Imposition and scope of goods and services tax, etc.
(1) A tax to be known as goods and services tax, shall be charged and levied on—
(a) any supply of goods or services made in Malaysia, including anything treated as a supply under this Act; and
(b) any importation of goods into Malaysia.
(2) Except as otherwise provided in subsections 13(3) and 72(5), tax shall be charged on any supply of goods or services made in Malaysia where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him.
(3) Except as otherwise provided in subsections 65(4) and 65(5), tax chargeable on any supply of goods or services is a liability of the person making the supply and subject to Part V, becomes due and payable at the time of supply.
(4) Tax on any importation of goods into Malaysia shall be charged, levied and payable as if it were a customs duty or excise duty and as if the imported goods are dutiable and liable to customs duty or excise duty.
(5) Where any registered person displays, advertises, publishes or quotes in any manner the price of any supply of goods or services he makes or intends to make, such price shall include the tax that is chargeable on the supply unless the Director General approves otherwise under subsection (7).
(6) Any registered person may apply to the Director General in the form and manner as the Director General may determine to be exempted from displaying, advertising, publishing or quoting in any manner the price inclusive of tax which is chargeable on the supply of goods or services he makes or intends to make.
(7) The Director General may approve in writing an application made under subsection (6) and where an approval has been granted, the registered person shall display, advertise, publish or quote the price exclusive of tax with the words “Price payable is exclusive of GST”.
(8) Any registered person who contravenes subsection (5) or (7) commits an offence.
(9) For the purposes of this Act, “supply of goods or services made in Malaysia” shall be treated as goods or services supplied in Malaysia.
Rate of tax
(1) Tax shall be charged and levied at the rate fixed under this section on the supply of goods or services or on the importation of goods by reference to the value of the supply or importation as determined under this Act.
(2) The Minister may, by order published in the Gazette—
(a) fix the rate of tax to be charged on the supply of goods or services or on the importation of goods; and
(b) vary or amend the rate of tax fixed under paragraph (a).
(3) Any order made under subsection (2) shall, at the next meeting of the Dewan Rakyat, be laid before the Dewan Rakyat and shall, at the expiration of one hundred and twenty days of being so laid or of such extended period as the Dewan Rakyat may by resolution direct, cease to have effect if and insofar as it is not confirmed by resolution passed by the Dewan Rakyat within the said one hundred and twenty days or, if such period has been extended, within such extended period.
(4) Where an order ceases to have effect in whole or in part as provided in subsection (3), any tax charged and levied in pursuance of the order, as the case may be, of such part thereof as ceases to have effect shall, subject to subsections (5) and (6), be refundable to the persons by whom the tax was paid.
(5) Unless the Minister otherwise directs, no tax refundable under subsection (4) shall be refunded, unless the person by whom the tax was paid makes a claim in writing to the Director General within one year from the date on which the order ceases to have effect in whole or in part and the claim shall contain such particulars as the Director General may require.
(6) The Director General may reduce or disallow any tax refundable under subsection (4) to the extent that the refund would unjustly enrich the person by whom the tax was paid.
Time of supply
(1) This section shall apply in determining the time of supply of goods or services except as otherwise provided in this Act.
(2) Subject to subsections (4), (5), (6) and (7), the time of supply of goods shall be—
(a) at the time of removal of the goods if the goods are to be removed;
(b) at the time when the goods are made available to the person to whom the goods are supplied if the goods are not to be removed;
(c) where goods, being sent or taken on approval or sale or return or similar terms, are removed before it is known whether a taxable supply will take place, at the time when it becomes certain that the taxable supply has taken place or twelve months after the removal, whichever is the earlier.
(3) Subject to subsections (4), (5), (6) and (8), the time of supply of services shall be at the time when the services are performed.
(4) Where, before the time applicable under subsection (2) or (3), the person making the supply issues a tax invoice in respect of it or where, before the time applicable under paragraph (2)(a) or (b) or subsection (3), he receives a payment in respect of it, the supply shall, to the extent covered by the invoice or payment, be treated as taking place at the time the invoice is issued or the payment is received, as the case may be, or whichever is the earlier.
(5) Where, within twenty-one days after the time applicable under subsection (2) or (3), the person making the supply issues a tax invoice in respect of it, then, the supply shall, to the extent that it is not treated as taking place at the time referred to in subsection (4) be treated as taking place at the time the invoice is issued.
