The Shoppers Guide handbook is out. This handbook will help the public compare prices of basic necessities before and after implementation of GST. 

There are 500 items in the handbook which has been divided into 6 zones - Central, East, South, North, Sabah and Sarawak zones. 

Get your ebook prepared by the Malaysian Domestic Trade, Cooperatives and Consumerism Ministry http://ebook.kpdnkk.gov.my/

Effect of GST on Maintenance Fees and service fees for apartments and high rise buildings

The service fee or maintenance fees charged on residents living in apartments comes under the definition of taxable services under the GST act 2014.

Attempts are being made to get the Customs Department to exempt the service fees from GST.  If no exemption is given,  it will result in a higher fees or service charges, of at least 6% more.



The Board of Valuers, Appraisers and Estate Agents (Bovaea) are of the view that the fee collected by the Joint Management Body (JMB) or Management Corporation (MC) is for managing the property and not for profit and therefore should not be subjected to GST.

Will the Customs Department give their opinion in time before April 1, 2015?

Actually the bigger issue is, should the maintenance fees be exempted from GST, or classified as Zero rated supply.

If it's classified as exempt supply, then the JMB cannot claim the Input Tax of 6% charged by their suppliers.  The JMB will be forced to increase their service fee collection to cover the higher costs incurred in maintaining their property.   If they are exempted, they do not need to register for GST

If service fees is classified as zero rated supply, then the JMB will be able to claim the input tax charged by their supplier.  But they will be burdened with compliance costs as the GST returns will need to be made every quarter.     
 
Extracted form a report in the Star : No GST  on maintenance fees or service fees if  Customs Department gives the nod
  

Challenges of a GST tax regime

Malaysian GST will be  game changer for Malaysians.  It will radically change the Malaysian tax system and it doesn't look like Malaysians are ready for GST implementation come April 1, 2015.   Are Malaysians hoping that it is going to be an April fool joke? 

Challenge 1 - GST Registration 

The Government's biggest challenge is to get businesses to register under the GST system.  GST  registration opened in June 1, 2014.

As at middle of September 2014, only 40,000 of the expected 300,000 businesses have registered.  Slightly more than 13% have registered.  What about the rest of the businesses who are expected to be government tax collectors? .   

The deadline for GST registration is Dec 31, 2014, a mere 3 months away.    And  87% of businesses  have not registered.

The question we should ask is "why is there a slow take up rate for GST registration"

Could it be:
1. they do not know what is GST
2. they do not know they are required to register
3. they do not know how and where to register


I deal in accounting software.  So far, I have managed to get only about 25% of my customer base to upgrade their accounting software to the GST version.   Out of that number,  only 10% have registered for GST, and have gotten our help to redeem the eVoucher of Rm1000.00 to subsidise the purchase of the GST accounting software. 

So my database reflects the government statistics.  I do have a long way to get the rest of the customers to register for GST, and to claim their share of the GST subsidy.

Challenge 2 - GST awareness 

The bigger challenge for the Government is to promote better understanding of exactly what the GST is about.   People want to know the effect of GST for consumers and for businesses

Read more 


    

GST Training by Malaysia Customs Department

Malaysia  Customs Director-General Datuk Seri Khazali Ahmad said that the department would be conducting a “hand-holding” programme in October 2014 to provide GST registrants with a detailed explanation of the GST.

There will cover 19 industries under the hand-holding programme. These sectors range from agriculture, forestry and fishing to e-Commerce and international services.

Topics to be covered in the hand holding training programme:

• GST specific treatment for the business sector
• implications on cash flow
• impact on pricing policies
• implication to the accounting system
• work flows and process
• documentation requirements particularly tax invoice 
• GST reporting.

GST registration

Businesses can sign up for GST on the GST main website. 

GST Registration opened on June 1.   Todate only only 6,031 out of 300,000 potential registrants had signed up for the GST.  


Businesses are urged to register early, before Dec 31, 2014.  It is mandatory for companies and individual businesses with taxable supplies exceeding RM500,000 annually to register for GST under Section 184 (2) of the GST Act 2014. 


Those who fail to register for GST will face a maximum two-year jail term or a fine not exceeding RM30,0000 or both upon conviction.

The Customs Department will be cross-checking with the National Registration Department and the Companies Commission of Malaysia to ensure that business signing up for the GST are legitimate. The GST system will reject applications from non-existent businesses.


After you register for GST, you will be entitled to attend the hand holding session.

GST registrants are also eligible to apply for a GST e-Voucher from SME Corp worth RM1,000 to purchase a GST compliant software.



Malaysia GST Accounting Software

The GST website has a list of accounting software which has been tested for compliance with Malaysian GST guidelines.

You can also find out more information on approved accounting software from this website : Accounting software Malaysia  .   One such software suitable for Malaysian SMEs and which is  GST ready and GST compliant is MYOB Accounting System.

GST Registration : Status update as at July 2014

According to the Director-General of The Royal Malaysian Customs Department, about 160,000 businesses are expected to register their operations by year-end for implementation of the Goods and Services Tax (GST)..   However, since the GST registration began on June 1, 2014, only 4,000 businesses had voluntarily registered, with 3,900 granted approval for the new tax regime.

The Department will begin to the compulsory registration in September 2014.  The final date for GST  registration is 31 December 2014.

If you are still adopting a 'wait-and-see' mindset in preparing for GST, please do not wait any longer to be GST compliant. You can avoid bottleneck situations that is likely to happen closer to the implementation date.

It normally takes about 18 months for companies to prepare for GST, but businesses now have only nine months from now to April 1, 2014 to prepare for GST.


Companies needed to train their staff on the GST, acquire GST-compliant accounting software and commence trial runs by January 2015.

 Many businesses are unaware that they need to upgrade their accounting software to comply with the GST,  Such software upgrades cannot be done at the last minute, as extensive preparation and training is required.

GST will affect all businesses, whether they sell goods or provide a service.  It will also impact all parts of operations starting from the IT system, procurement, sales and marketing, the price setting department, supplier and customer relationships to cash flow.



Benefits of  registering for GST, early, rather than later 

• Claim your share of the government grant of  RM150 million to assist SMEs in purchasing the GST compliant accounting software or for upgrades, to be GST compliant.   The grant is in the form of a GST eVoucher worth RM1,000, provided by SME Corp Malaysia.
  The Governemnt grant is to encourage SMEs to use an effective and efficient accounting system as well as increase the GST compliance rate.

• Registered businesses would be taken through a hand-holding training programme where you will be given training on  six modules to prepare them for the GST implementation.   The training grant is worth RM100 million to businesses to send their employees for training in 2014 and 2015 on the new tax regime.

Tax benefits to businesses as an indirect result of  GST implementation 

With the GST implementation, businesses can expect to get additional  corporate tax benefits, such as

1. accelerated capital allowance until the year of assessment 2015 for the cost of purchasing ICT equipment and software
2. tax deduction on expenses incurred for training in accounting and ICT related to GST for the years of assessment 2014 and 2015.
3. Reduction in the corporate tax rate from 20 per cent to 19 per cent from 2016 for small businesses and tax deduction for secretarial fees and tax filing fee from 2015.

Further reading :

National GST Conference 2014 organised by Malaysia's national news agency BERNAMA and Tax Advisory and Management Sdn Bhd (TAMS),