director General.
Goods seized in respect of which there is no prosecution,
or the proceeds of sale thereof, are forfeited if not claimed
within one month
124. (1) If there be no prosecution with regard to any goods
seized under this Act, the goods or the proceeds of sale of the
goods which are held pursuant to paragraph 90(1)(c) shall be
taken and deemed to be forfeited at the expiration of one calendar
month from the date of seizure of the goods unless, before the
expiration—
(a) a claim to the goods or the proceeds of sale of the goods
is made under subsection (2);
(b) a written application is made for the return of the goods
under paragraph 90(1)(a) or (b); or
(c) the goods are returned under the paragraph (a) or (b).
(2) Any person asserting that he is the owner of the goods or
the proceeds of sale of the goods, as the case may be, and that
they are not liable to forfeiture may, personally or by his agent
authorized in writing, give written notice to any senior officer
of goods and services tax that he claims the same.
(3) On the expiration of the period mentioned in
subsection (1), or, if a decision is made earlier that there be no
prosecution with regard to the goods, on the making of the decision
the senior officer of goods and services tax, shall, if the goods
or the proceeds of sale of the goods are not taken and deemed to
be forfeited under the subsection, refer the claim to the Director
General who may direct that the goods or the proceeds of sale
of the goods or the security furnished under paragraph 90(1)(a)
or (b), as the case may be, be released or may direct the senior
officer, in the form and manner as the Director General may
determine to refer the matter to a Sessions Court.
(4) The Sessions Court shall issue a summons requiring the
person asserting that he is the owner of the goods or the proceeds
of sale of the goods, and the person from whom the goods were
seized, to appear before him, and upon their appearance or default
to appear, due service of the summons being proved, the Sessions
Court shall proceed to the examination of the matter, and upon
proof that an offence against this Act has been committed and that
the goods were the subject matter, or were used in the commission,
of the offence, shall order the goods or the proceeds of sale
of the goods or the amount secured under paragraph 90(1)(a)
or (b), as the case may be, to be forfeited, or in the absence of
such proof, may order the release of the goods or the proceeds
of sale of the goods or the security furnished under paragraph
90(1)(a) or (b), as the case may be.
(5) In any proceedings under subsection (4), section 108 shall
apply to the person asserting that he is the owner of the goods or
the proceeds of sale of the goods and to the person from whom
they were seized as if the owner or person had been the accused
in a prosecution under this Act.
Goods or amount forfeited may be delivered or refunded to
the owner or other person
125. The Minister may, upon application made to him in writing
through the Director General, order—
(a) any goods seized under this Act; or
(b) any amount secured under paragraph 90(1)(a) or (b) or
the amount realized by sale under paragraph 90(1)(c),
whether forfeited, or taken and deemed to be forfeited, under
section 123, 124 or 127, to be delivered or refunded, as the
case may be, to the owner or other person entitled thereto on
payment of the amount and upon the terms and conditions as he
deems fit:
Provided that the application shall be made before the expiration
of one calendar month from the date on which the goods or
amount are forfeited or are taken and deemed to be forfeited, as
the case may be.
Service of summons
126. (1) Every summons issued by a court against any person
in connection with any civil or criminal proceedings under this
Act may be served on the person named therein—
(a) by delivering the summons to the person or any adult
member of his family or any of his servants residing with
him at his usual or last-known place of residence;
(b) by leaving the summons at his usual or last-known place
of residence or business in an envelope addressed to the
person;
(c) by sending the summons by registered post addressed to
the person at his usual or last-known place of residence
or business; or
(d) where the person is a company, a firm, a society, an
association or other body of persons—
(i) by delivering the summons to the secretary or
other like officer of the company, firm, society,
association or other body of persons at its registered
office or principal place of business; or
(ii) by sending the summons by registered post addressed
to the company, firm, society, association or
other body of persons at its registered office or
principal place of business.
(2) Any summons sent by registered post to any person in
accordance with subsection (1) or by delivering the summons to
the person or to any adult member of his family or any of his
servant residing with him shall be deemed to be duly served on
the person.
(3) When a summons issued by a court is served, an affidavit of
the service purporting to be made before an officer duly authorized
to administer an oath shall be admissible in evidence.
Compounding of offences
127. (1) The officer of goods and services tax may, with the
written consent of the Public Prosecutor, compound any offence
committed by any person under this Act and prescribed to be a
compoundable offence by making a written offer to the person
suspected of committing the offence to compound the offence
on payment to the Director General of an amount of money not
exceeding fifty per centum of the amount of the maximum fine
for that offence within the time specified in the offer.
(2) An offer under subsection (1) may be made at any time
after the offence has been committed, but before any prosecution
for it has been instituted, and if the amount specified in the offer
is not paid within the time specified in the offer or within any
extended period as the Director General may grant, prosecution
for the offence may be instituted at any time after that against
the person to whom the offer was made.
(3) Where an offence has been compounded under subsection
(1), no prosecution shall after that be instituted in respect of the
offence against the person to whom the offer to compound was
made.
Court order
128. (1) Where any person is found guilty of an offence under
this Act, the court before which the person is found guilty shall
order the person to pay to the Director General the amount of tax
due and payable, or any penalty payable or any surcharge accrued
under this Act, if any, as certified by the Director General and
the tax, penalty, or surcharge shall be recoverable in the same
manner as a fine as provided under section 283 of the Criminal
Procedure Code.
(2) In addition to subsection (1), the court has civil jurisdiction
to the extent of the amount and the order is enforceable in all
respects as a final judgement of the court in favour of the Director
General.
PART XIII
REVIEW AND APPEAL
Interpretation
129. In this Part, unless the context otherwise requires—
"Chairman" means the Chairman of the Tribunal appointed
under paragraph 134(1)(a);
"Deputy Chairman" means any Deputy Chairman of the Tribunal
appointed under paragraph 134(1)(a);
"Secretary" means the Secretary of the Tribunal appointed
under subsection 139(1);
"Tribunal" means the Goods and Services Tax Appeal Tribunal
established under section 131.
Application for review and revision
130. Any person may apply to the Director General, by notice in
writing within thirty days of the date the person has been notified
of any decision made by the Director General or an officer of
goods and services tax for review and revision of the decision
and the Director General shall make a final decision and notify
the person within sixty days or within the time practicable.
Establishment of Tribunal
131. A tribunal to be known as the "Goods and Services Tax
Appeal Tribunal" is established.
Right of appeal
132. (1) Subject to section 133, any person aggrieved by the decision
of the Director General may appeal against the decision.
(2) The appeal shall be made to the Tribunal within thirty
days from the date the disputed decision was made known to
the aggrieved person in the prescribed form together with the
prescribed fee.
(3) The Tribunal shall not entertain an appeal unless the
appellant has furnished all the returns which he was required
to furnish and has paid the amount shown in those returns and
has paid any tax due and payable by him on the matter under
appeal:
Provided that where in any particular case, the Tribunal is of
opinion that the payment of the tax would cause undue financial
hardship to the person, the Tribunal may dispense with the tax
subject to the conditions as it deems fit to impose so as to
safeguard the interest of the revenue.
(4) For the purposes of this section—
(a) tax includes penalty, surcharge or any other money;
(b) returns includes customs declaration forms or any other
form required under this Act.
Jurisdiction of Tribunal
133. (1) The Tribunal shall have jurisdiction to determine appeals
relating to goods and services tax except on matters specified in
the Fourth Schedule.
(2) The Minister may, by order published in the Gazette,
amend the Fourth Schedule.
(3) Any order made under subsection (2) shall be laid before
the Dewan Rakyat.
Membership of Tribunal
134. (1) The Tribunal shall consist of the following members
who shall be appointed by the Minister:
(a) a Chairman of the Tribunal and such number of Deputy
Chairmen from amongst members of the Judicial and
Legal Service; and
(b) not less than five other members as the Minister deems
fit, from among persons who, in the opinion of the
Minister have wide knowledge or extensive experience
in any field of activities relating to goods and services
tax, customs, or taxation.
(2) The Chairman, Deputy Chairmen and other members of
the Tribunal shall hold office for a term not exceeding three
years, after which they shall be eligible to be reappointed upon
the expiry of their term of office but shall not be appointed for
more than three consecutive terms.
(3) The Minister shall determine the remuneration and other
terms and conditions of the appointment of the Chairman, Deputy
Chairmen and other members of the Tribunal.
Temporary exercise of functions of Chairman
135. Where the Chairman is for any reason unable to perform
his functions or during any period of vacancy in the office of
the Chairman, a Deputy Chairman shall perform the functions of
the Chairman.
Revocation of appointment
136. The Minister may revoke the appointment of a member of
the Tribunal appointed under paragraph 134(1)(b) if—
(a) his conduct, whether in connection with his duties as a
member of the Tribunal or otherwise, has been such as
to bring discredit to the Tribunal;
(b) he has become incapable of properly carrying out his
duties as a member of the Tribunal;
(c) there has been proved against him, or he has been convicted
on, a charge or charges in respect of—
(i) an offence involving fraud, dishonesty or moral
turpitude;
(ii) an offence under any law relating to corruption;
(iii) an offence under this Act, the Customs Act 1967
or the Excise Act 1976; or
(iv) any other offence punishable with imprisonment
for more than two years;
(d) he is adjudicated a bankrupt;
(e) he has been found or declared to be of unsound mind or
has otherwise become incapable of managing his affairs;
or
(f) he absents himself from three consecutive sittings of the
Tribunal without leave of the Chairman.
Resignation
137. A member of the Tribunal appointed under paragraph 134(1)(b)
may at any time resign his office by giving three months notice
in writing to the Minister.
Vacation of office and acting appointments
138. (1) The office of any member of the Tribunal shall be
vacated upon—
(a) his death;
(b) his resignation from office by giving notice in writing;
(c) expiry of his term of appointment.
(2) The Minister shall appoint any person in accordance with
section 134 to replace the Chairman, any Deputy Chairman or any
other member during the vacancy in the office of the Chairman,
the Deputy Chairman or other member.
(3) The exercise of the powers or the performance of the
functions of the Tribunal is not affected only because of there
being a vacancy in the membership of the Tribunal.
Secretary to the Tribunal and other officers
139. (1) There shall be appointed a Secretary and an Assistant
Secretary to the Tribunal and such number of officers as may be
necessary for carrying out the functions of the Tribunal.
(2) The Chairman shall have general control of the Secretary,
Assistant Secretary and officers of the Tribunal.
(3) For the purpose of this Act, the Secretary and Assistant
Secretary to the Tribunal shall be deemed to be officers of the
Tribunal.
Public servant
140. All members, officers, Secretary and Assistant Secretary of
the Tribunal while discharging their duties shall be deemed to
be public servants within the meaning of the Penal Code.
Hearing of appeals
141. (1) The sitting of every appeal shall consist of a panel of
three members.
(2) In every appeal the Tribunal shall be presided by the
Chairman or the Deputy Chairman.
(3) The decision of the panel shall be decided in accordance
with the opinion of the majority of the members composing the
panel.
(4) Where a member of the panel under subsection (1) dies
or becomes incapable of excising his functions as a member, the
proceedings shall continue before, and decision shall be given by,
the remaining members of the panel, not being less than two, and
the panel shall, for the purposes of the proceedings, be deemed
to be duly constituted notwithstanding the death or incapability
of the member as aforesaid.
(5) In the case under subsection (4), the decision shall be
determined in accordance with the opinion of the majority of the
remaining members of the panel, and if there is no majority, the
member presiding the proceedings shall have a second or casting
vote.
(6) If the Chairman or the Deputy Chairman presiding over any
proceedings in respect of an appeal dies or become incapacitated,
or is for any other reason unable to complete or dispose of the
proceedings, the appeal shall be heard afresh, unless the parties agree
that the appeal be continued by another Deputy Chairman.
(7) Where the term of appointment of any member of the
panel expires during the pendency of any proceedings in respect
of an appeal, the term of his appointment shall be deemed to be
extended until the final disposal of the appeal.
(8) The Tribunal may sit in one or more sittings on such day
and at such time and place as the Chairman may determine.
Hearing by a single member
142. Notwithstanding section 141, if the Chairman deems it fit
in the interest of achieving the expeditious and efficient conduct
of the appeal, the proceedings of the appeal shall be presided
over by any of the following persons sitting alone—
(a) the Chairman;
(b) any of the Deputy Chairmen; or
(c) any other member of the Tribunal as may be determined
by the Chairman.
Disclosure of interest
143. (1) A member of the Tribunal having, directly or indirectly,
by himself or his family member, any interest in an appeal brought
before him as a member, the member shall immediately disclose
the fact and the nature of his interest to the Chairman.
(2) Upon receipt of the disclosure of interest under subsection (1),
the Chairman shall appoint another member to hear and dispose
off the appeal.
Exclusion of jurisdiction of court
144. (1) Where an appeal is lodged with the Tribunal and the
appeal is within the jurisdiction of the Tribunal, the issues in
dispute in that appeal, whether as shown in the initial appeal or
as emerging in the course of the hearing, shall not be the subject
of proceedings between the same parties in any court unless—
(a) the proceedings before the court were commenced before
the appeal was lodged with the Tribunal; or
(b) the appeal before the Tribunal is withdrawn, abandoned
or struck out.
(2) Where paragraph (1)(a) applies, the issues in dispute in the
appeal to which those proceedings relate, whether as shown in
the initial appeal or emerging in the course of the hearing, shall
not be the subject of proceedings between the same parties before
the Tribunal unless the appeal before the court is withdrawn,
abandoned or struck out.