(6) On the request made in writing by a taxable person, the Director General may in writing, as he deems fit, alter the time at which supplies made by the taxable person are to be treated as taking place.
(7) Where there is a supply of goods by virtue only of a transfer or disposal of business assets under subparagraph 5(1) of the First Schedule, the time of supply is at the time when the goods are transferred or disposed of.
(8) Where there is a supply of services by virtue only of subparagraph 5(3) of the First Schedule, the time of the supply is at the time when the goods are appropriated to the use referred to in the subparagraph.
(9) Notwithstanding subsections (1), (2), (3), (4), (5), (6), (7) and (8), where there is—
(a) a supply of goods or services for a consideration the whole or part of which is determined or payable periodically, or from time to time, or at the end of any period;
(b) a supply of goods for a consideration the whole or part of which is determined at the time when the goods are appropriated for any purpose;
(c) a supply of services by virtue of subparagraph 5(3) of the First Schedule over a period of time;
(d) a supply of goods or services under any prescribed circumstances,
the time at which the supply made in the course or furtherance of any business in Malaysia shall be determined according to the regulations made under this Act.
(10) For any case referred to in subsection (9), the regulations may provide for goods or services to be treated as separately and successively supplied at prescribed times or intervals.
(11) This section shall not apply to subsections 183(2) and (4).
Place of supply
(1) This section shall apply for determining, for the purposes of the charge to tax, whether goods or services are supplied in Malaysia.
(2) Where the supply of any goods involves their removal from a place in Malaysia to another place in Malaysia, the goods shall be treated as supplied in Malaysia if the goods are in Malaysia and where the supply of goods involves their removal from a place outside Malaysia to another place outside Malaysia, the goods shall be treated as supplied outside Malaysia.
(3) Where the supply of any goods involves their removal from a place in Malaysia to a place outside Malaysia, the goods shall be treated as supplied in Malaysia and where the supply of goods involves their removal from a place outside Malaysia to a place in Malaysia, the goods shall be treated as supplied outside Malaysia.
(4) A supply of services shall be deemed as made—
(a) in Malaysia, if the supplier belongs in Malaysia; and
(b) in another country, if the supplier belongs in the other country.
Supply of imported services
(1) Where imported services, being a taxable supply if made in Malaysia, is supplied to a person (hereinafter referred to as the “recipient”) for the purposes of any business carried on by him, the supply shall be treated as a supply made by the recipient in the course or furtherance of his business, and the supply is a taxable supply.
(2) Where the recipient is a taxable person, the provisions of this Act shall apply to him with respect to the supply of imported services.
(3) Where the recipient is a person other than a taxable person, tax shall be charged on the supply of such imported services and he shall be liable for any tax due and payable on that supply.
(4) Notwithstanding section 11 and for the purposes of subsection (1), the time of supply of imported services shall, to the extent covered by any payment by the recipient, be treated to have been made when the supplies are paid for.
(5) Notwithstanding subsection (1), when goods are imported into Malaysia under a lease agreement from a person who does not belong in Malaysia, tax shall be charged on the goods.
Place where supplier of services belongs
(1) The supplier of services shall be treated as belonging in a country if—
(a) he has in that country a business establishment or fixed establishment and no such establishment elsewhere;
(b) he has no business establishment or fixed establishment in any country but his usual place of residence is in that country; or
(c) he has business establishments or fixed establishments both in that country and elsewhere and his establishment which is most directly concerned with the supply is in that country.
(2) For the purposes of this section, a fixed establishment in any country includes a branch or an agency through which a person carries on a business in that country.
Value of supply of goods or services
(1) Subject to the Third Schedule, the value of any supply of goods or services shall be determined in accordance with this section.
(2) Where the supply is for a consideration in money, the value of the supply shall be taken to be an amount, with the addition of the tax chargeable, equal to the consideration.
(3) Where the supply is for a consideration not in money, the value of the supply shall be taken to be an amount, with the addition of the tax chargeable, equal to the open market value of that consideration.
(4) Where the supply is for a consideration not wholly in money, the value of the supply shall be taken to be an amount, with the addition of the tax chargeable, equal to the aggregate of—
(a) to the extent that the supply is for a consideration in money, the amount of the money; and
(b) to the extent that the supply is not for a consideration in money, the open market value of that consideration.
(5) Where the supply is not for a consideration, the value of the supply shall be taken to be an amount, with the addition of the tax chargeable, equal to the open market value of that supply.
