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Date [ 2014-12-12, 04:43 ]

Some details you may have missed on the GST.

GST 2015

(Kuala Lumpur=Koreanpress) Azmi Anuiar = With the closing date just a few days away you would think the majority of the business world would be ready for GST! The Royal Malaysian Customs Department is still making announcements for eligible companies to register themselves. Others are wholly ignorant of what the GST is and how it functions. Here is a quick run through, starting with the obvious.

What is GST?

The General Services Tax (GST) is also known as VAT or the value added tax in many other countries, such as Britain and Singapore...
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 is not added to the cost of the product because the input tax incurred at the previous stage is always deducted by the businesses at the next step in the supply chain.

Why GST?

GST will replace the current sales tax and service tax (SST). As GST is proven to be a better tax system, it is now ready to come into force.It is expected to:
Improve Standard of Living Lower Cost of Doing Business Reduces Red Tape Greater Transparency Fair Pricing to Consumers

Understanding Input & Output Tax

These are the key elements in GST, which is charged on the selling price of the products. The amount incurred on manufacturing a product of service is the input tax. This is deducted as output tax along the supply chain from manufacturer, wholesaler and retailer. Let us say a manufacturer puts in a claim of 6%, as input tax, He is able to reclaim this as an output tax of 6% which is then passed as an input tax to the wholesaler who after his deduction of 6% as output tax passes it to the retailer who also claims his 6% output tax by passing it to the consumer who then just pays the 6% as GST..

In the old SST system, the cost is passed from manufacturer to wholesaler to retailer, who each increase the price as it passes through them with the consumer paying for every increase along the way.

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.

Registration

First step, register for a GST identification number. Persons having businesses with annual sales turnover exceeding RM500, 000 are liable to be registered. 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 payments in Malaysia.

There are:

Voluntary Registration – for those with annual sales turnover of RM500, 000 or below, are not required to register but may voluntarily apply...

Group Registration - allows several companies to group and centralize their administration for 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 supplies.

Divisional/Branch Registration - A taxable person who is carrying on his 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. Each division/branch will be given a separate GST identification number and makes its own returns. However, the taxable person remains accountable for all GST liability of all divisions/branches.

Deregistration

Deregistration of a business may be done within 30 days from the date of the following circumstances when: The business has ceased; or No longer fulfills the requirements of registration.

Filing GST Returns

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.

Exemptions

At the moment, only basic food and household items, educational systems and the healthcare industry are subjected to exemption from GST while tourist can also claim for eligible GST refund via approved refund agents.

Refunds

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.

Offences

Penalties may be imposed for the following offences:

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.

Review and Appeals

Any person who is aggrieved may apply for a review and revision to the Director General 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.

Further Assistance

The Government is serious about implementing the GST and offers a number of easy implementations. Foremost is on Accounting where it has developed accounting software to GST compliance, offers GST training grant and has invited companies to become its accounting software vendor.

Final Word

For more detailed information visit www.gst.customs.gov.my.  The Royal Customs Department has held and is holding a number of conferences, one of which was the Hand-Holding Programme for Manufacturers.  Readers may want to attend one of these to improve their understanding of GST.

Registration began in June 2014. For those still to do so, please register by the end of this year as the closing date is December 31st, 2014.

abc@koreanpress.net

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