Sunday 17 November 2013

How Does GST Work...

 
Businesses making taxable supplies have to be registered under GST if their annual sales turnover has exceeded the prescribed threshold. Only a registered person can charge and collect GST on the taxable supplies of goods and services made by him. GST is charged on the value or selling price of the products. The amount of GST incurred on input (input tax) can be deducted from the amount of GST charged (output tax) by the registered person.

If the amount of output tax is more than the input tax in the relevant taxable period, the difference shall be remitted to the Government. However, if the input tax is more than the output tax, the difference will be refunded by the Government.

What you need to do

GST requires businesses who have exceeded the prescribed threshold to register and to keep records of input and output tax. Businesses report their liability in a specific period called taxable period.
Explore the following sections to understand your responsibilities and obligations as a registrant under GST.

  • Registering your Business
  • Issuing Tax Invoices
  • Accounting for GST
  • Filing Tax Returns
  • Input Tax Credit Mechanism
  • Claiming GST Refunds
  • Paying GST
  • Offences
  • Review and Appeals

    1. Registering your Business

    The first step to being GST-ready is to register for a GST identification number. You need to check whether you are required to register or whether you want to register voluntarily. Persons having businesses with annual sales turnover exceeding RM500,000 are liable to be registered under GST. Persons include an individual, sole proprietor, partnership, company, trust, estate, society, union, club, association or any other organization including a government department or a local authority which is involved in the business of making taxable supplies in Malaysia.

    The annual sales turnover can be determined based on either:
    • The total value of taxable supplies of the current month and the previous 11 months, or
    • The total value of taxable supplies of the current month and the next 11 months.

    You also need to decide on the type of registration best for your business:
    • Voluntary Registration
    • Group Registration.
    • Divisional/Branch Registration

    Deregistration

    You must apply for deregistration of your business within 30 days from the date of the following circumstances when:
    • Your business has ceased; or
    • No longer fulfill the requirements of registration.

    Voluntary Registration

    Any person making a taxable supply and having an annual sales turnover RM500,000 and below is not required to be registered. However, you may voluntarily apply for registration. Voluntary registration is allowable but must remain in the system for at least 2 years.
    Once registered, you are required to charge and collect GST on the taxable supplies and at the same time are entitled to claim input tax credit and eligible to enjoy all facilities provided under the law.

    Group Registration

    Group registration is a facility that allows several companies to group and centralize their administration for the GST accounting purpose. Each company must be registered individually before they can be grouped as a single registered person and each company must be making wholly taxable supply.
    Requirements for group registration :
    • Companies are eligible for group registration if one company controls another company. One company is taken to control another company if the first mentioned company holds directly, indirectly through subsidiaries or together directly or indirectly through subsidiaries more than 50% of the issued share capital of the second mentioned company.
    • One of the members has to be nominated by the group as the representative member of the group.
    • Any taxable supply made by or to a member of the group shall be treated as a supply by or to the representative member.
    • Supplies between group members would be disregarded as a supply.
    • Each member of the group is required to keep proper records as they are jointly and severally liable.

    Divisional/Branch Registration

    A taxable person who is carrying on its business in several divisions or branches upon request and subject to stipulated terms and conditions can be registered in the names of those divisions/branches. This is a facility for any taxable person with a number of self accounting units to register each unit separately for GST.
    Each division/branch will be given a separate GST identification number and make its own returns. However, the taxable person remains accountable for all GST liability of all divisions/branches.

    2. Issuing Tax Invoices

    When you charge GST, you need to issue a tax invoice showing the amount of GST and the price of the supplies separately. The tax invoice has to be issued within 21 days after the time of the supply.
    Particulars to be shown in the tax invoice:
    • The words 'tax invoice' in a prominent place;
    • The invoice serial number;
    • The date of issuance of the invoice;
    • The name (or trade name), address and GST identification number of the supplier;
    • The name and address of the recipient of the supply;
    • A description of the goods and/or services supplied;
    • The quantity or volume of the goods and/or services supplied, for example, litres of petrol, kilos of meat or hours of labour;
    • Any discount offered;
    • The total amount payable excluding tax, the rate of tax and the total tax chargeable shown as a separate amount;
    • The total amount payable including the total tax chargeable.
    • The Director General of Customs may upon request allow the tax invoice to be varied from the above whether in term of particulars in the tax invoice or issuance of other type of tax invoice e.g. simplified tax invoice.

    The Director General of Customs may upon request allow the tax invoice to be varied from the above whether in term of particulars in the tax invoice or issuance of other type of tax invoice e.g. simplified tax invoice.