(6) Where the supply is not the only matter to which a consideration in money relates, the supply shall be deemed to be for the part of the consideration as is properly attributable to the supply.
(7) For the purposes of this section, the value of the supply shall include excise duty paid or is to be paid where applicable.
(8) The Minister may, by order published in the Gazette, amend the Third Schedule and provide for the determination of the value of a supply otherwise than in accordance with this section.
(9) Any order made under subsection (8) shall be laid before the Dewan Rakyat.
Value of goods imported
The value of goods imported into Malaysia shall be the sum of the following amounts, namely—
(a) the value of the goods for the purposes of customs duty determined in accordance with the Customs Act 1967;
(b) the amount of customs duty, if any, paid or is to be paid on the goods; and
(c) the amount of excise duty, if any, paid or is to be paid on the goods.
Zero-rated supply
(1) A zero-rated supply is—
(a) any supply of goods or services determined to be a zero-rated supply by the Minister under subsection (4); and
(b) any supply of goods if the goods are exported.
(2) Where a taxable person supplies goods or services and the supply is zero-rated, whether or not tax would be chargeable on the supply apart from this section, no tax shall be charged on the supply.
(3) The supply referred to in subsection (2) shall, in any other respect, be treated as a taxable supply and the rate at which tax is treated as charged on the supply shall be zero per cent.
(4) The Minister may, by order published in the Gazette, determine any supply of goods or services in Malaysia to be a zero-rated supply.
(5) Any order made under subsection (4) shall, at the next meeting of the Dewan Rakyat, be laid before the Dewan Rakyat and shall, at the expiration of one hundred and twenty days of being so laid or of such extended period as the Dewan Rakyat may by resolution direct, cease to have effect if and insofar as it is not confirmed by resolution passed by the Dewan Rakyat within the said one hundred and twenty days or, if such period has been extended, within such extended period.
(6) Where an order ceases to have effect in whole or in part as provided in subsection (5), any tax charged and levied in pursuance of the order or, as the case may be, of such part thereof as ceases to have effect shall, subject to subsections (7) and (8), be refundable to the persons by whom the tax was paid.
(7) Unless the Minister otherwise directs, no tax refundable under subsection (6) shall be refunded, unless the person by whom the tax was paid makes a claim in writing to the Director General within one year from the date on which the order ceases to have effect in whole or in part and the claim shall contain such particulars as the Director General may require.
(8) The Director General may reduce or disallow any tax refundable under subsection (6) to the extent that the refund would unjustly enrich the person by whom the tax was paid.
(9) Where any goods are claimed to have been or were to be exported and the supply of the goods is a zero-rated supply, not being goods zero-rated if supplied for home consumption and—
(a) the goods are found in Malaysia after the date on which they were claimed to have been or were to be exported; and
(b) the presence of the goods in Malaysia after that date has not been approved by the Director General,
the tax that would have been chargeable on the supply but for the zero-rating shall become due and payable forthwith by the supplier or by any person in whose possession the goods are found in Malaysia and the goods may be liable to seizure under this Act.
Exempt supply
(1) An exempt supply is a supply of any goods or services which shall not be subject to the imposition of tax under section 9.
(2) The Minister may, by order published in the Gazette, determine any supply of goods or services in Malaysia to be an exempt supply.
(3) Any order made under subsection (2) shall, at the next meeting of the Dewan Rakyat, be laid before the Dewan Rakyat and shall, at the expiration of one hundred and twenty days of being so laid or of such extended period as the Dewan Rakyat may by resolution direct, cease to have effect if and insofar as it is not confirmed by resolution passed by the Dewan Rakyat within the said one hundred and twenty days or, if such period has been extended, within such extended period.
(4) Where an order ceases to have effect in whole or in part as provided in subsection (3), any tax charged and levied in pursuance of the order, as the case may be, of such part thereof as ceases to have effect shall, subject to subsections (5) and (6), be refundable to the persons by whom the tax was paid.
(5) Unless the Minister otherwise directs, no tax refundable under subsection (4) shall be refunded, unless the person by whom the tax was paid makes a claim in writing to the Director General within one year from the date on which the order ceases to have effect in whole or in part and the claim shall contain such particulars as the Director General may require.
(6) The Director General may reduce or disallow any tax refundable under subsection (4) to the extent that the refund would unjustly enrich the person by whom the tax was paid.
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).
