When taxes become due and payable
Open ↗(1) The sales tax chargeable under paragraph 6(a) shall be due at the time the taxable goods are sold, disposed of otherwise than by sale or first used otherwise than as material in the manufacture of taxable goods, by the taxable person.
(2) Any sales tax chargeable under paragraph 6(a) which falls due during any taxable period shall be payable within twenty-eight days from the expiration of that taxable period.
(3) Any sales tax chargeable under paragraph 6(b) shall be due and payable—
(a) in the case of goods cleared for home consumption directly at the port of importation, or goods entered for removal to an inland station, and there cleared for home consumption, at the time of final Customs clearance;
(b) in the case of goods removed to a customs warehouse or a licensed warehouse subsequent to importation, at the time of final clearance from such warehouse for home consumption.
(4) Where any taxable person who ceases to carry on business as a manufacturer is succeeded in such business by a person who—
(a) purchases from him any stock of taxable goods which is on hand at the date of cessation, or
(b) acquires such stock as a trustee, or receiver, or liquidator or donee, or beneficiary on the decease of such taxable person,
no sales tax shall be due on such purchase or acquisition, but such person shall be deemed to be a taxable person and required to be licensed under section 13 in relation to such goods for the purposes of this Act.
(5) Where any taxable person who ceases to carry on business as a manufacturer has in stock any taxable goods on which sales tax has not been paid and where subsection (4) does not apply, such person shall include particulars of those goods in the return to be furnished by him for his last taxable period as if such goods had been sold by him during such taxable period, and he shall pay sales tax thereon accordingly.
Sales tax to be recovered as civil debt
Open ↗(1) Without prejudice to any other remedy, any sales tax due and payable and any penalty or surcharge accruing under this Act, may be recovered by the Minister as a civil debt due to the Government.
(2) In any suit to recover the sales tax, penalty, or surcharge, if any, under subsection (1), the production of a certificate signed by the Director General giving the name and address of the taxable person and the amount of sales tax, penalty or surcharge, if any, due by him shall be sufficient authority for the Court to give judgment for the same amount.
(3) 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] or the Limitation Ordinance of Sarawak [Swk. Cap 49], as the case may be, be recoverable as if it were sales 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 or section 3 of the Limitation Ordinance of Sarawak, as the case may require, shall not apply to that penalty or surcharge.
(4) Where an invoice shows a sale of taxable goods as having taken place with sales tax chargeable on the goods, there shall be recoverable from the taxable person who issued the invoice an amount equal to—
(a) that which is shown in the invoice as sales tax; or
(b) so much of the total amount shown as payable as is to be taken as representing sales tax, if sales tax is not separately shown in the invoice,
for the sale of such taxable goods.
(5) Subsection (4) shall also apply where—
(a) the invoice, in which is stated an amount which purports to be sales tax as chargeable, is not an invoice issued under section 17 or 17A;
(b) the invoice was issued by a person who was not a taxable person and who had sold either taxable goods or non-taxable goods for which an amount which purports to be sales tax was chargeable; or
(c) the invoice was issued by a taxable person who had sold nontaxable goods for which an amount which purports to be sales tax was chargeable,
and any amount which purports to be sales tax shall be paid immediately by that person and in default of payment, may be recovered as a civil debt due to the Government.
Penalty for late payment
Open ↗Where any amount of sales tax remains unpaid after the last day on which it was payable under subsection 22(2) or repayable under section 31D, as the case may be—
(a) a penalty equal to ten per cent of such unpaid amount shall thereupon be payable;
*(b) if the sales tax due and payable remains unpaid for more than thirty days after the last day on which it was so payable or repayable the rate of penalty under paragraph (a) on such unpaid sales tax shall be increased by ten per cent for the second period of thirty days after such last day and for every succeeding period of thirty days or part thereof during which such amount remains unpaid to a maximum of fifty per cent. ________________________________________________________
*NOTE—Previously “two per cent” – see Sales Tax (Amendment) Act 1999 [Act A1058].
Goods subject to the control of Customs not to be delivered until sales tax paid as demanded
Open ↗In the case of imported taxable goods, no person shall be entitled to obtain delivery of such goods from the control of the Customs until the sum assessed by the proper officer by way of sales tax on those goods has been paid in full.
Joint and several liability of directors, etc.
Open ↗Where any sales tax, penalty or surcharge is due and payable by—
(a) a company;
(b) a firm; or
(c) a society, an association or other body of persons,
then notwithstanding anything to the contrary in this Act or in any other Act, the directors of such company including persons who were directors of such company, or the partners of such firms, including any persons who were partners of such firm, or the members of such society, association or other body of persons, including any persons who were members of such society, association or other body of persons, during such taxable period, as the case may be, shall together with such company, firm, society, association or other body of persons, be jointly and severally liable for the sales tax, penalty or surcharge payable:
Provided that in relation to a company that is being wound up, the directors of such company shall only be so 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 in relation to the application of the assets of the company in such winding up over the sales tax, penalty or surcharge.
