ROYAL MALAYSIAN CUSTOMS DEPARTMENT

DIRECTOR GENERAL’S DECISION

7 SEPTEMBER 2018
________________________________________________________________

DG’S DECISION ON SST 1/2018

ITEM : 1
ISSUANCE OF TAX INVOICE ON OR AFTER 1/9/2018

Is a business registered for GST allowed to issue a tax invoice on or after 1/9/2018
if the tax invoice relates to:
(i) services performed or goods delivered or made available before
1/9/2018?
The business is not allowed to issues a tax invoice with the repeal of the GST
Act 2014 but may issue an invoice for the supply of such goods or services.
However, the business is required to account and pay for GST on the supply in
his return for the last taxable period which is not later than 120 days from
1/9/2018.

(ii) a contract signed before 1/6/2018 and the sale of goods or the provision
of the services made on or after 1/9/2018.

A business is not allowed to issue a tax invoice with the repeal of the GST Act
2014 but may issue an invoice for the such supply. However, the business is
required to account and pay GST on the supply in his return for the last taxable
period which is not later than 120 days from 1/9/2018.

(iii) a contract signed between 1/6/2018 and 31/8/2018 and the sale of
goods or the provision of the services made on or after 1/9/2018.

A business is not allowed to issue a tax invoice with the repeal of the GST Act
2014. However if the provision of the services is a taxable service or the sale
of goods is a sale of taxable goods then the business is required to issues an
invoice and charge service tax or sales tax accordingly.
This is in accordance with subsections 11(2) of the Sales Tax Act 2018 and
11(3) of the Service Tax Act 2018, which deems the sale of taxable goods and
the contract for provision of taxable services has been made on the date such
taxable goods are delivered or such taxable services are provided or
 ROYAL MALAYSIAN CUSTOMS DEPARTMENT
DIRECTOR GENERAL’S DECISION
7 SEPTEMBER 2018
________________________________________________________________

performed respectively although payment is received or invoice is issued in

the period the contract was signed.

(iv) supply of goods or services spanning over on or after 1/9/2018

A business is not allowed to issue a tax invoice with the repeal of the GST Act
2014 but may issue an invoice for such supply. The business is required to
account and pay GST on the supply for the period before 1/9/2018 in his
return for the last taxable period which is not later than 120 days from
1/9/2018.
Under subsections 108(1) of the Sales Tax Act 2018 and 93(1) of the Service
Tax Act 2018, any sale of taxable goods or provision of taxable service under
an agreement for a period or progressively over a period whether or not at
regular intervals and that period begins before 1/6/2018 and ends after
1/9/2018, the proportion of the sale of taxable goods or service which is
attributable to the part of the period after 1/9/2018 shall be chargeable to
service tax or sales tax accordingly.
Hence, if the proportion of the provision of services or the sale of goods
attributable to the part of the period on or after 1/9/2018 is a taxable service
or a sale of taxable goods then the business is required to issue an invoice and
charge service tax or sales tax for such period.
 ROYAL MALAYSIAN CUSTOMS DEPARTMENT
DIRECTOR GENERAL’S DECISION
7 SEPTEMBER 2018
________________________________________________________________

DG’S DECISION ON SST 3 /2018

ITEM: 2
DECLARATION OF IMPORTATION BY
LICENSED MANUFACTURING WAREHOUSE (LMW)

AMN Sdn Bhd is a manufacturer and he holds a licence under sec 65A of the Customs Act
1967 (licensed manufacturing warehouse - LMW). AMN Sdn Bhd intends to import raw
materials from overseas for its manufacturing activities. How does AMN Sdn Bhd declare
the importation of the raw materials?

1. Under section 57 of the Sales Tax Act 2018, sales tax shall not be levied and
payable on any taxable goods imported into Special Area which includes LMW.

2. For the purpose of declaration of the importation, AMN Sdn Bhd has to declare
Customs Form No.1 in Sistem Maklumat Kastam (SMK) by choosing the type “L”
transaction (importation by LMW). The SMK system will automatically indicate
the sales tax amount as zero.
 ROYAL MALAYSIAN CUSTOMS DEPARTMENT
DIRECTOR GENERAL’S DECISION
7 SEPTEMBER 2018
________________________________________________________________

DG’S DECISION ON SST: 2/2018

ITEM 3:
RETENTION PAYMENTS (GST TRANSITIONAL ISSUE)

Contractor A started a construction project in 1.1.2017 and due to complete in

30.6.2020. There is progress billing issued by Contractor A to the client who is a
developer. Under this project, the developer may retain or hold a certain amount
of money payable to the contractor known as retention sum. Contractor A can only
claim the retention sum from the developer after the end of the defect liability
period which is 6 months after the completion of the project (according to the
contract).

Is Contractor A allowed to issue a tax invoice and account for GST in year 2020 after
the completion of the project for the retention sum in his final GST-03 return?

(i) Invoice issued before 1/9/2018

Contractor A is only allowed to issue a tax invoice relating to the retention sum before
1/9/2018 and account and pay for the output tax in his return for the last taxable period
which is not later than 120 days from 1/9/2018 according to section 6(2) of the Goods
and Services Tax (Repeal) Act 2018. However, contractor A is not allowed to issue a tax
invoice on or after 1/9/2018. If Contractor A issues the tax invoice to the developer
before 1/9/2018 and if the input tax is allowable then developer is entitle to make such
input tax claim in his return for the last taxable period.

(ii) Invoice issued before 1/9/2018

Contractor A may issue an invoice for the retention sum in year 2020 but he is required
to account and pay for GST on the retention sum in his return for the last taxable period
which is not later than 120 days from 1/9/2018. However, the developer is not allowed
entitled to claim input tax relating to the retention sum.