    Simplified Tax Invoice

    An invoice that does not contain all the particulars as required in the standard tax invoice and subject to the approval of the Director General. Simplified tax invoice can be used by the GST registrant to claim ITC provided the value of the invoice (inclusive GST) does not exceed RM500.
    DG may allow the simplified tax invoice to be issued containing:
    • The name (or trade name), address and GST identification number of the supplier;
    • The date of issuance of the invoice;
    • The invoice serial number;
    • A description of the goods and/or services supplied;
    • The total amount payable including the total tax chargeable; and
    • For each rate of tax chargeable, the gross amount payable including tax and the tax rate applicable

    3. Accounting for GST

    Basically, all taxable persons will be required to account for GST based on accrual (invoice) basis of accounting i.e. all output tax and input tax are to be accounted and claimed based on the time when the invoice was issued or received.
    However, certain categories of taxable persons may be allowed to use the payment (cash) basis of accounting. This facility may be given to businesses who carry out their activities solely on a cash payment basis.
    All business and accounting records relating to GST transactions are to be kept in Bahasa Melayu or English for a period of seven (7) years.

    4. Filing GST Returns

    GST returns must be submitted to the GST office not later than the last day of the following month after the end of the taxable period.
    Taxable period is a regular interval period where a taxable person is liable to account and pay to the government his GST liability. The standard taxable period is on quarterly basis.

     However, a registrant may apply to be placed in other taxable period (monthly or 6 monthly) subject to specific conditions as follows:
    CategoriesPeriods                           Conditions
    Standard Taxable PeriodThree months
    • Applicable to all taxable turnover not exceeding RM5 million
    Non-standard Taxable PeriodOne month
    • Applicable to taxable persons with annual taxable turnover exceeding RM5 million
    • applicable to other taxable persons on request and subject to approval
    Six months
    • Special cases

      5. Input Tax Credit Mechanism

      Businesses have to charge and collect GST on all taxable goods and services supplied to the consumers. Only businesses registered under GST can charge and collect GST.
      Businesses are allowed to claim whatever amount of GST paid on the business inputs by offsetting against the output tax.
      • The excess amount of output tax shall be remitted to the government within the stipulated period.
      • In the case where the amount of input tax cannot be fully recovered, businesses can make a claim for refund from the government.
      • Note:
      • Maximum time period to claim the input tax is 6 years from the date of supply.
      • Input tax credit cannot be claimed on blocked input such as GST paid on passenger motor car, club subscription fee, medical and personal accident insurance premium, medical expenses, family benefits, entertainment expenses except for employees and etc.
      • Apportionment rules have to be applied when the taxable person makes a mixed supply.

      6. Claiming GST Refund

      Any refund of tax may be offset against other unpaid GST, customs and excise duties. Refund will be made to the claimant within 14 working days if the claim is submitted online or 28 working days if the claim is submitted manually.

      7. Paying GST

      If your output tax exceeds the input tax, the difference shall be remitted to the Government together with the GST returns not later than the last day of the following month after the end of taxable period.
       
      Online payments through:
      • Banks (to be appointed).
      • Internet facilities.
      • Manual payment:
        • Payment via cheque/bank draft/money order must be made payable to 'Ketua Pengarah Kastam' and mail to:
            Ketua Pengarah Kastam
            Jabatan Kastam Diraja Malaysia
            Kompleks Kastam Kelana Jaya
            No.22 Jalan SS6/3
            Kelana Jaya 47301
            Petaling Jaya, Selangor
          Or
        • Pay at any nearest GST office counter from 8.00 am - 5.00 pm.

      8. Offences

      Penalties may be imposed if the following offences are committed:
      • Any deficiency on the net tax payable.
      • No GST return is made.
      • A GST return is submitted without payment or a lesser payment;
      • Any refund paid to which there is no proper entitlement.
      • Failure to register.

      9. Review and Appeals

      Any person who is aggrieved by the decision of the officer of GST may apply for a review and revision to the DG within 30 days from the date of notification. Alternatively, such person shall make an appeal to the Tribunal within 30 days from the date of the decision.
      The appeal case can be represented by the taxpayer himself or by any person whom he may appoint. The hearing shall be conducted in a private proceeding unless both parties agree to an open court.
      Sources: Official Website Malaysian Goods & Tax (GST)

    Wednesday 13 November 2013

    What is GST...?

    GST which is also known as VAT or the value added tax in many countries is a multi-stage consumption tax on goods and services.
     
    GST is levied on the supply of goods and services at each stage of the supply chain from the supplier up to the retail stage of the distribution. Even though GST is imposed at each level of the supply chain, the tax element does not become part of the cost of the product because GST paid on the business inputs is claimable. Hence, it does not matter how many stages where a particular good and service goes through the supply chain because the input tax incurred at the previous stage is always deducted by the businesses at the next step in the supply chain.
     
