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Do I need to apply for a sales tax license? How do I apply for a sales tax license? How do I pay? Do I need to file sales tax return?

Payment of Sales Tax

  1. Sales tax on all taxable goods manufactured in Malaysia is due at the time the taxable goods are:
    • sold;
    • disposed (self-use, donation, giveaway, destroyed, etc.) of otherwise than by sale; or
    • first used otherwise than as material in the manufacture of taxable goods


    by the licensed manufacturer. Sales tax which falls due during any taxable period is to be payable within twenty-eight (28) days from the expiration of that taxable period.

    Payment must be made by cash, cheque, bank draft, poster order or money order. You can mail in or provide your payment in person at the sales tax office.

  2. Sales tax on imported taxable goods for local consumption is due and payable at the time the goods are cleared from Customs Control at the place of importation or Customs warehouse. Sales tax will be calculated and shown on the import declaration together with any customs duties to be paid.


Where any amount of sales tax remains unpaid after the payment due date:
  • a penalty of 10% of such unpaid amount will be payable;
  • if the sales tax due and payable remains unpaid for more than thirty (30) days, the rate of penalty on such unpaid sales tax will be increased by 10% for the second period of thirty (30) days or part thereof subject to a maximum of 50%.

Licensing

Who is Required to be Licensed?
Any person who manufactures taxable goods in the course of business must apply to the Royal Malaysian Customs Department in Form JKED No.1 (General Application Form For Licence) to be licensed as a licensed manufacturer.

The licensing authority on being satisfied that a licence is required, will issue a licence in Form S.T. No.2. There is no fee required for the issuance of a sales tax licence.
Who is Not Required to be Licensed?
A person who manufactures solely any of the goods exempted as licensed in Schedule A of the Sales Tax (Exemption) Order 2013 is not required to be licensed under the Sales Tax Act 1972.

Taxable goods manufacturers whose annual sales turnover does not exceed RM100,000 are exempted from licensing. However, this category of manufacturers must apply for a certificate of exemption in Form S.T. No.6 from being licensed as a licensed manufacturer.

Taxable goods manufacturers whose annual workmanship value is less than RM20,000 are also exempted from licensing.

Manufacturers of taxable goods withing free trade zones, licensed manufacturing warehouse, Labuan, Langkawi and Tioman need not be licensed.

Manufacturers of taxable goods in which manufacturing operations are listed in Schedule B of the Sales Tax (Exemption from Licensing) Order 1997 are exempted from licensing.

Sales Tax Returns


Every licensed manufacturer is required to file a sales tax return in Form S.T. No.3, regardless of whether or not any taxable goods are manufactured, sold, disposed or otherwise than by sales, disposed of otherwise than by use as material in manufacture and whether or not any sales tax is payable for such taxable period.

A taxable period is defined as two (2) calendar months.

Sales tax return must be delivered by a taxable person to the sales tax office within twenty-eight (28) days after the end of taxable period.

The following must be set forth in the sales tax return form:
  • aggregate amount of the sales value of all taxable goods sold during that period;
  • the amount of sales tax payable on those goods; and
  • other particulars as may be prescribed;


and the return must be verified by declaration in Form S.T. No.3.

A licensed manufacturer who fails to submit a sales tax return to the sales tax office within the stipulated time, shall be guilty of an offence against the Sales Tax Act 1972, and such person shall be liable to imprisonment for a term not exceeding twelve (12) months or to a fine not exceeding RM5,000 or to both.

Sales tax will be abolished on March 31, 2015 with the implementation of Goods and Services Tax (GST) on April 1, 2015.


References
  1. The official website of the Royal Malaysian Customs Department (Malay: Jabatan Kastam Diraja Malaysia)

  2. Sales Tax Act 1972 [Act 64]


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Knowledge Base ID :   1542
Last Reviewed :   June 11, 2014
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