Notice of appeal and hearing
145. Upon an appeal being lodged under section 136, the Secretary
shall give notice of the details of the day, time and place of
hearing in the prescribed form to the Director General and the
appellant.
Negotiation for settlement
146. (1) The Tribunal shall, as regards every appeal within
its jurisdiction, assess whether, in all the circumstances, it is
appropriate for the Tribunal to assist the parties to the proceedings
to negotiate an agreed settlement in relation to the appeal.
(2) Without limiting the generality of subsection (1), in making
an assessment the Tribunal shall have regard to any factor that
in the opinion of the Tribunal, is likely to impair the ability of
either or both of the parties to negotiate an agreed settlement.
(3) Where the parties reach an agreed settlement, the Tribunal
shall approve and record the settlement and the settlement shall
take effect as if it were a decision of the Tribunal.
(4) Where—
(a) it appears to the Tribunal that it would not be appropriate
for it to assist the parties to negotiate an agreed settlement
in relation to the appeal; or
(b) the parties are unable to reach an agreed settlement in
relation to the appeal,
the Tribunal shall proceed to determine the appeal.
Representation at hearing
147. For the purpose of an appeal—
(a) any party to the appeal may conduct his case himself or
may be represented by any person whom he may appoint
for that purpose; and
(b) the Director General may be represented at any hearing
by an authorized officer appointed by him.
Evidence
148. (1) Any proceedings before the Tribunal shall be conducted
without regard to formality and technicality and the Tribunal
may—
(a) procure and receive evidence on oath or affirmation,
whether written or oral, and examine all such persons as
witnesses, as the Tribunal thinks necessary to procure,
receive or examine;
(b) require the production before it of books, papers, documents,
records and things;
(c) administer the oath, affirmation or statutory declaration,
as the case may require;
(d) seek and receive such other evidence and make such other
inquiries as it thinks fit;
(e) summon the parties to the proceedings or any other person
to attend before it to give evidence or to produce any
document, records or other thing in his possession or
otherwise to assist the Tribunal in its deliberations;
(f) receive expert evidence; and
(g) generally direct and do all such things as may be necessary
or expedient for the expeditious determination of the
claims.
(2) A summons issued under this section shall be served
and enforced as if it were a summons issued by a Sessions
Court.
Tribunal may request for information
149. (1) The Tribunal may request for any information as it may
deem necessary for the purpose of exercising any of its powers
and functions under this Act.
(2) Any person who refuses to comply with the request by
the Tribunal commits an offence.
Decision
150. (1) The Tribunal shall make its decision without delay
and where practicable, within sixty days from the first day the
hearing before the Tribunal commences.
(2) The Tribunal shall have the power—
(a) to affirm the decision of the Director General;
(b) to vary the decision of the Director General; or
(c) to set aside the decision of the Director General and
substitute for it a new decision.
(3) The Tribunal shall give its reason for its decision in any
appeal heard before it.
Decision and settlement to be recorded in writing
151. The Tribunal shall make or cause to be made a written
record of the terms of—
(a) every agreed settlement reached by the parties under
section 146; and
(b) every decision made by it under section 150.
Decision of the Tribunal to be final
152. (1) A decision of the Tribunal shall be—
(a) final and binding on all parties to the proceedings; and
(b) deemed to be an order of a Sessions Court and be enforced
accordingly by the parties to the proceedings.
(2) For the purpose of paragraph (1)(b), the Secretary shall
send a copy of the decision made by the Tribunal to the Sessions
Court having jurisdiction in the place to which the decision relates
or in the place where the decision was made and the Court shall
cause the copy to be recorded.
Disposal of appeal
153. The Tribunal shall dispose an appeal by way of—
(a) agreed settlement reached by the parties and the settlement
shall be recorded as if it has been pronounced by the
Tribunal;
(b) withdrawal by the appellant in a prescribed form; or
(c) orders by the Tribunal in a prescribed form.
Reference of question of law to the High Court
154. (1) Before the Tribunal makes a decision under section 150,
it may, in its discretion, refer to the High Court a question of
law—
(a) which arose in the course of the proceedings;
(b) which, in the opinion of the Tribunal, is of sufficient
importance to merit such reference;
(c) the determination of which by the Tribunal raises, in the
opinion of the Tribunal, sufficient doubt to merit such
reference.
(2) If the Tribunal refers any question of law under subsection (1)
for the decision of the High Court, it shall make its decision in
conformity with such decision.
(3) A Federal Counsel authorized by the Attorney General
for the purpose may appear on behalf of the Tribunal in any
proceedings before a High Court under this section.
Further appeals
155. There shall be such rights of appeal from decisions of the
High Court under section 154 as exist in respect of decisions
of the High Court on questions of law in its appellate civil
jurisdiction.
Tribunal to adopt procedure
156. The Tribunal shall adopt such procedures as it thinks fit
and proper.
Want of form
157. No proceedings, award or other document of the Tribunal
shall be set aside or quashed for want of form.
Provisions relating to costs and expenses
158. The Tribunal shall only make an award as to costs and
expenses and shall have full power to determine by whom and
to what extent the costs and expenses are to be paid—
(a) against the appellant, if it is satisfied that he had conducted
his case in a frivolous or vexatious manner; and
(b) against any party to the appeal, if it is satisfied that in
all circumstances of the case it would be unjust and
inequitable not to do so.
Disposal of documents, etc.
159. (1) The Tribunal may, at the conclusion of the proceedings
before it, order that any goods, document, record, material, thing
or other property produced during the proceedings be delivered
to the rightful owner or be disposed of in the manner as it thinks
fit.
(2) Where no person has taken delivery of the goods, document
record, material, thing or other property referred to in subsection (1)
after a period of six months, the ownership in the goods, document,
record, material, thing or other property shall be deemed to have
passed to and become vested in the Government.
Act or omission done in good faith
160. No action or suit shall be instituted or maintained in any
court against—
(a) a member of the Tribunal; or
(b) any person authorized to act for or on behalf of the
Tribunal,
for any act or omission done in good faith in the performance of
its or his functions and the exercise of its or his powers under
this Act.
PART XIV
DESIGNATED AREAS
Interpretation
161. For the purposes of this Part, "Malaysia" excludes the
designated areas.
Supply of goods or services made within or between designated
areas
162. (1) For the purposes of this Act, a taxable supply made
within or between the designated areas are disregarded for tax
purposes with respect to accounting for output tax.
(2) Notwithstanding subsection (1), tax shall be charged by
any taxable person on any supply of freight services between
designated areas.
Goods or services imported into or supplied from designated
area
163. Notwithstanding any provision of this Act—
(a) tax shall be due and payable upon all goods supplied
from a designated area to Malaysia to all intents as if
the supply were importation into Malaysia;
(b) tax shall be charged on taxable supply of services made
by any taxable person from a designated area to Malaysia
or from Malaysia to a designated area;
(c) no tax shall be chargeable upon any importation of
goods or supply of imported services into a designated
area.
Supply of goods or services within Malaysia
164. Notwithstanding any provision of this Act, tax shall be
charged on all goods or services supplied within Malaysia by a
taxable person whose principal place of business is located in a
designated area.
Declaration of goods supplied from designated area to
Malaysia
165. The person in charge of any vessel or aircraft on which
goods are supplied from the designated area to Malaysia shall
make a declaration substantially in the form as prescribed under
the Customs Act 1967 and any other applicable written law for
the time being in force.
Collection of tax in designated area
166. Notwithstanding any provision of this Act, the collection
of tax due and payable shall be made in a designated area in
respect of goods supplied or to be supplied from the designated
area to Malaysia.
Power of Minister to impose tax
167. (1) Notwithstanding any provision of this Part, the Minister
may, by order published in the Gazette, prescribe any supply
within a designated area and any goods or services supplied
to, imported into or exported from the designated area to be
chargeable to tax.
(2) Any order made under subsection (1) shall be laid before
the Dewan Rakyat.
PART XV
MISCELLANEOUS
Power to take samples
168. (1) The Director General or any officer of goods and
services tax may, if his duties so require, take samples of any
goods to ascertain whether they are goods of a description liable
to tax or to ascertain the tax due and payable on the goods, or
for other purposes as he may deem necessary, and the samples
may be disposed of and accounted for in such manner as the
Director General may direct.
(2) No payment shall be made for any samples taken under
subsection (1), but the officer of goods and services tax shall
give a receipt for the samples.
Persons bound to produce goods or give information, etc.
169. (1) Every person having information about any matter
into which it is the duty of an officer of goods and services tax
to inquire shall, upon being required by him to do so, give the
information.
(2) Every person required by an officer of goods and services
tax to produce any goods, document, article or thing which is
within the power of the person to produce, and which are goods,
document, article or thing required under this Act or goods,
document, article or thing used in any transaction or other matter
relating to tax or goods, document, article or thing into which
it is the duty of the officer of goods and services tax to enquire
under this Act, shall produce the goods, document, article or
thing.
(3) Where any information, goods, document, article or thing
are not in the national language or English language, the Director
General or any officer of goods and services tax may by notice
in writing require the supplier or, on the supplier’s default, any
other person, to produce, within a reasonable period, a translation
thereof in the national language or English language as may be
determined by the Director General or the officer.
(4) Any person who contravenes this section commits an
offence.
Use of electronic service
170. (1) Notwithstanding any other provision of this Act and
subject to regulations made under this Act, the Director General
may provide an electronic service to any registered user for—
(a) the filing or submission of any application, return,
declaration or any other document; and
(b) the service of any notice, direction, order, permit, receipt
or any other document.
(2) Where an electronic notice is made and transmitted to
the Director General, the Director General shall not be liable
for any loss or damage suffered by the registered user by reason
of any error or omission of whatever nature or however arising
appearing in any electronic notice obtained by the registered user
under the electronic service if the error or omission was made
in good faith and in the ordinary course of the discharge of the
duties of the Director General or occurred or arose as a result
of any defect or breakdown in the service or in the equipment
used for the provision of the service.
(3) Any electronic notice made and transmitted by the registered
user shall be deemed to have been filed, submitted or served at the
time the electronic notice is received by the Director General.
(4) For the purposes of this section, "registered user" means
any person who is authorized in writing by the Director General
to gain access to and use the electronic service.
Service of notices
171. (1) Every notice, direction or any other document required
by this Act to be served on any person may be served—
(a) personally upon the person;
(b) by sending it to the person by registered post; or
(c) by electronic service.
(2) The notice, direction or other document sent by registered
post to a person shall be deemed to have been served on that
person at the time at which it would have been delivered to that
person in the ordinary course of the post if the notice, direction
or other document was addressed—
(a) in the case of a company, a firm, a society, an association
or other body of persons—
(i) to its registered office;
(ii) to its last-known address; or
(iii) to any person authorized by it to accept service
of process; and
(b) in the case of an individual, to his last-known address.
(3) Where a person has given his consent for a notice to be
served on him through the electronic service, the notice shall be
deemed to have been served at the time when the electronic notice
is transmitted to his account through the electronic service.
Authentication of notices, etc.
172. (1) Subject to subsection (2), every notice or any other
document served for the purposes of this Act by the Director
General or an officer authorized by him shall be sufficiently
authenticated if the name and office of the Director General is
printed, stamped or otherwise written thereon.
(2) Where this Act provides for a notice or any other document
to be under the hand of any officer of goods and services tax,
the notice or the other document shall be signed in manuscript
by the officer of goods and services tax.
(3) A notice or any other document served for the purposes of
this Act and purporting to be signed in manuscript by the Director
General or an officer authorized by him shall be presumed, until
the contrary is proved, to have been so signed.
Free postage
173. All returns and remittances of tax and any correspondence
resulting from or connected with any return or remittance may,
if posted in Malaysia, be sent free of postage to the Director
General in an envelope marked "Goods and Services Tax".
Tax agent
174. (1) No person shall be permitted to act in Malaysia on
behalf of any person for any matter under this Act unless he is
a tax agent.
(2) Any person may apply for an approval to be a tax agent
to the Minister if—
(a) in the case of an individual, he has his usual place of
residence in Malaysia; or
(b) in the case of a company, a firm, a society, an association
or other body of persons, it is incorporated or otherwise
legally constituted in Malaysia.
(3) The Minister may approve an application under subsection (2)
and if it is approved, the approval shall, unless sooner revoked,
be valid for a minimum period of twenty-four months beginning
from the date of the approval.
(4) A tax agent may apply for a renewal of an approval to
the Minister before the expiry of approval period specified under
subsection (3) and if the application for renewal is approved,
the renewal shall, unless sooner revoked, be valid for the same
period.
(5) A fee as may be prescribed by the Minister by an order
published in the Gazette shall be paid on the application for an
approval under subsection (2) or renewal of an approval under
subsection (4).
(6) A tax agent who transacts business on behalf of any person
for any matter under this Act shall—
(a) produce a letter of authorization from the person whom
he represents; and
(b) where any prescribed form is required to be submitted
for the purposes of the matter being transacted, submit
the form that has been signed by the person whom
he represents, except where otherwise allowed by the
Director General.
(7) Notwithstanding subsection (1), any person who is given
permission to act as an agent under section 90 of the Customs
Act 1967 shall be permitted to act in Malaysia on behalf of any
person for any matter under this Act in relation to importation
or exportation of goods, including transshipment.
(8) For the purpose of this section, "tax agent" means any
professional accountant or any other person permitted by the
Minister to act in Malaysia on behalf of any person for any
matter under this Act.
(9) Any person who contravenes subsection (1) or (6) commits
an offence.