Persons about to leave Malaysia
Open ↗If the Director General has reason to believe that a taxable person is about to leave Malaysia before any sales tax due by him becomes payable in accordance with the provisions of this Act, the sales tax shall, if the Director General deems fit, be payable on such earlier date as the Director General determines and, if the whereabouts of the taxable person are known to the Director General, the taxable person shall be notified accordingly.
Recovery of sales tax, etc., from persons leaving Malaysia
Open ↗(1) Where the Director General has reason to believe that any person is about or is likely to leave Malaysia without paying—
(a) any sales tax payable by him;
(b) any penalty payable by him under section 24;
(c) any surcharge payable by him under subsection 30(1B); or
(d) any other moneys recoverable from him under this Act,
he may issue to any Director of Immigration a certificate containing particulars of the sales tax, penalty, surcharge or other moneys so payable with a request that such person be prevented from leaving Malaysia unless and until he pays the sales tax, penalty, surcharge or other moneys so payable, 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 Director of Immigration who receives a request 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 documents in relation to that person as may be necessary to give effect to the request.
(3) The Director General shall cause a notice of the issue of a certificate under subsection (1) to be served personally or by registered post on the person to whom the certificate 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 certificate has been issued under subsection (1) produces on or after the date of the certificate a written statement signed by the Director General stating that all the sales tax, penalty, surcharge or other moneys specified in the certificate have been paid, or that security has been furnished for its payment, that statement shall be sufficient authority for allowing that person to leave Malaysia.
(5) No legal proceedings shall be instituted or maintained against the Government, a State Government or any other public officer in respect of anything lawfully done under this section.
(6) In this section, “Director of Immigration” means any Director of Immigration appointed under subsection 3(1A) of the Immigration Act 1959/1963 [Act 155].
Power to collect sales tax, etc., from person owing money to taxable person
Open ↗(1) Where any sum by way of sales tax, penalty or surcharge is due and payable by a 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 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 on account of some other person for payment to the taxable person; or
(d) any person having authority from some other person to pay money to the taxable person,
to pay to him forthwith, or within such time as the Director General allows, such money (not being salary or wages due or accruing due to the taxable person) or so much thereof as is sufficient to pay the sum due and payable by the taxable person as aforesaid.
(2) All payments made pursuant to a 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 of all other persons concerned.
Drawback
Open ↗Drawback of the full amount of sales tax paid in respect of goods which are subsequently exported from Malaysia may, subject to regulations made under this Act, be allowed.
Payment of sales tax, etc., short paid or erroneously refunded and payments by instalments
Open ↗(1) Where—
(a) the whole or any part of any sales tax, penalty or other moneys payable under this Act has not been paid; or
(b) the whole or any part of any sales tax, penalty or other moneys after having been paid, has been erroneously refunded,
then, provided a demand is made within three years from the date on which the sales tax, penalty or other moneys were payable, or deficient sales tax, penalty or other moneys were paid, or the refund was made, as the case may be, the person—
(aa) liable to pay—
(i) the sales tax, penalty or other moneys; or
(ii) the deficient sales tax, penalty or other moneys; or
(bb) to whom the refund was erroneously made,
shall pay the sales tax, penalty or other moneys, or the deficient sales tax, penalty or other moneys, or repay the refund erroneously paid to him.
(1AA) Without prejudice to subsection (1), any goods belonging to the person referred to in subsection (1) which may be in Excise or Customs control or at a place or places specified in the licence issued under section 13 may be seized until the sales tax, penalty or other moneys, or the deficient sales tax, penalty or other moneys, are paid, or the refund erroneously paid to him is repaid.
(1A) The Director General may allow the sales tax or penalty referred to in subsection (1) to be paid by instalments, under such circumstances as may be prescribed by regulations made under this Act, in such amounts and on such dates as he may determine; and where the amount of sales tax is allowed to be paid by instalments under this subsection, paragraph 24(b) shall not be applicable to such amount as from the date the Director General allows such payment by instalments.
(1B) If there is a default in payment of any one instalment under subsection (1A) on its due date for payment of the balance of amount payable then the whole outstanding balance shall become due and 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 under this Act.
(1C) Nothing in subsections (1A) and (1B) shall prejudice the exercise of the rights and power under this section by the Director General to seize or sell any goods belonging to the person liable to pay such sales tax, penalty or other moneys for recovery of the
amount payable under subsections (1) and (1B) or any outstanding balance thereof.