    GST is a broad based consumption tax covering all sectors of the economy i.e all goods and services made in Malaysia including imports except specific goods and services which are categorized under zero rated supply and exempt supply orders as determined by the Minister of Finance and published in the Gazette.
     
    The basic fundamental of GST is its self-policing features which allow the businesses to claim their Input tax credit by way of automatic deduction in their accounting system. This eases the administrative procedures on the part of businesses and the Government. Thus, the Government’s delivery system will be further enhanced.
     
    We need to pay taxes so that the government can finance socio-economic development; which includes providing infrastructure, education, welfare, healthcare, national security etc.
    "Over the past few decades, the worldwide trend has been for the introduction of a multi-stage GST system. Today, almost 90% of the world's populations live in countries with GST, including China, Indonesia, Thailand, Singapore and India."
     
    GST shall be levied and charged on the taxable supply of goods and services made in the course or furtherance of business in Malaysia by a taxable person. GST is also charged on the importation of goods and services.
     
    A taxable supply is a supply which is standard rated or zero rated. Exempt and out of scope supplies are not taxable supplies. GST is to be levied and charged on the value of the supply.
     
    GST can only be levied and charged if the business is registered under GST. A business is not liable to be registered if its annual turnover of taxable supplies does not reach the prescribed threshold. Therefore, such businesses cannot charge and collect GST on the supply of goods and services made to their customers. Nevertheless, businesses can apply to be registered voluntarily.
     
    Almost all countries collect income tax, which is a percentage of what you earn as an individual. Another way the government gets revenue is by collecting tax from business operations, like sales tax and duties on items that are bought or sold.
     
    We need to pay tax so that the government can operate. GST is one method of collecting taxes which works better than others.
     
    Why Gov. implement GST..
     
    GST is proposed to replace the current consumption tax i.e. the sales tax and service tax (SST). The introduction of GST is part of the Government's tax reform programmed to enhance the efficiency and effectiveness of the existing taxation system.

    GST is proven to be a better tax system as it is more effective, efficient, transparent and business friendly and could spur economic growth as well as increase competitiveness in the global market.

    GST is capable of generating a more stable source of revenue to the nation because it is less susceptible to economic fluctuations.

    It is important to replace the existing SST in order to eliminate its inherent weaknesses such as cascading and compounding effects, transfer pricing and value shifting, no complete relief on goods exported, discourage vertical integration, administrative bureaucratic red tape, classification issues and etc.

    Various benefits that GST can offer to Malaysian consumers and businesses are:
    • Improved Standard of Living

      The revenue from GST could be used for development purposes for social infrastructure like health facilities and institutions, educational infrastructures and public facilities to further improve the standard of living.
    • Lower Cost of Doing Business

      Under the current system, some businesses pay multiple taxes and higher levels of tax-on-tax (cascading tax). With GST, businesses can benefit from recovering input tax, thus reducing cost of doing business.
    • Nation-Building

      GST is a better and more efficient method of revenue collection for the government. More funds can be channeled into nation-building projects for progress towards achieving a high income nation.
    • Fairness and Equality

      With the GST, taxes are levied fairly among all the businesses involved, whether they are in the manufacturing, wholesaling, retailing or service sectors.
    • Enhanced Delivery System

      GST will be administrated in a fully computerized environment, therefore speeding up the delivery, especially for refund claims. This makes it faster, more efficient and reliable.
    • Increase Global Competitiveness

      Prices of Malaysian exports will become more competitive on the global stage as no GST is imposed on exported goods and services, while GST incurred on inputs can be recovered along the supplies chain. This will strengthen our export industry, helping the country progress even further.
    • Enhanced Compliance

      The current SST has many inherent weaknesses making administration difficult. GST system has in-built mechanism to make the tax administration self-policing and therefore will enhance compliance.
    • Reduces Red Tape

      Under the present SST, businesses must apply for approval to get tax-free materials and also for special exemption for capital goods. Under GST, this system is abolished as businesses can offset the GST on inputs in their returns.
    • Fair Pricing to Consumers

      GST eliminates double taxation under SST. Consumers will pay fairer prices for most goods and services compared to SST.
    • Greater Transparency

      Unlike the present sales tax, consumers would benefit under GST as they will know exactly whether the goods they consume are subject to tax and the amount they pay for.
     
    Source: Official Website Malaysian Goods & Services Tax (GST)

    "Manusia Seperti Sebuah BUKU...."

    Muka depan adalah tanggal lahir.
    Muka belakang adalah tanggal kematian.


    Tiap lembarannya, adalah tiap hari dalam hidup kita dan apa yg kita lakukan.
    Ada buku yang tebal,
    ada buku yang tipis.