Rewards
175. The Director General may order any rewards as he deems
fit to be paid to any person for services rendered in connection
with the detection of any offences against this Act or any recovery
of tax under this Act.
Forms to be used
176. (1) Where any form has been prescribed under this Act,
no person shall, for the purpose of this Act, use any form which
is not printed or issued by authority of the Director General:
Provided that the Director General may, at his discretion and
subject to such conditions as he deems fit to impose, permit any
person to use forms which are not printed or issued as aforesaid
or the use of any form submitted through electronic service.
(2) Any person who contravenes subsection (1) commits an
offence.
Power of Director General to charge fees
177. The Director General may charge such fees as may be
prescribed in respect of any act or service done or rendered
by him or any officer and which is not required to be done or
rendered under this Act and for which no fee is prescribed by
any written law.
Application of Customs legislation
178. (1) Subject to subsection (2), this Act shall be construed as
one with the Customs Act 1967 or Excise Act 1976 with regards
to the exportation or importation of goods including in transit
and the movement of goods under customs control.
(2) Where there is any inconsistency between the provisions
of the Customs Act 1967 or Excise Act 1976 and the provisions
of this Act, the provisions of this Act shall prevail.
Protection of Government from liability
179. The Government shall not be liable to make good any loss
sustained in respect of any goods by fire, theft, damage or other
cause while the goods are in any customs warehouse or in the
lawful custody or control of any officer of goods and services
tax unless the loss is caused by the wilful neglect or default of
an officer of goods and services tax or of a person employed by
the Government in the course of carrying out his duties under
this Act.
Protection of officer of goods and services tax from liability
180. No officer of goods and services tax or other person
employed by the Government in the course of carrying out his
duties under this Act shall be liable to make good any loss
sustained in respect of any goods by fire, theft, damage or other
cause while the goods are in any customs warehouse or in the
lawful custody or control of the officer or any other officer of
goods and services tax or person employed by the Government
in the course of carrying out his duties under this Act unless the
loss is caused by his wilful neglect or default.
Power to make regulations
181. (1) The Minister may make regulations as may be necessary
or expedient for the purposes of carrying into effect the provisions
of this Act.
(2) Without prejudice to the generality of subsection (1),
regulations may be made for the following purposes:
(a) to prescribe anything required by this Act to be
prescribed;
(b) to vary the rules for determining where a supply of
services is made for the purposes of place of supply
under section 12;
(c) to prescribe the offices for the administration of the goods
and services tax and for the days and times during which
the offices may be opened for business;
(d) to determine the time of supply in cases where subsections
11(9) and 11(10) apply;
(e) to prescribe the treatment of supply of imported
services;
(f) to prescribe matters relating to registration or registered
persons;
(g) to prescribe the following matters in relation to the credit
of input tax against output tax under section 38:
(i) the manner and circumstances where—
(aa) a taxable person may treat the tax on the
supply of goods or services to him, or
the tax paid or to be paid by him on the
importation of goods as his input tax;
(bb) a person may treat the tax on the supply of
goods to him, or the tax paid or to be paid
by him on the importation of goods as his
input tax in the case where the person was
not a taxable person at the time when the
supply or importation was made; and
(cc) any person who has been, but is no longer
a taxable person, may be paid by the
Director General any amount of any tax
on the supply of services made to him
when he was a taxable person;
(ii) the time limit for a taxable person to claim the
whole or any part of any input tax as allowable
input tax;
(h) to prescribe matters in relation to the allowable amount
of input tax and to provide for securing a reasonable
attribution of input tax to supply under section 39
including—
(i) determining a proportion by reference to which input
tax for any taxable period is to be provisionally
attributed to the supply;
(ii) adjusting, in accordance with a proportion determined
in like manner for a period comprising two or more
taxable periods or part thereof, the provisional
attribution for any of those periods;
(iii) the making of adjustment where the estimate on
the basis of which an attribution was made is
inaccurate;
(i) to prescribe matters relating to the relief for bad debt
under section 59;
(j) to prescribe the operation of the Tourist Refund Scheme
under section 62;
(k) to prescribe for different provisions for the charging
and accounting for tax for joint venture and for any
other activity to be deemed as a joint venture under
section 70;
(l) to prescribe the operation of the Warehousing Scheme
under section 71;
(m) to prescribe the operation of the Approved Trader Scheme
under section 72;
(n) to prescribe the operation of the Approved Toll Manufacturer
Scheme under section 73;
(o) to prescribe the operation of the Approved Jeweller
Scheme under section 74;
(p) to prescribe the operation of the Flat-Rate Scheme under
section 75;
(q) to prescribe matters relating to equity and futures market
under section 76;
(r) to provide the scope and procedure applied in relation to
any ruling made under section 77 or 78;
(s) to prescribe the manner of furnishing returns and declarations
and other matters relating to returns and declarations;
(t) to prescribe the manner of payment of tax;
(u) to prescribe the following matters in relation to the Goods
and Services Tax Appeal Tribunal under Part XIII:
(i) manner in which any matter may be referred to
the Tribunal;
(ii) the manner in which the Tribunal shall be convened
and the place where the Tribunal shall hold its
sittings;
(iii) the scale of costs and fees payable in respect of
any inquiry or proceedings before the Tribunal;
(iv) the responsibilities of the members of the
Tribunal;
(v) the forms to be used in the proceedings;
(vi) fees and the manner for collecting and disbursing
the fees;
(vii) costs and expenses relating to any matter before
the Tribunal;
(viii) generally the better carrying out of the functions
assigned to the Tribunal by this Act;
(v) to prescribe the offences which may be compounded;
(w) to prescribe matters relating to electronic service;
(x) to prescribe the requirements to include tax in the pricing
of goods or services.
(3) The regulations made under subsection (2) may prescribe
any act in contravention of the regulations to be an offence and
may prescribe penalties of a fine not exceeding thirty thousand
ringgit or to imprisonment for a term not exceeding two years
or both.
Part XVI
REPEAL AND SAVINGS OF SALES TAX ACT 1972
Repeal and savings of Sales Tax Act 1972
182. (1) The Sales Tax Act 1972 [Act 64] is repealed.
(2) Notwithstanding the repeal of the Sales Tax Act 1972,
any sales tax due or liability incurred under that Act may be
collected, refunded, remitted or enforced as if that Act had not
been repealed.
Furnishing of return for the last taxable period
183. (1) Notwithstanding subsection 182(1), any person who is
licensed under the Sales Tax Act 1972 shall furnish to the Director
General a return as required under the Sales Tax Act 1972 for
the last taxable period not later than twenty-eight days or such
longer period as the Director General may determine from the
appointed date.
(2) The person referred to in subsection (1) shall state and
pay the amount of sales tax chargeable under paragraph 6(a) of
the Sales Tax Act 1972 which falls due during the last taxable
period.
(3) For the purposes of this section, "last taxable period"
means the period of two calendar months or part of it ending on
the appointed date.
Payment of sales tax when person not registered
184. (1) Notwithstanding subsection 182(1), any person who
is licensed under the Sales Tax Act 1972 and is not registered
under this Act shall be required to account and pay for sales tax
on the goods held on hand on the appointed date—
(a) which are acquired free from sales tax under section 9
of the Sales Tax Act 1972; or
(b) where a deduction of sales tax has been made for goods
purchased under section 31a of the Sales Tax Act
1972.
(2) The person referred to in subsection (1) is not required
to account for sales tax on the finished and semi finished goods
held on the appointed date.
(3) Where a person is required to account for sales tax referred
to in subsection (1), he shall state the amount of sales tax required
to be paid in the return under subsection 183(1).
PART XVII
REPEAL AND SAVINGS OF SERVICE TAX ACT 1975
Repeal and savings of Service Tax Act 1975
185. (1) The Service Tax Act 1975 [Act 151] is repealed.
(2) Notwithstanding the repeal of the Service Tax Act 1975,
any service tax due or liability incurred under that Act may be
collected, refunded, remitted or enforced as if that Act had not
been repealed.
Furnishing of return for the last taxable period
186. (1) Notwithstanding subsection 185(1) and for the purposes of
this Part, any person who is licensed under the Service Tax Act 1975
shall furnish to the Director General a return as required under
the Service Tax Act 1975 for the last taxable period not later than
twenty-eight days or such longer period as the Director General
may determine from the appointed date.
(2) The person referred to in subsection (1) shall state and
pay—
(a) the amount of service tax, for the whole or any part of the
payment for any taxable service provided, not received
within a period of twelve calendar months preceding
the last taxable period; and
(b) the amount of service tax on all taxable service provided
in the last taxable period.
(3) For the purposes of this section, "last taxable period"
means the period of two calendar months or part of it ending on
the appointed date.
PART XVIII
TRANSITIONAL PROVISIONS
Payments, invoices and importation before appointed date
187. (1) Tax shall not be charged and levied on any supply
of goods or services or importation of goods made before the
appointed date.
(2) Notwithstanding section 11, where, before the appointed
date—
(a) any payment is received in connection with a supply
of goods or services that will be made on or after the
appointed date; or
(b) an invoice was issued relating to a supply of goods or
services that will be made on or after the appointed
date,
for the purposes of determining the taxable period to which output
tax or input tax is attributable, the payment is taken to have been
received or the invoice is taken to have been issued, during the
first taxable period after the appointed date.
(3) Where any goods which on the appointed date have not
been released from customs control, it shall be treated for the
purposes of this section to be imported at the time when the
goods are released by the officer of customs.
(4) Any person who contravenes subsection (1) commits an
offence.
Registration before appointed date
188. (1) For the purposes of this section, any person who makes
a taxable supply is liable to be registered under this section if
there are reasonable grounds for believing that the total value
of his taxable supplies in the month of the appointed date and
eleven months immediately succeeding the month will exceed
the amount of taxable supplies as specified in the order under
subsection 20(1).
(2) Any person who is liable to be registered under subsection (1)
shall apply to the Director General to be registered and the
application shall be made three months before the appointed
date.
(3) The Director General may register the person under
subsection (1) on or from the appointed date.
(4) Any person who contravenes subsection (2) commits an
offence.
Effect on sales tax and service tax
189. With effect from the appointed date—
(a) sales tax shall not be chargeable on any sale, use, disposal
or importation of taxable goods under the Sales Tax Act
1972; and
(b) service tax shall not be chargeable on any taxable service
under the Service Tax Act 1975.
Value of supply of goods and services
190. Where a supply of goods or services is treated as having
taken place after the appointed date, the value of the supply shall
be the amount determined under section 15, as is, in the opinion
of the Director General, not reasonably attributable to any part
of the goods supplied or services performed before the appointed
date.
Contract with no opportunity to review
191. (1) This section shall apply where—
(a) a written contract specifically identifies a supply and the
consideration for the supply; and
(b) any supply is made pursuant to any contract with no
opportunity to review entered into before or on the date
this Act has been passed by Dewan Negara.
(2) Where a supply is made before the earlier of the following,
that is—
(a) five years after the appointed date; or
(b) when a review opportunity arises,
the supply made pursuant to a contract with no opportunity to
review shall be treated as a zero-rated supply:
Provided that—
(A) the supplier and recipient of the supply are registered
persons; and
(B) the supply is a taxable supply.
(3) For the purposes of this section—
(a) "contract with no opportunity to review" means any
written contract or agreement which has no provision
for a general review of the consideration for the supply
for such a period until a review opportunity arises;
(b) "review opportunity" means an opportunity that arises for
the supplier under the contract, acting either alone or
with the agreement of one or more of the other parties
to the contract, to—
(i) change the consideration directly or indirectly
because of the imposition of the tax;
(ii) conduct, on or after the appointed date, a
general review, renegotiation or alteration of the
consideration; or
(iii) conduct, before the appointed date, a general review,
renegotiation or alteration of the consideration
that takes account of the imposition of the tax.
Progressive or periodic supply
192. (1) Where any supply is made under an agreement for a
period or progressively over a period whether or not at regular
intervals and that period begins before the appointed date and ends
on or after the appointed date, the proportion of the supply which
is attributed to the part of the period on or after the appointed
date shall be chargeable to tax.
(2) Where the supply under subsection (1) is a supply of
services, the supply shall be taken to be made continuously and
uniformly throughout the period of that agreement.
(3) This section shall not apply to—
(a) a supply of a warranty that relates to goods or services
whether expressed, implied or required by law, where
the value of the warranty is included in the price of the
goods or services;
(b) a provision of services where service tax has been paid
on the services;
(c) any contract with no opportunity to review under
section 191.
Rights granted for life
193. (1) This section shall apply where—
(a) a taxable person makes a supply of services under an
agreement;
(b) the agreement provides whether expressly or implicitly
that a right is to be granted or exercisable for the rest of
the person’s life or for a period of not less than thirty
years; and
(c) the rights is granted or first exercisable before the appointed
date.
(2) Where any payment for rights granted or exercisable
for the rest of the person’s life or for a period of not less than
thirty years is paid before the appointed date by existing or new
members of clubs, organisations, associations and other bodies
for any rights, the payment for the rights shall not be chargeable
to tax.
Refund of sales tax for goods held on hand
194. (1) Subject to subsection (3), a person is entitled to a
special refund equal to the amount of sales tax in respect of the
goods held on hand subject to the following conditions:
(a) the claimant is a registered person under section 20 as
at the appointed date;
(b) the claimant on the appointed date holds goods for the
purpose of making a taxable supply;
(c) the goods are taxable under the Sales Tax Act 1972 and
the sales tax has been charged or paid; and
(d) the claimant must hold the relevant supplier’s invoice
proving that the claimant is the recipient for which sales
tax has been charged or import documents proving that
the claimant is the importer, consignee or owner for
which sales tax has been paid.
