Businesses making taxable supplies have to be registered under GST if their annual sales turnover has
exceeded the prescribed threshold. Only a registered person can charge and collect GST on the taxable
supplies of goods and services made by him. GST is charged on the value or selling price of the products.
The amount of GST incurred on input (input tax) can be deducted from the amount of GST charged
(output tax) by the registered person.
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.
GST requires businesses who have exceeded the prescribed threshold to register and to keep records
of input and output tax. Businesses report their liability in a specific period called taxable period.
Explore the following sections to understand your responsibilities and obligations as a registrant
The first step to being GST-ready is to register for a GST identification number.
You need to check whether you are required to register or whether you want to register voluntarily.
Persons having businesses with annual sales turnover exceeding RM500,000 are liable to be registered
under GST. 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 supplies in Malaysia.
The annual sales turnover can be determined based on either:
You also need to decide on the type of registration best for your business:
Any person making a taxable supply and having an annual sales turnover RM500,000 and below is
not required to be registered. However, you may voluntarily apply for registration.
Voluntary registration is allowable but must remain in the system for at least 2 years.
Once registered, you are required to charge and collect GST on the taxable supplies and at the
same time are entitled to claim input tax credit and eligible to enjoy all facilities provided
under the law.
Group registration is a facility that allows several companies to group and centralize their
administration for the 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
Requirements for group registration :
A taxable person who is carrying on its 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. This is a facility for any taxable person with a number of self
accounting units to register each unit separately for GST.
Each division/branch will be given a separate GST identification number and make its own returns.
However, the taxable person remains accountable for all GST liability of all divisions/branches.
When you charge GST, you need to issue a tax invoice showing the amount of GST and the price of the
supplies separately. The tax invoice has to be issued within 21 days after the time of the supply.
Particulars to be shown in the tax invoice:
The Director General of Customs may upon request allow the tax invoice to be varied from the
above whether in term of particulars in the tax invoice or issuance of other type of tax invoice
e.g. simplified tax invoice.
An invoice that does not contain all the particulars as required in the standard tax invoice
and subject to the approval of the Director General. Simplified tax invoice can be used by the
GST registrant to claim ITC provided the value of the invoice (inclusive GST) does not exceed RM500.
DG may allow the simplified tax invoice to be issued containing:
Basically, all taxable persons will be required to account for GST based on accrual (invoice)
basis of accounting i.e. all output tax and input tax are to be accounted and claimed based on
the time when the invoice was issued or received.
However, certain categories of taxable persons may be allowed to use the payment (cash)
basis of accounting. This facility may be given to businesses who carry out their activities
solely on a cash payment basis.
All business and accounting records relating to GST transactions are to be kept in Bahasa Melayu
or English for a period of seven (7) years.
GST 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. The standard taxable period is on quarterly basis.
However, a registrant may apply to be placed in other taxable period (monthly or 6 monthly)
subject to specific conditions as follows:
Businesses have to charge and collect GST on all taxable goods and services supplied to the consumers.
Only businesses registered under GST can charge and collect GST.
Businesses are allowed to claim whatever amount of GST paid on the business inputs by offsetting
against the output tax.
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.
If your output tax exceeds the input tax, the difference shall be remitted to the Government
together with the GST returns not later than the last day of the following month after the end
of taxable period.
Online payments through:
Penalties may be imposed if the following offences are committed:
Any person who is aggrieved by the decision of the officer of GST may apply for a review and
revision to the DG 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.
Standard-rated supplies are goods and services that are charged GST with a standard rate. GST is collected by the businesses and paid to the government. They can recover credit back on their inputs. If their input tax is bigger than their output tax, they can recover back the difference.
How GST is charged at each level of supply chain standard rated supply :
How GST is charged and collected at the wholesale level for standard rated supply :
Computation of GST at all levels of the supply chain for standard rated supply :
These are taxable supplies that are subject to a zero rate. Businesses are eligible to claim input tax credit in acquiring these supplies, and charge GST at zero rate to the consumer.
How GST works on a zero rated supply :
How GST works on a zero rated supply at the wholesale level :
Computation of GST on zero rated supply :
These are non-taxable supplies that are not subject to GST. Businesses are not eligible to claim input tax credit in acquiring these supplies, and cannot charge output tax to the consumer.
How GST works on an exempt supply :
How GST works on an exempt supply by a service provider :
Computation of GST on exempt supply :
Specific supplies such as water supply by the State Government and advertising services by RTM will be subjected to GST due to the commercial nature of these services.
Supplies made by Statutory Bodies and Local Authorities will be subject to GST except supply in respect of its regulatory and enforcement functions such as issuing licenses and permits and etc.