    Ada buku yg menarik dibaca,
    ada yg sama sekali tidak menarik.:'(


    Sekali tertulis, tidak akan pernah bisa di'edit' lagi.
    Tapi hebatnya, seburuk apapun halaman sebelumnya, selalu tersedia halaman selanjutnya yg putih bersih, baru dan tiada cacat.

    Sama dengan hidup kita, seburuk apapun kemarin,
    Allah SWT selalu menyediakan hari yang baru untuk kita. :)


    Kita selalu diberi kesempatan baru untuk melakukan sesuatu yg benar dalam hidup kita setiap harinya.

     Kita selalu bisa memperbaiki kesalahan kita dan melanjutkan alur cerita kedepannya sampai saat usia berakhir, yang sudah ditetapkanNYA. Terima kasih Allah SWT utk hari yg baru ini...O:)

    Syukuri hari ini....
    dan isilah halaman buku kehidupanmu dgn hal2 yg baik semata.

    Dan, jangan pernah lupa, untuk selalu bertanya kepada Allah SWT, tentang apa yang harus ditulis tiap harinya.

    Supaya pada saat halaman terakhir buku kehidupan kita selesai, kita dapati diri ini sebagai pribadi yg berkenan kepadaNYA.

    Dan buku kehidupan itu layak untuk dijadikan teladan bagi anak2 kita dan siapapun setelah kita nanti.

    Selamat menulis di buku kehidupanmu,
    Menulislah dengan tinta cinta dan kasih sayang, serta pena kebijaksanaan..

    Saturday 9 November 2013

    7 Sunnah Hebat......

    Assalamualaikum.

    Dalam kehidupan sehari-hari ada kala kita mungkin telah melampaui batas. Imaginasi kotor, percakapan dan perbuatan yang tidak betul menjadikan kita selalunya semakin jauh dengan Allah SWT. Tetapi itulah kita manusia, tak lari dari kesilapan..dan mujurlah Allah selalu membuka pintu taubat kepada kita, agar dapat kita meneruskan perjalanan menuju akhirat dengan lebih berkat. Hendaknya kita sekurang-kurangnya selalu menjaga Tujuh Sunnah Nabi setiap hari. Ketujuh sunnah Nabi SAW itu adalah:
     
    Pertama:
    Tahajjud, kerana kemuliaan seorang mukmin terletak pada tahajjudnya. Pastinya doa mudah termakbul dan menjadikan kita semakin hampir dengan Allah.
     
    Kedua:
    Membaca Al-Qur’an sebelum terbit matahari, alangkah baiknya sebelum mata melihat dunia, sebaiknya mata membaca Al-Qur’an terlebih dahulu dengan penuh pemahaman. Paling tidak jika sesibuk manapun kita, bacalah ayat 3Qul, atau ayat qursi.
     
    Ketiga:
    Jangan tinggalkan masjid terutama di waktu subuh. Sebelum melangkah kemana pun langkahkan kaki ke mesjid, kerana masjid merupakan pusat keberkahan, bukan kerana panggilan muadzin tetapi panggilan Allah yang mencari orang beriman untuk memakmurkan masjid Allah.
     
    Keempat:
    Jaga sholat dhuha, kerana kunci rezeki terletak pada solat dhuha. Yakinlah, kesan solat dhuha sangat dasyat dalam mendatangkan rezeki.
     
    Kelima:
    Jaga sedekah setiap hari. Allah menyukai orang yang suka bersedekah, dan malaikat Allah selalu mendoakan kepada orang yang bersedekah setiap hari. Percayalah, sedekah yang diberikan akan dibalas oleh Allah berlipat kali ganda.
     
    Keenam:
    Jaga wudhu terus menerus kerana Allah menyayangi hamba yang berwudhu. Kata khalifah Ali bin Abu Thalib, “Orang yang selalu berwudhu senantiasa ia akan merasa selalu solat walau ia sedang tidak solat, dan dijaga oleh malaikat dengan dua doa, ampuni dosa dan sayangi dia ya Allah”.
     
    Ketujuh:
    Amalkan istighfar setiap saat. Dengan istighfar masalah yang terjadi kerana dosa kita akan dijauhkan oleh Allah.
     
    Zikir adalah bukti syukur kita kepada Allah. Bila kita kurang bersyukur, maka kita kurang berzikir pula, oleh kerana itu setiap waktu harus selalu ada penghayatan dalam melaksanakan ibadah ritual dan ibadah ajaran Islam lainnya. Zikir juga merupakan makanan rohani yang paling bergizi, dan dengan zikir berbagai kejahatan dapat ditangkal sehingga jauhlah umat manusia dari sifat-sifat yang berpangkal pada materialisme dan hedonisme.
     
    Sebarkanlah ilmu ini, dan anda tidak akan rugi sedikitpun, sebarkan, semoga ianya memberi manfaat pada semua.