(2) In the case where—
(a) the goods are purchased from suppliers other than a
licensed manufacturer;
(b) the goods are taxable under the Sales Tax Act 1972;
and
(c) the invoice held by the person for the goods purchased
does not show that the sales tax has been charged,
he is entitled to a special refund equal to twenty percent of the
amount shown on the invoice multiplied by the applicable sales
tax rate subject to the following conditions:
(A) the claimant is a registered person under section 20 as
at the appointed date; and
(B) the claimant on the appointed date holds goods for the
purposes of making a taxable supply;
(3) Where the claimant is entitled to a special refund under
subsection (1) and the sales tax he has been charged is unpaid
to the supplier at the end of the period of six months from the
date of invoice, he shall repay the amount as his output tax in
the return for taxable period following the end of the six months
period.
(4) The special refund shall not apply to—
(a) goods which have been capitalised under generally accepted
accounting principles;
(b) goods which have been used partially or incorporated
into some other goods;
(c) goods held for hire, goods held for other than business
use and goods not for sale or exchange;
(d) goods on which sales tax has been paid under the Sales
Tax Act 1972 before the appointed date and subsequently
to be exported after the appointed date where a claim
for drawback on the sales tax paid is to be made under
section 29 of the same Act.
Claim for special refund
195. (1) Any claim for a special refund under section 194 shall
be notified to the officer of goods and services tax in a form
as may be determined by the Director General not later than six
months from the appointed date.
(2) Where the amount of special refund under subsection (1)
is—
(a) less than ten thousand ringgit, the claimant shall furnish
to the officer of goods and services tax a statutory
declaration certifying the amount of the special refund;
or
(b) ten thousand ringgit or more, the claimant shall furnish to
the officer of goods and services tax an audit certificate
signed by a chartered accountant certifying the amount
of the special refund.
(3) Subject to subsection (4), the special refund shall be
refunded quarterly in equal instalments over a period of two years
or any shorter period as the Director General may determine.
(4) Where any information on the claim provided by the claimant
is found to be false, inaccurate, misleading or misrepresented, he
shall be taken not to have been entitled to a special refund and
it shall be lawful for the Director General to recover any refund
which has been paid to him.
(5) Where a claim has been made under subsection (1), the
goods shall be deemed to have been given credit for input tax
and all provisions of this Act shall apply accordingly.
Offsetting unpaid sales tax or penalty against special
refund
196. Notwithstanding any provision of this Act or any other
written law, where any person has failed to pay, in whole or
in part, any amount of sales tax due and payable or penalty
payable under the Sales Act 1972 (referred to as unpaid tax in
this section), the Director General may set off, against that unpaid
tax or penalty, any amount or any part of any special refund to
that person under this Act and shall treat any amount set off as
payment received from that person.
Adjustments for sales tax deduction made under section 31b
of Sales Tax Act 1972
197. (1) Where a manufacturer who has been licensed under
the Sales Tax Act 1972 is eligible to deduct sales tax under
section 31b of the same Act and regulation 19c of the Sales Tax
Regulations 1972 [P.U. (A) 55/1972], the amount of sales tax paid
may be counted as his input tax provided that he is registered
under this Act.
(2) Where a purchaser who is registered under this Act has
claimed a special refund for goods held on hand and subsequently
returns the goods to the licensed manufacturer, he shall account
the amount of special refund as his output tax.
Construction agreements made before the appointed date
198. (1) This section shall apply to the extent that a supply of
goods or construction services which relates to the construction,
major reconstruction, manufacture or extension of a building or
of a civil engineering work by the supplier, and the goods or
construction services are—
(a) supplied in accordance with a written agreement made
before the appointed date; and
(b) made available to the recipient on or after the appointed
date.
(2) The value of all work and materials permanently incorporated
in or affixed on the site of the building or civil engineering work
in accordance with the agreement shall be determined as at the
beginning of the appointed date.
(3) Tax shall be due and payable on the supply to the extent
that the value of the supply exceeds the value determined under
subsection (2).
(4) For the purpose of determining the value under subsection (2),
a taxable person shall furnish to the officer of goods and services
tax a certificate signed by any authorized person as provided under
any written law, certifying the value of all work and materials
permanently incorporated in or affixed on the site of the building
or civil engineering work.
(5) This section shall only apply to the extent that the value
referred to in subsection (2) is determined—
(a) in a manner specified by the Director General; and
(b) on or before the end of the supplier’s first taxable period
after the appointed date or a later date allowed by the
Director General.
Retention payments
199. Where any contract for the supply of goods or services
before the appointed date provides for the retention of any part
of the consideration by a person pending full and satisfactory
performance of the contract, or any part of it, by the supplier,
the retention payment in respect of any supply made after the
appointed date shall be chargeable to tax.
Unredeemed vouchers
200. Goods or services supplied after the appointed date in
redemption for vouchers issued before the appointed date shall
be chargeable to tax.
Supplies from machine operated by coins, token, etc.
201. A supply of goods or services from any machine or device
operated by coins, tokens and the like is treated as follows:
(a) the first removal of the collection within one week
beginning on the appointed date shall not be subject
to tax and any subsequent removal within one week
beginning on the appointed date shall be deemed to be
tax inclusive; and
(b) any removal of the collection after one week beginning
on the appointed date shall be deemed to be tax
inclusive.
First schedule
[Section 4]
MATTERS TO BE TREATED AS A SUPPLY OF GOODS OR A SUPPLY OF SERVICES
Transfer
1. (1) Any transfer of the whole property in goods is a supply of goods but
subject to subparagraphs (2) and (3) the transfer—
(a) of any undivided share of the property; or
(b) of the possession of the goods,
is a supply of services.
(2) If the possession of goods is transferred—
(a) under an agreement for the sale of the goods; or
(b) under an agreement which expressly stipulates that the property will
pass at some time in the future,
it is a supply of goods.
(3) In the case of land, the alienation, transfer or surrender under title is
a supply of goods.
Treatment or process
2. The production of goods by applying a treatment or process to another
person’s goods is a supply of services.
Utilities, etc.
3. The supply of any form of power including electricity and the supply
of gas, water, refrigeration, air-conditioning or ventilation is a supply of
goods.
Transfer, etc., of business assets
4. (1) Subject to subparagraph (2), where goods forming part of the assets
of a business are transferred or disposed of by or under the directions of the
person carrying on the business so as no longer to form part of those assets,
whether or not for a consideration, the transfer or disposal is a supply of
goods by the person.
(2) Subparagraph (1) does not apply where the transfer or disposal is—
(a) a gift of goods made in the course or furtherance of the business
made to the same person in the same year where the total cost to
the donor is not more than five hundred ringgit; or
(b) a gift, to an actual or potential customer of the business, of an industrial
or commercial sample in a form not ordinarily available for sale to
the public.
(3) Where by or under the direction of a person carrying on a business,
goods held or used for the purposes of the business are put to any private use
or are used, or made available to any person for use, for any purpose other
than a purpose of the business, whether or not for a consideration, the usage
or making available of goods is a supply of services.
(4) Subparagraphs (1) and (3) shall not deem anything done not for a
consideration as a supply except where the person who is carrying on a
business is entitled to credit under section 38 on the supply or importation
of the goods.
(5) The supply of goods in subparagraph (1) or the supply of services in
subparagraph (3) is to be treated as made in the course or furtherance of the
business, and in the case of a business carried on by an individual—
(a) subparagraph (1) shall apply to any transfer or disposal of goods in
favour of himself personally; and
(b) subparagraph (3) shall apply to goods used or made available for use
by himself personally.
(6) Where tax charged on any goods which is excluded from any credit
under subsection 38(12) and a taxable person is making a taxable supply of
the goods, any use of the goods by him in the course or furtherance of the
business shall be treated as a supply of goods.
(7) Where any goods, forming part of the business assets of a taxable
person, are sold by any other person who has the power to do so to recover
any debt owed by the taxable person, the goods shall be deemed to be supplied
by the taxable person in the course or furtherance of his business.
(8) Subject to subparagraph (9), where any person ceases to be a
taxable person, any goods forming part of the assets of any business carried
on by him shall be deemed to be supplied by him in the course or
furtherance of his business immediately before he ceases to be a taxable
person, unless—
(a) the business is transferred as a going concern to another person under
section 69; or
(b) the business is carried on by a personal representative who is deemed
to be a taxable person under section 31.
(9) Subparagraph (8) does not apply to any goods where the person who
ceases to be a taxable person can show to the satisfaction of the Director
General—
(a) that no credit for input tax in respect of the supply or importation of
the goods has been allowed to him; and
(b) that the goods were not acquired by him as part of the assets of a
business which was transferred to him as a going concern by another
taxable person.
Supply of services to connected persons
5. Where a supply of services is made not for a consideration by a
taxable person to a connected person as referred to in the Third Schedule not
being an employee and the connected person is not entitled to a credit under
section 38 on the supply, the supply to the connected person is a supply of
services.
SECOND SCHEDULE
[SECTION 4]
MATTERS TO BE TREATED AS NEITHER A SUPPLY OF GOODS
NOR A SUPPLY OF SERVICES
Transfer of going concern
1. The supply of business assets to a person under section 69 is treated as
neither a supply of goods nor a supply of services if the assets are to be used
by transferee in carrying on the same kind of business, whether or not as part
of any existing business, as that carried on by the transferor or where the
supply to whom he transfers relates to part of his business only as a going
concern, that part of business shall be capable of separate operation and the
transferee is already, or immediately becomes as a result of the transfer, a
taxable person.
Pension, provident or social security fund
2. Any contribution made to the pension, provident or social security fund
under any written law shall be treated as neither a supply of goods nor a
supply of services.
Supply by any society or similar organisation
3. The supply of any goods or services by any society or similar organisation
registered under any written law shall be treated as neither a supply of goods
nor a supply of services where—
(a) the supply to its members relates to its aims and objectives and
available without payment other than a membership subscription
and the value of the supply is nominal; or
(b) the supply to a donor or sponsor has no commercial value.
Supplies excluded from any credit
4. Where the whole or any part of tax charged on any supply or importation
of goods is excluded from any credit under subsection 38(12), the subsequent
supply of the same goods shall be treated as neither a supply of goods nor a
supply of services.
THIRD SCHEDULE
[SECTION 15]
VALUE OF SUPPLY OF GOODS OR SERVICES
Open market value
1. (1) The open market value of any supply of goods or services shall be
in the following hierarchy:
(a) the open market value of any supply of goods or services shall be
the consideration in money which the supply of those goods or
services would generally fetch if supplied substantially under the
same circumstances at or about the same time in Malaysia, being
a supply freely offered and made between persons who are not
connected persons;
(b) where the open market value of any supply of goods or services cannot
be determined under subparagraph (a), the open market value shall
be the value of a similar supply in Malaysia, being a supply freely
offered and made between persons who are not connected persons;
(c) where the open market value of any supply of goods or services cannot
be determined under subparagraph (a) or (b), the open market value
shall be determined using the reasonable means and on the basis of
data available in Malaysia which provides a sufficiently objective
approximation of the consideration in money which could be obtained
for the supply of those goods or services;
(2) Where—
(a) the value of a supply made by a taxable person for a consideration
in money or for a consideration not wholly consisting of money is
less than its open market value;
(b) the person making the supply is connected with the person to whom
it is made; and
(c) the supply is a taxable supply and the person to whom the supply
is made is not entitled to credit under sections 38 and 39 for the
whole or any part of the tax on the supply,
the value of the supply shall be taken to be its open market value.
(3) For the purpose of subparagraph (1)(b), "similar supply" means any
other supply of goods or services that closely represents the supply being
valued in respect of materials, components, parts and characteristics and are
functionally and commercially interchangeable with the supply being valued
having regard to the quality and reputation of the other supply and the supply
being valued.
(4) For the purpose of this paragraph, "open market value" includes any
tax charged and levied on the supply under section 9.
Connected persons
2. (1) Persons shall be deemed to be connected if—
(a) they are officers or directors of one another’s business;
(b) they are legally recognised partners in business;
(c) they are employer and employee;
(d) any one person directly or indirectly owns, controls, or holds five
per cent or more of the outstanding voting stock or shares of both
of them;
(e) one of them directly or indirectly controls the other;
(f) both of them are directly or indirectly controlled by a third person;
(g) together they directly or indirectly control a third person; or
(h) they are members of the same family.
(2) Persons shall be deemed to be members of the same family if—
(a) they are connected by blood relationship within the fourth degree of
relationship;
(b) they are married to one another or if one is married to a person who
is connected within the fourth degree of relationship to the other;
or
(c) one has been adopted as the child of the other or as a child of a
person who is within the third degree of relationship to the other.
(3) A trustee in a settlement is connected with—
(a) any individual who in relation to the settlement is a settlor;
(b) any person who is connected with such an individual; and
(c) a body corporate which is connected with that settlement.
Token, stamp (other than postage stamp) or voucher
3. Where a right to receive goods or services for a monetary value stated
on any token, stamp (other than postage stamp) or voucher is granted for a
consideration, the consideration shall be disregarded except to the extent, if
any, it exceeds the monetary value.
Business assets
4. Where there is a supply of goods by virtue of—
(a) subparagraph 4(1) of the First Schedule not for a consideration; or
(b) subparagraph 4(8) of the First Schedule,
the value of the supply shall be the open market value.