(2) Should the sales tax, penalty or other moneys or deficiency, or the refund to be repaid remain unpaid, as the case may be, the Director General may after giving not less than 30 days’ notice in writing to the owner or his agent (if the name and address of such owner or agent is known to him) or after due notice in the Gazette (if the name and address of such owner or agent is not known to him) sell such goods.
(3) The proceeds of the sale of any such goods shall be applied to the payment of the sales tax, penalty and other moneys or recovery of the amount due 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 to the Consolidated Fund.
(4) If at the sale of any such goods no sufficient bid is forthcoming to defray the sales tax, penalty or any other moneys payable or deficient sales 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.
(5) Every auction sales shall under this section be conducted by or in the presence of a senior officer of sales tax.
Vendor may apply for refund
Open ↗Subject to such conditions as may be prescribed, where any licensed manufacturer acquires from a person goods, in respect of which sales tax has previously been paid, the vendor may apply to the Director General for a refund of the sales tax so paid in respect of the goods to which the transaction relates, provided such manufacturer holds the approval and authorization of the Director General to acquire such goods free of sales tax; and where the Director General is satisfied that the prescribed conditions have been complied with, he
shall refund the vendor the amount of sales tax previously paid by such person in respect of such goods:
Provided that no such refund shall be allowed unless a claim in respect thereof is made within one year after the date of the transaction to which the claim relates.
Application for deduction by licensed manufacturer
Open ↗(1) A licensed manufacturer may apply to the Director General, in the return furnished by him in accordance with section 19, for the deduction of such amount of sales tax paid in respect of goods purchased by him during the taxable period to which the return relates.
(2) The Director General shall allow the deduction applied under subsection (1) subject to such conditions as may be prescribed.
Credit notes
Open ↗A licensed manufacturer in a return furnished by him in accordance with section 19 may deduct, in accordance with the regulations made under this Act, the amount of sales tax paid in respect of taxable goods returned by a purchaser or discounts subsequently given to the purchaser, from the amount of sales tax accounted for in the return:
Provided that the licensed manufacturer has issued to the purchaser a credit note containing the requisite particulars.
Refund for doubtful debt or bad debt
Open ↗(1) Any person who is or has ceased to be a taxable person may make a claim to the Director General for a refund of the whole or any part of any sales tax paid by him in respect of taxable goods if—
(a) the sales tax has been paid by such person on or after 1 January 2003;
(b) the whole or any part of the sales tax payable to such person has been provided in his accounts as doubtful debt or has been written off in his accounts as bad debts; and
(c) the Director General is satisfied that all reasonable efforts have been made by such person to recover the sales tax.
(2) Where the person mentioned in subsection (1)—
(a) has not received any payment in respect of the sale of taxable goods, such person may make a claim for the whole of the sales tax paid; or
(b) has received any payment in respect of the taxable goods, such person may make a claim for the difference between the sales tax paid and amount calculated in accordance with the following formula:
A x C B
where A is the payment received in respect of the sale of such taxable goods; B is the sale value of such taxable goods plus sales tax payable on such goods; and C is the sales tax payable on such goods.
(3) The person mentioned in subsection (1) may make a claim for the refund within six years from the date the sales tax is paid by him.
(4) For the purpose of this section—
“bad debt” means the outstanding amount of the payment in respect of the sale of taxable goods including the sales tax which is due to the person but has not been paid to, and is irrecoverable by the person;
“doubtful debt” means a provision made with respect to the outstanding amount in the person’s accounts consistent with the generally accepted accounting principles.
Repayment of refund
Open ↗Where a refund of sales tax has been made under section 31C by the Director General to a person and any payment in respect of the sale of taxable goods for which the sales tax is payable is subsequently received by the person, the person shall repay to the Director General an amount calculated in accordance with the following formula:
A x C B
where A is the payment received in respect of the sale of such taxable goods; B is the sale value of such taxable goods plus sales tax payable on such goods; and C is the sales tax payable on such goods.
Return of sales tax or penalty overpaid or erroneously paid
Open ↗It shall be lawful for the Director General, if it is proved to his satisfaction that any sales tax or penalty has been overpaid or erroneously paid under this Act, to order the refund of the sales tax or penalty that was overpaid or erroneously paid subject to such limit as may be prescribed by regulations made under this Act:
Provided that—
(a) no such refund shall be allowed unless a claim in respect of it is made in the prescribed form within one year after the overpayment or erroneous payment was made; and
(b) the Director General may reduce or altogether disallow any refund due under this section to the extent that the refund would unjustly enrich the claimant.
Remission
Open ↗The Minister may, if he thinks it just and equitable to do so, and subject to such conditions as he may deem fit to impose, remit the whole or any part of any sales tax due and payable under this Act, or the whole or any part of any penalty payable under section 24.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