Foreign exchange
5. Where any sum relevant for determining value is expressed in a currency
other than Ringgit, it is to be converted into Ringgit at the selling rate of
exchange prevailing in Malaysia at the time when the supply takes place or
in the case of the import of goods, at the rate of exchange determined by the
Director General at the time applicable for the calculation of customs duty or
excise duty and valuation.
Value of supply based on retail price under certain circumstances
6. (1) Where—
(a) the whole or part of a business carried on by a taxable person consists
in supplying to a number of persons goods to be sold, whether by
them or others, by retail; and
(b) those persons are not taxable persons,
the Director General may by notice in writing to the taxable person direct
that the value of any such supply by him after the giving of the notice or
after such later date as may be specified in the notice shall be taken to be
its open market value on a sale by retail.
(2) A notice under subparagraph (1) may be varied, withdrawn or cancelled
by the Director General by a further notice given in writing.
Value of supply of goods from a person licensed under section 65a of
Customs Act 1967 or operating in a free industrial zone under paragraph
10(1)(b) of Free Zones Act 1990 [Act 438]
7. Where a taxable supply of goods is made by a person licensed under
section 65a of the Customs Act 1967 or a person operating in a free industrial
zone under paragraph 10(1)(b) of the Free Zones Act 1990 to any person who
is not licensed under section 65a of the Customs Act 1967 or to any person
not operating in a free industrial zone under paragraph 10(1)(b) of the Free
Zones Act 1990, the value of the goods shall be the value as determined under
section 16.
FOURTH SCHEDULE
[SECTION 133]
NON-APPEALABLE MATTERS
The Goods and Services Tax Appeal Tribunal shall not have jurisdiction to
hear appeals against—
(a) any matter which is inherent of a statutory restriction under this
Act;
(b) any direction to treat persons as a single taxable person under section
23;
(c) any refusal to voluntary registration under section 24;
(d) any refusal to group registration under section 27;
(e) any matter relating to reassignment of the taxable period under
subsection 40(4);
(f) offsetting tax against refund under section 46;
(g) any seizure and selling of any goods for recovery of any amount
under section 48(2);
(h) any refusal to payment by installment under section 52;
(i) any decision to reduce or disallow any refund under subsection
58(2);
(j) any refusal to refund an amount paid by any person under subsection
58(5);
(k) any refusal to remit any penalty or surcharge under subsection
63(2);
(l) any refusal to approve any application for any scheme under Part
VIII;
(m) any advance ruling made under section 78
(n) the exercising of powers under Part X;
(o) the compounding of offences under section 127; and
(p) any matter relating to approval of reward by the Director General
under section 175.
EXPLANATORY STATEMENT
The Goods and Services Tax Bill 2009 ("the proposed Act") seeks to provide
for the imposition and collection of goods and services tax (GST) and for
matters connected therewith. The GST is a broad-based consumption tax based
on a value-added concept. With the coming into operation of section 9 and
Parts XVI and XVII of the proposed Act ("the appointed date"), the GST will
replace the sales tax and the service tax currently imposed and collected under
the Sales Tax Act 1972 and the Service Tax Act 1975. Unlike the present
sales tax which is a single stage tax, the GST is a multi-stage tax. Payment of
tax is made in stages by the intermediaries in the production and distribution
process. The tax itself is not a cost to the intermediaries and does not appear
as an expense item in their financial statements.
GST covers all sectors of the industry and is a tax on final consumption of
goods and services. It is collected through a credit system where GST incurred
on inputs is offset against GST charged on outputs.
2. Part I of the proposed Act deals with preliminary matters.
Clause 1 provides for the short title and the power of the Minister to
appoint the date of commencement of the proposed Act.
Clause 2 contains the definitions of the words and expressions used in the
proposed Act.
Clause 3 seeks to provide for the general meaning of business in the
proposed Act which includes the activities of clubs and similar organizations,
and paid admission into premises. This clause also seeks to extend the meaning
of business to include the termination of business and disposal of assets or
transfer of business as a going concern to be a supply made in the course or
furtherance of business, but excludes employment under contracts of service
and hobbies.
Clause 4 seeks to provide for the meaning of supply and the supply of
goods or the supply of services, as well as matters that are to be treated as
a supply of goods or a supply of services as listed in the First Schedule and
matters that are to be treated as neither a supply of goods nor a supply of
services as listed in the Second Schedule. This clause also gives power to
the Minister to amend the First and Second Schedules.
3. Part II sets out the administration of the GST.
Clause 5 seeks to provide that the Director General has superintendence over
all matters relating to GST. Officers of customs with the rank of Superintendent
or higher shall have and exercise all the powers of the Director General other
than excepted powers.
Clause 6 seeks to require officers of goods and services tax to identify
themselves when performing their duties and any person may refuse an order
made by the officers if they do not identify themselves. This clause also
provides that unlawfully wearing, using, possessing or displaying an authority
card or badge of an officer of goods and services tax is an offence.
Clause 7 seeks to provide that all officers of goods and services tax shall
be deemed to be public servants.
Clause 8 deals with the confidentiality of all documents handled by officers
of goods and services tax or any other government officers having official
duties. It shall be an offence for any person who misuses any information or
documents other than for the purposes of carrying on his duties. This clause
allows the officer of goods and services tax not to divulge any information
or document to any person except in the course of carrying out his duties
as an officer of goods and services tax or in the case of prosecution of an
offence in court. The Director General may share information with the Director
General of Inland Revenue and the Chief Statistician in the performance of his
official government duties. This clause also gives the power to the Minister
to disclose any information or document to any person he deems fit.
4. Part III contains provisions relating to the imposition and scope of tax.
Clause 9 seeks to provide for the chargeability of tax on any taxable supply
made in Malaysia by a taxable person in the course or furtherance of business
and includes goods and services supplied locally as well as imported. This
clause places the liability of tax on the person who makes the supply and
provides for GST to be charged and payable on all importation of goods into
Malaysia as if it were customs duty.
Clause 10 seeks to provide for the tax to be charged on the value of the
supply or importation based on the rate of tax as determined by the Minister.
This clause provides for the procedure in fixing the tax rate and a refund of
tax may be made under specified conditions.
Clause 11 seeks to provide for the time of supply rules for the purposes
of chargeability of tax and determines the general time of supply rules for
goods and services. It also determines the time of supply to be triggered when
a tax invoice is issued or payment is received whichever is the earlier. The
time of supply is the date the invoice is issued if the invoice is issued within
21 days after the supply is made. This clause allows the Director General to
determine the time of supply under special circumstances such as when goods
are transferred or disposed of and privately used, one-off use or as and when
it is used. This clause also provides for the special time of supply rules under
certain circumstances and the application of special time of supply rules for
supply made separately and successively as prescribed under the regulations
to be made under the proposed Act.
Clause 12 seeks to provide for the place of supply rules for the purpose
of chargeability of tax and determines the place of supply for goods. The
place of supply is in Malaysia if the supply is made from a place in Malaysia
to another place in Malaysia or if the goods are removed from a place in
Malaysia to a place outside Malaysia. The place of supply is treated to be
outside Malaysia if the goods are brought in from a place outside Malaysia.
This clause also determines the place of supply for services. If the supplier
belongs in Malaysia then the place of supply is in Malaysia.
Clause 13 sets out the treatment of imported services as a supply by and
to the recipient and the manner of accounting for tax on imported services
by a taxable person and any person other than a taxable person.
Clause 14 seeks to determine the country where the supplier or recipient
of services belongs based on his business or fixed establishment or his usual
place of residence in that country. This clause also seeks to provide for any
business establishment to be regarded as belonging in Malaysia if the business
establishment has a branch or agency in Malaysia.
Clause 15 seeks to provide the rules in determining the value of supply
except as provided for in the Third Schedule that is the value of supply to
be the consideration in money excluding tax. It also provides for the value
of supply (which includes excise duty) to be determined by using the open
market value under certain circumstances where there is no consideration or
the consideration is not wholly in money. Where the consideration covers more
than one supply, the clause seeks to require apportioning the consideration
received that is attributable to the supply. This clause seeks to empower the
Minister to amend the Third Schedule and to determine the value of supply
under special circumstances.
Clause 16 seeks to provide for the computation of value of goods imported
for the purpose of charging GST.
Clause 17 seeks to empower the Minister to treat any supply of goods or
services as a zero-rated supply by way of an order published in the Gazette.
The supply of goods if the goods are exported is also treated as a zero-rated
supply. The supply of goods or services which are zero-rated shall be treated
as a taxable supply and shall be charged at zero per cent and in the case of
goods imported into Malaysia no tax is to be charged. This clause provides
for the liability to pay tax and the seizure of goods that are claimed to have
been exported but found in Malaysia.
Clause 18 seeks to empower the Minister to determine any supply of
goods or services to be an exempt supply by way of an order published in
the Gazette whereby no tax is to be charged on the exempt supply and the
exempt supply goods which are imported into Malaysia.
5. Part IV sets out the provisions for the registration of taxable persons.
Clause 19 seeks to provide for the general provisions for the registration of
taxable persons. It also provides for any reference to a supply to be confined
to a supply made for business purposes and that the value of the supply would
be taken as tax exclusive.
Clause 20 seeks to empower the Minister to determine the threshold level
for mandatory registration by way of an order published in the Gazette. This
clause provides for the computation of annual turnover for the purposes of
determining the liability to be registered. The value of supplies made during
the period in which the taxable person was previously registered for the
purposes of calculating the annual turnover is excluded. The value of sale
of capital assets, imported services and supplies made within or between
designated areas for the purpose of determining the liability to be registered
is also excluded. This clause also provides for the use of a prescribed form
in making an application to be registered.
Clause 21 seeks to require a person to notify his liability to register within
28 days from the end of his liability to register and the registration date to
start on the first day after the month in which he makes the notification
to register or an earlier date as may be agreed. This clause also requires a
person to notify his liability to the Director General within 28 days from the
date when the business is transferred and Director General shall register him
accordingly. The Director General may predetermine a registration date if the
person fails to notify his liability to register. Any reference to registration of
persons shall refer to registration in a register kept by the Director General.
If a person fails to register within the stipulated period he shall be liable to
pay late registration penalty based on a specified percentage rate.
Clause 22 deals with the cessation of a person’s liability to be registered.
This clause further provides that the liability to register does not cease if
the person’s annual turnover has not exceeded the threshold due to expected
cessation of making taxable supplies or suspension of making taxable supplies
for 30 days or more. It excludes the value of sale of capital assets and imported
services for the purpose of determining the end of liability to be registered.
Clause 23 seeks to empower the Director General to direct two or more
taxable persons to be registered as a single taxable person. It explains the
determination of artificial separation of business to take into consideration the
extent of financial, economic and organizational links. The Director General
shall make the direction subject to certain conditions specified. Each direction
is to be served on every person named. This clause also gives power to the
Director General to direct another person other than those persons named in
the earlier direction. Upon the revocation of a registered person (to end his
liability) if he is named as one of the persons in the direction, he together with
all other persons shall be registered as a single taxable person. The persons
named in the direction are to be known as constituent members after they are
registered. It stipulates the responsibilities of the single taxable person and the
treatment of constituent members as a partnership. The Director General may
disregard a person to be a constituent member and that person shall cease to
have any liability after he has ceased to be a member of the partnership.
Clause 24 seeks to allow for voluntary registration of any person who is
not liable to be registered, subject to certain conditions. Upon registration, the
person shall remain to be registered for a period of not less than two years.
This clause also allows for voluntary registration of a person who makes or
intends to make a taxable supply outside Malaysia. This clause provides for
the use of a prescribed form in making the application to be registered and
enables the Director General to cancel the registration of a person if he does
not make a taxable supply by the stipulated date or he has breached any
conditions imposed.
Clause 25 seeks to require a person to notify the Director General within
a stipulated period if he ceases to make a taxable supply or intends to cease
making a taxable supply.
Clause 26 seeks to allow the Director General to cancel a person’s
registration upon request or notification if he is satisfied that such person
can be deregistered. This clause also allows the Director General to cancel
the person’s registration if he is satisfied that the person has ceased to be
registrable effective from the date he so ceases or such later date or if he is
neither liable nor eligible to be registered.
Clause 27 seeks to allow two or more companies to apply for group
registration if certain conditions are satisfied. The registration of the group shall
be in the name of the representative member. This clause further provides for
the treatment of supplies between members of a group and the joint liability
of every member of a group.
Clause 28 seeks to provide for the registration of partnership in the name of
the firm and that any changes in the partnership shall not affect the registration
and accounting for tax. A partner is liable for any tax due unless he notifies
that he has ceased to be a partner. This clause also seeks to provide that any
service of notice to the firm during the taxable period in which the partner is
liable shall be treated as having been served on him although he has ceased
to be a partner. Further, the serving of notice to the firm shall be deemed to
have been served on a partnership. Any notice given by any partner shall be
deemed as a notice given by all partners of the firm.
Clause 29 seeks to provide for the registration of societies and similar
organizations. Any change in the members shall not affect the registration and
accounting for tax. It also provides for the joint and several responsibility of
the principal office bearers and any member of a committee.
Clause 30 deals with the registration of businesses carried on in branches or
divisions and the conditions and requirements for the registration of business
carried on by branches or divisions. The Director General shall terminate the
registration if they breach certain conditions and also determine the date of
termination of registration. This clause provides for a taxable person to apply
for the termination of registration effective from the date of application or
a later date as determined by Director General and the taxable person shall
remain registered for a period of not less than two years unless the Director
General otherwise allows.
Clause 31 seeks to allow the Director General to deem a personal
representative carrying on business on behalf of a taxable person as a taxable
person himself and limits the tax liability of the personal representative to
the extent of control of the business assets. This clause requires the personal
representative to notify the Director General, within 21 days from the date the
personal representative takes over, the fact of the death, liquidation, receivership,
bankruptcy or incapacity. It also requires the personal representative to set
aside an amount sufficient to pay tax or penalty. The personal representative
shall be personally liable in the event he fails to notify or pay the tax or
penalty and, in case of two or more personal representatives, they shall be
jointly and severally liable.
Clause 32 seeks to exempt a taxable person from registration if he makes
wholly a zero-rated supply and requires any person who is exempted from
registration to notify the Director General within 30 days from the date of
any change in the nature of his supply.
6. Part V contains provisions on accounting, assessment and recovery of
tax.
Clause 33 seeks to require a registered person to issue a tax invoice stating
the amount payable excluding tax, the rate of tax and the total tax chargeable
separately. However, it exempts a registered person from issuing a tax invoice
and allows omission of any prescribed particulars under certain conditions. It
also provides the issuance of a self-billed invoice subject to the approval of
the Director General. This clause also seeks to prohibit the issuance of a tax
invoice for second-hand goods and supply of imported services.
Clause 34 seeks to allow tax invoices to be transmitted or made available
by electronic means.
Clause 35 seeks to require both the supplier and recipient to make adjustments
if the supplier issues a credit note or debit note.
Clause 36 seeks to require a taxable person to keep records in relation to
his tax liability in Malaysia either in the national or English language for
7 years. This clause also seeks to allow for the preservation of records or
information in the manner approved by the Director General. Such records
shall be admissible as evidence in any proceedings.
Clause 37 seeks to require a taxable person to account for tax at the time
of supply and subject to the Director General’s approval, allow a registered
person to account for tax on payment basis. It also empowers the Minister to
make regulations for tax adjustments in respect of the change of accounting
basis.
Clause 38 seeks to allow a taxable person to deduct his input tax from the
output tax in the return. This clause seeks to treat flat rate addition as input
tax and also limit the proportion of tax which is attributable to business to
be counted as input tax. It also allows the Director General to refund any
credit or credit that exceeds the output tax and allows any credit due to be
carried forward to the next taxable period either by application or as directed
by the Director General. The Director General shall withhold the refund if a
taxable person fails to comply with any obligation under the proposed Act
or request made by the Director General. This clause also provides the time
frame for the Director General to make a refund and requires a taxable person
to account any input tax that has been credited or refunded as his output tax
if he fails to pay the consideration to the supplier. It allows a taxable person
to claim back his input tax if he has subsequently paid the consideration to
the supplier. This clause further excludes certain supply of goods or services
from any input tax credit.
Clause 39 seeks to restrict the amount of input tax as credit for the purposes
of making certain supplies only and provides certain exempt supply to be
treated as taxable supply subject to the prescribed conditions.
Clause 40 seeks to allow the Director General to assign the category of
taxable period for the taxable person and assign a different category of taxable
period based on application or by direction. This clause provides for a default
taxable period and allows the Director General to vary the taxable period.
Clause 41 seeks to require a taxable person to account for tax in a return
and furnish it within the stipulated time. A person who has been approved a
varied taxable period has to submit a return within 30 days from the end of
each varied taxable period. A taxable person shall submit a final return within
the stipulated period in the event of deregistration and pay any tax due. This
clause also requires a taxable person to pay for the tax and to furnish a return
whether or not there is tax to be paid. It also provides for contravention of
this clause to be an offence.
Clause 42 seeks to require a person other than a taxable person to account
for tax in a declaration and furnish it within the stipulated time. This clause
requires a person other than a taxable person to pay for the tax. It also provides
for the contravention of this clause to be an offence.
Clause 43 seeks to allow the Director General to assess the amount of tax
payable if a taxable person fails to apply for registration, fails to furnish a
return or furnishes an incomplete or incorrect return. This clause limits the
time frame of not more than 6 years after the end of a taxable period for the
Director General to make an assessment except in cases of fraud. It also allows
the Director General to make an assessment where goods are not supplied
or exported unless the taxable person can prove that the goods are lost or
destroyed. The Director General shall increase the amount of tax assessed in
the case where a taxable person pays tax according to the assessed amounts
but continually fails to submit returns. This clause further deems the assessed
amount to be the correct tax that is due from the taxable person unless the
assessment is subsequently withdrawn or reduced. This clause also allows
the Director General to make a supplementary assessment in excess of an
earlier assessment and amend the assessment to ensure the correctness of his
assessment.
Clause 44 seeks to allow the Director General to disregard any transaction
in relation to tax avoidance and deem any person as a taxable person, any
supply as a taxable supply, to place a supply in a specific taxable period and
to fix the value of any supply at open market value. This clause seeks to
exclude any genuine commercial transactions with no intention of obtaining
tax advantage.
Clause 45 sets out the imposition of late payment penalty to any taxable
person or any person other than a taxable person whose tax remains unpaid.
Clause 46 seeks to allow the Director General to offset any refund against
any unpaid tax or customs or excise duty.
Clause 47 empowers the Minister to recover any tax due and payable or
any penalty or surcharge as a civil debt. It also provides for the recovery of
tax from a taxable person when tax is charged and which shall be based on
the amount shown as tax in the invoice and if not shown, it shall be regarded
as tax inclusive. This clause provides for the recovery of tax even though
the invoice is not a tax invoice, the supply did not take place or the person
issuing the invoice is not a taxable person as long as the supply is a taxable
supply. The issuance of a certificate signed by the Director General shall be
taken as sufficient evidence for court proceedings. The clause treats penalty
and surcharge as tax and sets aside the time limit imposed on the collection
of penalties under the Limitation Act 1953, Limitation Ordinance of Sabah
and Limitation Ordinance of Sarawak.
Clause 48 contains provisions for the seizure of goods belonging to a
person at his place of business until the tax, penalty or other moneys have
been paid. This clause provides for the seizure of goods, for the selling of
seized goods after due notice has been given to the owner or his agent and
the proceeds of sale to be applied for the payment of tax, penalty or other
moneys and any surplus to be given to the owner and if the owner cannot be
traced, the balance to be credited into the Consolidated Fund. The Director
General shall dispose the seized goods if there are no bidders for the sale
of the goods. This clause requires a senior officer of goods and services tax
to witness the sale of the seized goods by auction and it allows the sale of
seized goods by auction to be conducted through electronic means.
Clause 49 seeks to require a person holding or owing money due to a
taxable person to pay to the Director General if the taxable person owes tax,
penalty or other moneys and a written request has been made to the person
holding or owing moneys. It deems the payment made by the person holding
or owing moneys to the taxable person to be the payment made by the taxable
person. This clause also provides for any person to give information regarding
any moneys due to the taxable person if the Director General requires such
information.
Clause 50 seeks to allow the Director General to request the police or the
immigration to prevent any person from leaving the country if the person owes
tax, penalty, surcharge or other moneys. The police or immigration may retain
travel documents if a request has been made by the Director General. This
clause requires the Director General to give a notice to the person informing
him that he is prevented from leaving the country and any non-receipt of
the notice does not prevent the police or immigration from performing his
duties. A person is allowed to leave the country if he is able to show proof
that the tax, penalty surcharge or other moneys owed have been paid or he
has furnished a security sufficient to pay the tax, penalty, surcharge or other
moneys owed.
Clause 51 seeks to require a person to give security for the payment of
tax if the Director General thinks it is necessary for the due compliance of
the law.
Clause 52 empowers the Director General to allow any unpaid tax or penalty
to be paid in instalments and if tax is allowed to be paid in instalments,
penalty will not apply to the unpaid tax. A surcharge of ten percent shall be
imposed on the outstanding amount if there is a default in the payment of
any instalment and the outstanding amount together with the surcharge shall
become due and payable on the date the default occurs.
Clause 53 disallows any imported goods to be released from customs control
until tax has been fully paid except as otherwise allowed by the Director
General.
Clause 54 seeks to provide for the liability of directors of companies,
partners of firms or committee members of societies to pay any unpaid tax,
penalty, surcharge or other moneys.
7. Part VI sets out the establishment of the Fund for GST Refund.
Clause 55 seeks to provide the establishment of the Fund for GST Refund
and empowers the Minister to pay into the Fund such amount of tax collected
under the proposed Act. The moneys of the Fund shall be used for the purposes
of refund under clause 38 and Part VII. This clause empowers the Accountant
General to administer the Fund and authorizes the payment of all or part of
the moneys of this Fund into the Consolidated Revenue Account of the Federal
Consolidated Fund.
Clause 56 seeks to set aside the provision of section 14a of the Financial
Procedure Act 1957 in relation to refunds under clause 38 and Part VII.
8. Part VII contains provisions relating to relief, exemption, refund and
remission.
Clause 57 seeks to empower the Minister to relieve any person or class of
persons from the payment of the whole or part of the tax due and payable.
Clause 58 seeks to allow a person who has overpaid any tax, penalty or
surcharge to claim for a refund within six years from the date the tax has
been overpaid and after the claim has been made, the Director General may
refund such tax, penalty or surcharge if he is satisfied that such overpayment
has occurred. This clause further empowers the Director General to reduce or
disallow any refund if the refund may unjustly enrich the claimant. A person
shall make an adjustment in the return if the refund amount does not exceed
one thousand ringgit. Overpayment claim shall be supported by evidence if
required by the Director General. The Director General is not liable to make
any refund if it is found that tax is not due to the claimant.
Clause 59 seeks to provide for a person to be entitled for bad debt relief if
he has not received payment within a stipulated time in relation to the taxable
supply made by him and he has also made sufficient effort to recover the
debt. A person who is entitled to a bad debt relief shall make a deduction or
claim the whole amount of tax if he has not received any payment for the
supply and a certain portion of the tax paid if he has received part payment
for the supply. This clause further requires the person who has been granted
relief from bad debt and subsequently receives payment for the supply that
has been granted relief to repay an amount determined by a formula to the
Director General.
Clause 60 seeks to allow any taxable person to reduce the tax chargeable
on certain supplies such as second-hand goods and impose certain conditions
on such supplies. Tax shall be chargeable on the positive price margin between
goods supplied and goods acquired and tax will not be chargeable if there
is a negative margin. The application of this clause extends to the previous
supply of goods and previous importation of goods which took place before
the appointed date. A supply with no tax chargeable shall include a supply
which is classified as neither a supply of goods nor a supply of services.
Clause 61 seeks to allow the Director General to recover tax, penalty and
surcharge which was wrongly refunded within 6 years from the date on which
the refund was made.
Clause 62 seeks to provide for a Tourist Refund Scheme to enable tourists
to claim refund on goods purchased from an approved outlet in Malaysia and
subsequently taken out of Malaysia.
Clause 63 seeks to allow the Minister to remit the whole or any part of
tax due and payable on a case-by-case basis. This clause further allows the
Director General to remit the whole or any part of the penalty payable or the
surcharge accrued under the proposed Act on the grounds of justification and
equity. It provides for the refund of tax if a person has been granted a tax
remission and has paid the tax.
Clause 64 seeks to empower the Director General to remit the whole or any
part of tax if the goods under customs control are lost, damaged or destroyed.
Tax shall be chargeable on the goods that have been removed from customs
control even though the goods have been claimed to have been lost, damaged
or short in weight, measure, volume or value unless a written notice is given
to the Director General before the goods have been removed from customs
control.
9. Part VIII deals with special cases under the proposed Act.
Clause 65 seeks to provide the non-applicability of the proposed Act to the
Federal and State Governments and to local authorities and statutory bodies
in respect of their regulatory and enforcement functions.
Clause 66 seeks to deem any supply made by an agent on behalf of a
principal to be a supply made by the principal and any supply to an agent on
behalf of a principal to be a supply made to the principal. It further treats any
supply through an agent who acts in his own name as a supply made to the
agent and a supply made by the agent whereas a supply through an auctioneer
who acts in his own name on behalf of a taxable person is treated as a supply
by a taxable person and the auctioneer is required to account for tax in a
tax return if the auctioneer is a taxable person and to account for tax in the
prescribed form if he is a non-taxable person and any supply by the taxable
person to the auctioneer shall be disregarded. This clause also provides for
the accountability of an agent who is acting on behalf of a taxable person
who does not belong in Malaysia for a supply made in Malaysia. Any goods
imported by an agent who is a taxable person and acting in his own name for
a person other than a taxable person is treated to be imported by the agent
and subsequently if he supplies the goods, he is treated as making the supply.
This clause provides for the scope where a person is treated as not belonging
to Malaysia.
Clause 67 seeks to provide for the application of this clause when there
is a change in the rate of tax or any change in the description of zero-rated
supply or exempt supply. The old tax rate shall be charged on the higher of
any payment received or the value of the supply made before the change in the
rate of tax and the charging of the new tax rate on the balance. This clause
also deals with the charging of the old tax rate and the new tax rate in cases
where there is a change of status from taxable supply to exempt supply and
standard rated supply to zero-rated supply and vice versa.
Clause 68 sets out the flexibility of the supplier to charge additional tax
or reduce tax if there is a change in the rate of tax after making a contract
for a taxable supply of goods or services. A change in the rate of tax shall
include a change of status of an exempt supply or zero-rated supply.
Clause 69 seeks to treat the supply made by a transferor to be the supply
made by a transferee and requires a transferor to transfer his tax records to
the transferee if his business is transferred as a going concern. The transferee
is deemed to have claimed his input tax if a business is transferred as a
going concern. The value of a supply of any assets shall be calculated as the
consideration excluding tax. The transferor and transferee shall be entitled to
claim any input tax which is incidental to the transfer of a going concern.
Clause 70 seeks to provide for two or more venturers in a petroleum-related
activity under a joint venture agreement to be treated as a joint venture for
tax purposes. The venturers shall nominate one venturer to be the venture
operator or appoint a joint operating company to be the venture operator. The
registration of the joint venture shall be in the name of the venture operator
and a joint operating company shall be a taxable person for the purposes of
the joint venture. The Director General may cancel the registration of a joint
venture on the grounds of protection of tax revenue. It also provides that all
venturers shall be jointly and severally liable for any tax due from the venture
operator.
Clause 71 seeks to provide for the treatment of tax on imported goods
which are subject to a warehousing scheme, the value of the goods to be
inclusive of customs duty or excise duty and any tax payable on the goods
to be payable at duty point and where no duty is payable, the tax shall be
payable when the goods are removed from the warehouse. Goods shall not
be removed from the warehouse unless customs duty, excise duty and tax
have been paid or in accordance with conditions as imposed by the Director
General.
Clause 72 deals with the Approved Trader Scheme and seeks to allow the
suspension of tax on imported goods under the Scheme and to be accounted
in the taxable period in which the importation takes place.
Clause 73 deals with the Approved Toll Manufacturer Scheme in which the
supply of finished goods from a toll manufacturer to his overseas principal is
disregarded. The principal’s local customer who receives goods from the toll
manufacturer shall account and pay for tax on the supply (if the supply is a
taxable supply) as if he had acquired and supplied the goods himself.
Clause 74 deals with the Approved Jeweller Scheme in which the prescribed
supply of goods by any taxable person to an approved jeweller shall be
disregarded and the approved jeweller shall account and pay for the tax. This
clause shifts the liability to account and pay for tax from the supplier to the
approved jeweller.
Clause75 provides for the Flat Rate Scheme in which the flat rate addition
is deemed as tax on a supply to any registered person.
Clause 76 seeks to treat stock brokers and remisiers as a single entity for
the purposes of registration to alleviate the problem of compliance faced by
remisiers as the majority of them are below threshold and their turnover is
uncertain. The registration of the single taxable person shall be in the name
of the stock broker. This clause provides for the tax treatment of supplies
made, the obligation of lead members and the claim of input tax. The stock
broker shall be liable for the tax due and payable by the single entity.
10. Part IX deals with the GST rulings.
Clause 77 empowers the Director General to make a public ruling on the
application of any provision of the proposed Act to any person or class of
persons or to any arrangement and withdraw any public ruling made. This
clause provides for the application of a public ruling to a person and the
arrangement in certain circumstances.
Clause 78 empowers the Director General to make an advance ruling on
application by any person and the advance ruling takes effect starting on the
date of the ruling. The advance ruling shall be made in a specific manner
and form as determined by the Director General. The advance ruling shall be
applied to a particular type of arrangement and does not apply to any other
type of arrangement by the same person. This clause further provides that a
person may request for a ruling from the Director General on the application of
any provision of the proposed Act to a particular type of arrangement subject
to certain qualifications and the ruling issued under this clause is binding on
the person and the Director General.
Clause 79 provides for the finality of an advance ruling issued to any
person and no appeals shall be made thereafter.
Clause 80 seeks to treat two or more different advance rulings on the same
subject matter to be void.
Clause 81 sets out the non-application of an advance ruling from the date
the provision of the proposed Act is amended or repealed if such provision
of the proposed Act is contained in the advance ruling.
11. Part X contains provisions relating to enforcement.
Clause 82 empowers officers of goods and services tax to investigate the
commission of an offence under the proposed Act.
Clause 83 seeks to provide the senior officer of goods and services tax with
access to any place or premises. This clause requires the person carrying on
the business and any other person present at the place or premises to assist
the senior officer of goods and services tax in carrying out his duties.
Clause 84 seeks to provide the officer of goods and services tax with power
to access recorded information or computerized data.
Clause 85 seeks to allow the Magistrate to issue a search warrant if there
is reasonable cause to believe that an offence has been committed.
Clause 86 seeks to provide for search made without warrant where there
are reasonable grounds to believe that any goods or documents which may
afford evidence may be removed by reason of delay in obtaining a search
warrant.
Clause 87 deals with the power to stop and search conveyances. The officer
of goods and services tax may stop and examine any conveyance if he has
reason to believe that an offence may be committed and request the person
in charge of the conveyance to open and allow examination.
Clause 88 seeks to provide for the seizure of goods or documents in relation
to an offence. The officer of goods and services tax is required to give notice
in writing of any seizure to the owner of the goods or documents. This clause
also specifies that a seizure shall be applicable to anything contained inside
the receptacle, package or conveyance in which the goods or document are
found and any perishable goods seized may be sold.
Clause 89 seeks to require an officer of goods and services tax to prepare
a list of goods or documents seized.
Clause 90 seeks to provide for the return or disposal of movable goods
subject to certain terms and conditions. A certificate shall be issued when the
movable goods are returned or disposed of. This clause also empowers the
Minister to give specific directions to the Director General on the exercise
of powers involving the return or disposal of movable goods.
Clause 91 seeks to provide for powers of arrest. Certain provisions of the
Criminal Procedure Code are applicable in cases of any person being searched
by any officer of goods and services tax. An arrested person shall be taken
to a police station or detained in the custody of the officer of goods and
services tax and to be photographed or finger printed. This clause sets out
that a person shall be arrested at any time if he is liable to be arrested but
not arrested at the time of committing the offence or he has escaped after an
arrest has been made. However, an arrested person may be released if he has
deposited a reasonable sum of money or bond to ensure his release. A person
who is released on bail shall be rearrested if there are reasonable grounds to
believe that he will jump bail or the surety wishes to be relieved from his
obligation.
Clause 92 seeks to empower a senior officer of goods and services tax to
order any person to assist him or to produce any goods or documents in the
investigation of an offence. However, banker’s books are excluded from the
list of documents when a senior officer of goods and services tax requires a
person to produce documents. A person who has been ordered to assist in an
investigation shall be examined or answer all questions relating to the offence
but he may refuse to answer any question that may incriminate him. He shall
not conceal, destroy, alter or remove any goods or documents and he has to
comply with such order notwithstanding any written law. This clause also
provides for the recording of a statement by any person in writing during the
course of an investigation. The statement recorded is admissible as evidence
during any proceedings in court.
Clause 93 seeks to provide for the admissibility of any statement in court
and the statement may be used in cross-examination or impeaching the
creditability of the person if he stands as a witness but excludes any statement
as evidence if the statement appears to have any element of inducement,
threat or promise. A caution shall be given to a person who is arrested for
an offence. This clause also provides for the admissibility of any statement
made by a person who has been accused of an offence before there is time to
caution him. A person is allowed not to answer any question after the person
has been accused of committing an offence.
12. Part XI deals with various offences and penalties for non-compliance of
the proposed Act.
Clause 94 seeks to provide for the offence of making an incorrect return.
Clause 95 seeks to provide for the offence of evading tax. This clause
further provides for the scope of tax evasion to include obtaining credit for
input tax credit, relief for bad debt or claim in the Tourist Refund Scheme
where the person is not entitled to such credit, relief or claim.
Clause 96 seeks to provide for the offence of improperly obtaining a
refund.
Clause 97 seeks to provide for offences in relation to goods, invoices and
receipts.
Clause 98 seeks to provide for the offence of obstructing an officer of
goods and services tax.
Clause 99 seeks to provide for the offence of refusing to answer questions
or giving false information.
Clause 100 seeks to provide for offences by authorized and unauthorized
persons.
Clause 101 seeks to provide for offences of attempts and abetments.
Clause 102 seeks to provide for general penalty.
Clause 103 deals with offences by bodies of persons. A director, manager,
secretary or partner commits an offence unless he takes all reasonable precautions
to prevent the commission of the offence.
Clause 104 seeks to provide for the liability of a person to pay tax, penalty
or surcharge for which he is liable even though legal proceedings have been
instituted against him.
13. Part XII deals with provisions relating to trials and proceedings.
Clause 105 provides that no prosecution for any offence under the proposed
Act may be instituted except by or with the written consent of the Public
Prosecutor.
Clause 106 seeks to provide that a Sessions Court has the jurisdiction
to try an offence under the proposed Act and to award punishment for the
offence.
Clause 107 seeks to provide that the proposed Act does not prevent
prosecution, conviction and punishment of a person under any other written
law.
Clause 108 deals with the burden of proof.
Clause 109 deals with evidential provisions. This clause provides, among
others that—
(a) any statement purporting to be signed by the Director General or any
authorized officer and its annexure shall be accepted as evidence of
fact in proceedings unless the contrary is proved;
(b) any transcript of any particular in a return or other document relating
to tax shall be admissible as evidence of proof if it is certified by
the Director General or authorized officer;
(c) no statement or document shall be inadmissible as evidence against
a person in proceedings on the ground that the statement was made
under inducement, promise or threat;
(d) a person is presumed to make a false statement or entry, evade tax or
improperly obtain a refund if it is proven that a false statement or
entry has been made in a return or on behalf of any person unless
the contrary is proven.
Clause 110 deals with the evidentiary value of electronic notice. An
electronic notice is admissible as evidence of facts stated in the notice if the
electronic notice is certified by the Director General to contain all information
transmitted through electronic service and is duly authenticated as specified
in the proposed Act or the Evidence Act 1950.
Clause 111 seeks to provide that a certificate signed by the Director General
on the status of registration of a person, submission of return, payment of tax
or the making of public or advance ruling to be evidence of facts as stated
in the certificate and provides for the admissibility of a document produced
by the prosecution in any proceedings as evidence if a certificate stating the
facts in question is signed by an analyst, senior officer of goods and services
tax or any person who is authorized to act on behalf of a Minister.
Clause 112 seeks to require five percent of each description of package
or receptacle containing seized goods to be opened and examined, requires
a maximum of five percent of the seized goods by volume or weight to be
tested and presumes that goods contained in unopened packages or receptacles
are similar as those goods found in the packages or receptacles which have
been opened.
Clause 113 seeks to provide that a certificate of analysis signed by an
analyst to be sufficient evidence of the facts stated in the certificate unless the
accused requires the analyst be called as witness. A copy of the certificate must
be delivered to the accused not less than ten days before the commencement
of the trial.
Clause 114 seeks to provide for that a certificate signed by an officer
responsible for the registration or licensing of vessels or conveyance in
Malaysia or Singapore to be prima facie evidence if it is relevant to ascertain
such facts in proceedings under the proposed Act.
Clause 115 seeks to provide for a document which purports to be a
certificate signed by an officer responsible to ascertain the tonnage or build
of a craft to be admissible as evidence if it is relevant to ascertain such facts
in proceedings under the proposed Act.
Clause 116 seeks to provide for a certificate signed by an officer responsible
for the accuracy of a metre or device measuring petroleum to be admissible
as evidence if it is necessary to prove such facts in proceedings under the
proposed Act.
Clause 117 seeks to provide for the period of imprisonment to be imposed
by any court in respect of non-payment of fines.
Clause 118 seeks to provide for a trial in a court or an appeal in the High
Court to proceed without enquiring into the manner and form of making the
seizure of the goods except where the manner and form of seizure is adduced
as evidence.
Clause 119 deals with the obligation of secrecy in relation to the identity
of informers.
Clause 120 seeks to require a witness not to disclose information relating to
an informer which may lead to the discovery of the informer. It also provides
for a passage in a book, document or paper to be concealed or obliterated to
protect the informer from discovery during inspection of the books, documents
or papers in proceedings and allows the court to require the production of the
original complaint or full disclosure of the informer if the court finds that
the informer has made a false material statement after full enquiry into the
case.
Clause 121 stipulates that all seized goods may be forfeited or released.
Clause 122 seeks to disallow any cost or damage to be awarded in respect
of any seized goods unless the seizure is made without reasonable cause.
Clause 123 deals with the power of the court to order the disposal of
goods seized. This clause mandates the court to forfeit the amount realized
by the disposal or sale of movable goods if an offence has been committed
and provides for the goods forfeited to be given to the officer of goods and
services tax and disposed of as directed by the Director General.
Clause 124 deals with the forfeiture of goods seized in respect of which
there is no prosecution and the proceeds of the sale of the goods.
Clause 125 empowers the Minister upon application through the Director
General to return the goods or refund the proceeds to the owner of the goods
provided the application is made within one calendar month from the date the
goods are forfeited.
Clause 126 deals with the manner of service of summons.
Clause 127 deals with the compounding of offences.
Clause 128 seeks to provide for the court to order a person to pay to the
Director General the amount of tax, penalty or surcharge if he is guilty of an
offence and the tax, penalty or surcharge is recoverable as a fine.
14. Part XIII deals with review and appeal matters.
Clause 129 contains the definitions of the words and expressions used in
Part XIII of the proposed Act.
Clause 130 seeks to allow the Director General to review and revise a
decision made and make a final decision within a stipulated time.
Clause 131 seeks to provide for the establishment of the Goods and Services
Tax Appeal Tribunal ("the Tribunal").
Clause 132 seeks to allow any aggrieved person to appeal against the
decision of the Director General to the Tribunal. This clause also seeks to
provide the grounds which the Tribunal must take into consideration before
entertaining an appeal.
Clause 133 seeks to provide for the jurisdiction of the Tribunal to determine
appeals, excluding matters specified in the Fourth Schedule.
Clause 134 empowers the Minister to appoint a Chairman, such number
of Deputy Chairmen and other members of the Tribunal and determine the
remuneration, terms and the conditions of the appointment of the Tribunal
members. It also provides for the tenure of appointment of the Tribunal
members.
Clause 135 seeks to empower a Deputy Chairman to perform the functions
of a Chairman when the Chairman is unable to perform his duties.
Clause 136 seeks to empower the Minister to revoke the appointment of a
member of the Tribunal for any specified reasons.
Clause 137 seeks to provide that a person appointed as a member of the
Tribunal who wishes to resign must make a notification in writing to the
Minister.
Clause 138 deals with the vacation of office members of the Tribunal. It
also empowers the Minister to replace any member of the Tribunal in the
event of vacancy.
Clause 139 seeks to provide for the appointment of a Secretary, Assistant
Secretary and officers to carry out the functions of the Tribunal and states
that the Chairman has general control of the Secretary, Assistant Secretary
and officers of the Tribunal.
Clause 140 seeks to deem members, officers, the Secretary and Assistant
Secretary of the Tribunal to be public servants.
Clause 141 deals with the hearing of appeals. The minimum number of
members for each panel is three. This clause also provides for the manner in
which decisions are to be made by the panel. It also allows proceedings to be
continued by the remaining members of the panel in the event of the death or
incapability of a member. This clause further provides that the proceedings
of an appeal shall be heard afresh in the event that the presiding person of
an appeal is unable to complete the proceedings.
Clause 142 seeks to empower the Chairman to instruct an appeal to be
heard by only one member of the Tribunal.
Clause 143 requires a member of the Tribunal to disclose his interest
either directly or indirectly in the appeal brought before him and to disqualify
himself in taking part in the proceedings. This clause empowers the Chairman
to appoint another member to hear or dispose of the appeal if he is satisfied
that a member has an interest in respect of the proceedings.
Clause 144 seeks to provide for an appeal not to be heard in any court where
an appeal has been lodged with the Tribunal which is within the Tribunal’s
jurisdiction unless proceedings have commenced in a court before the appeal
was lodged with the Tribunal or the Tribunal has withdrawn, abandoned or
struck out the appeal.
Clause 145 seeks to require the Secretary to give notice of the day, time
and place of a hearing.
Clause 146 seeks to provide for the Tribunal to assist the parties to negotiate
an agreed settlement in relation to the appeal. It states that the Tribunal shall
have regard to any factor that is likely to impair the ability of either or both
of the parties to negotiate an agreed settlement in making an assessment. The
Tribunal shall approve and record the settlement agreed by both parties as
if the decision had been made by the Tribunal. The Tribunal is empowered
to continue the proceedings if both parties are unable to reach an agreed
settlement.
Clause 147 seeks to allow a party to the appeal to conduct his case himself
or appoint another person as his representative and the Director General to
be represented by an authorized officer.
Clause 148 seeks to provide for the Tribunal to seek, get and receive
evidence in any way as the Tribunal thinks fit to assist it in its deliberations
during hearing of an appeal. This clause further provides that any summons
issued by the Tribunal is to be served and enforced as if the summons were
issued by a Sessions Court.
Clause 149 seeks to allow the Tribunal to request for information in
exercising its powers and functions under the proposed Act.
Clause 150 seeks to provide for the Tribunal to make its decision within
a stipulated time. It empowers the Tribunal to review and revise decisions
made by the Director General or to make a new decision and also requires
the Tribunal to give reasons for its decision.
Clause 151 seeks to provide for the Tribunal’s decision and settlement to
be recorded in writing.
Clause 152 seeks to provide that the Tribunal’s decision is final. A decision
by the Tribunal is deemed to be a decision by the Sessions Court.
Clause 153 deals with the manner of disposal of appeals.
Clause 154 seeks to provide for reference of questions of law to the High
Court.
Clause 155 seeks to provide the appellant the right to further appeal if he
is not satisfied with the decision made by the High Court.
Clause 156 seeks to provide that the Tribunal may adopt any necessary
procedure in hearing an appeal.
Clause 157 seeks to provide that no proceedings shall be set aside due to
want of form.
Clause 158 empowers the Tribunal to make a decision as to who should
pay for the costs and to what extent costs are to be paid.
Clause 159 seeks to provide that the Tribunal may order for the disposal
of documents produced during the proceedings.
Clause 160 specifies that no action can be taken against the Tribunal for
anything done in the performance of its functions under the proposed Act.
15. Part XIV contains special provisions on designated areas.
Clause 161 defines the meaning of Malaysia to exclude the designated
areas for the purposes of Part XIV of the proposed Act.
Clause 162 seeks to enable supplies made within and between designated
areas to be disregarded except for the freight services between designated
areas.
Clause 163 seeks to provide for different tax treatment on goods and
services imported into and exported from designated areas or goods and
services supplied to or from designated areas from or to Malaysia.
Clause 164 seeks to provide for tax treatment on goods and services supplied
within Malaysia by a taxable person whose principal place of business is
located in a designated area.
Clause 165 seeks to require a person in charge of a vessel or an aircraft
to declare goods supplied from a designated area to Malaysia.
Clause 166 seeks to enable the collection of tax to be made in designated
areas in respect of goods supplied or to be supplied from the designated areas
to Malaysia.
Clause 167 seeks to empower the Minister to make an order to prescribe
certain supplies as taxable in designated areas and in respect of certain goods or
services when supplied or imported into or exported from designated areas.
16. Part XV deals with miscellaneous provisions.
Clause 168 seeks to empower the Director General or any officer of goods
and services tax to take samples to ascertain the taxability of goods and the
samples may be disposed of in such manner as the Director General may
direct.
Clause 169 requires a person to give information, produce goods or documents
or provide translations as required by an officer of goods and services tax.
Clause 170 seeks to enable the Director General to provide electronic
service for certain transactions and absolves him of any liability for any loss
suffered by a user of electronic service.
Clause 171 seeks to provide for the means and manner pertaining to service
of notices by the Director General and deems a notice to be served if the
notice had been addressed to certain persons at specified addresses.
Clause 172 deals with the authentication of notices.
Clause 173 seeks to provide for free postage for all returns and related
documents sent to the Director General.
Clause 174 deals with tax agents. Only a tax agent may act on behalf of
any person on matters relating to tax under the proposed Act. Where the tax
agent is an individual, he must have his usual place of residence in Malaysia
whereas for a company, a firm, a society, an association or other body of
persons, it must be incorporated or legally constituted in Malaysia.
Clause 175 seeks to enable the Director General to give rewards for services
rendered which leads to the detection of offences under the proposed Act.
Clause 176 seeks to require prescribed forms to be used unless permission
is granted by the Director General to use forms other than the prescribed
forms.
Clause 177 seeks to enable the Director General to charge fees for services
rendered which are not required to be rendered under the proposed Act and
for which no fee is prescribed under any written law.
Clause 178 seeks to provide for the application of the Customs Act 1967 or
the Excise Act 1976 with regards to the importation or exportation of goods.
The proposed Act shall apply if there are differences between the provisions of
the proposed Act and those in the Customs Act 1967 or Excise Act 1976.
Clause 179 seeks to protect the Government from any liability in respect
of goods lost by fire or theft or damaged or other cause while the goods are
in the lawful custody of an officer of goods and services tax unless the loss
is caused by the wilful neglect of the officer of goods and services tax.
Clause 180 seeks to protect officers of goods and services tax from any
liability in respect of goods lost by fire or theft or damaged or other cause
while the goods are in the lawful custody of the officers of goods and services
tax in the course of carrying out their duties under the proposed Act unless
the loss is caused by their wilful neglect or default.
Clause 181 seeks to empower the Minister to make regulations.
17. Part XVI deals with the repeal and savings of the Sales Tax Act
1972.
Clause 182 seeks to provide for the repeal of the Sales Tax Act 1972
and the saving of certain provisions of the Sales Tax Act 1972 to enable the
levying, payment, assessment, refund, remission or recovery of sales tax which
has become payable.
Clause 183 seeks to require a person who is licensed under the Sales Tax
Act 1972 to furnish a final return not later than twenty-eight days from the
appointed date and state and pay the amount of sales tax chargeable in the
final return. This clause also defines the meaning of last taxable period.
Clause 184 seeks to require a person who is licensed under the Sales Tax
Act and not a registered person to account and pay for sales tax on the raw
materials and components acquired free from sales tax but need not account
for sales tax on finished and semi-finished goods when he ceases to be a sales
tax licensee. He must account for the sales tax in his last tax return.
18. Part XVII deals with the repeal and savings of the Service Tax Act 1975.
Clause 185 seeks to provide for the repeal of the Service Tax Act 1975
and the saving of certain provisions of the Service Tax Act 1975 to enable
the levying, payment, assessment, refund, remission or recovery of service
tax which has become payable.
Clause 186 seeks to require a person who is licensed under the Service Tax
Act 1975 to furnish a final return not later than twenty-eight days from the
appointed date and state the full amount of service tax chargeable including
the amount of service tax not stated in preceding taxable periods in the final
return. This clause also defines the meaning of last taxable period.
19. Part XVIII deals with transitional provisions.
Clause 187 seeks to provide for tax not to be charged and levied on any
supply of goods or services before the appointed date. Where before the
appointed date any payment is received in connection with a supply of goods
or services that will be made on or after the appointed date or an invoice
was issued relating to a supply of goods or services that will be made on or
after the appointed date, for the purposes of determining the taxable period
to which output tax or input tax is attributable, the payment is taken to have
been received or the invoice is taken to have been issued, during the first
taxable period after the appointed date. In the case of goods which are not
released from the customs control, the time of importation is taken to be time
the when the goods are released by the officer of customs.
Clause 188 seeks to provide for the liability of a person to be registered
if there is a reason to believe that the total value of his taxable supply in
the month of the appointed date and the next eleven months will exceed the
prescribed threshold. This clause also requires the person to apply to the
Director General to be registered and the application to be made three months
before the appointed date.
Clause 189 seeks to provide that sales tax and services tax shall not be
charged with effect from the appointed date.
Clause 190 seeks to determine that the value of supply of goods and services
which are treated as having taken place after the appointed date shall be in
line with the requirement in clause 15.
Clause 191 seeks to provide for the treatment of any supply which is made
pursuant to any contract with no opportunity to review entered into before or
on the date the proposed Act is passed by the Dewan Negara. A supply shall
be treated as a zero-rated supply if both supplier and recipient are registered
persons, the supply is a taxable supply and the supply must be made before
a review opportunity arises or within 5 years after the appointed date. This
clause also defines "contract with no opportunity to review" and "review
opportunity".
Clause 192 seeks to provide for the chargeability of tax on supply which
is made under an agreement. Only the portion of supply which is attributed
to the part of the period on or after the appointed date shall be chargeable
to tax. In the case of the supply of services, it should be taken to be made
continuously and uniformly throughout the period of that agreement.
Clause 193 deals with the chargeability of tax on the payment for rights
granted or exercisable for the rest of a person’s life or for a period of not
less than thirty years. The right in question relates to the agreement entered
into by a taxable person who makes supply of services. If the payment for
the right is made before the appointed date, it is not chargeable to tax.
Clause 194 seeks to provide for the entitlement for a special refund which
is equal to the amount of sales tax in respect of the goods held on hand if the
claimant holds the relevant supplier’s invoice proving that he is the recipient
for which the sale tax has been charged or the import document proving that
he is the importer, consingnee or owner for which the sales tax has been
paid. For a person not holding such an invoice the special refund to which
he is entitled is based on twenty percent of the purchase value shown on the
invoice multiplied by the sales tax rate.
Clause 195 requires the claimant of a special refund to notify the Director
General not later than six months from the appointed date. The claimant is
also required to have the amount certified by the relevant authority.
Clause 196 seeks to give power to the Director General to offset the unpaid
sales tax or penalty against the special refund.
Clause 197 deals with the adjustments for sales tax deduction made under
the Sales Tax Act 1972.
Clause 198 seeks to deal with the supply of goods or construction services
which are supplied to the recipient on or after the appointed date, in accordance
with the agreement made before the appointed date. This clause explains that
the value of all work and materials shall be determined as at the start of the
appointed date and must be certified by an authorized person. The value is also
determined in the manner as specified by the Director General on or before
the end of the supplier’s first taxable period after the appointed date.
Clause 199 seeks to provide for tax to be charged on retention payment
in respect of supplies made after the appointed date, even though the contract
was entered before the appointed date.
Clause 200 seeks to provide for tax to be charged for voucher redemption
after the appointed date, even though the voucher was issued before the
appointed date.
Clause 201 seeks to provide for treatment of supply of goods or services
from any machine or device operated by coins, token and the like. The tax
is not charged only for the first removal within the first week beginning on
the appointed date and any subsequent removal within one week beginning
on the appointed date shall be tax inclusive. Any removal of collection after
one week beginning on the appointed date shall be tax inclusive.
The First Schedule sets out the matters to be treated as a supply of goods
or a supply of services.
The Second Schedule contains matters to be treated as neither a supply of
goods nor a supply of services.
The Third Schedule deals with the value of supply of goods or services.
The Fourth Schedule seeks to provide for non-appealable matters.
FINANCIAL IMPLICATIONS
This Bill will involve the Government in extra financial expenditure the amount of which cannot at present be ascertained.