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FAQs of Malaysia Good and Service Tax (GST)

Business Category FAQs.

What benefits do businesses get from GST?
Our studies have shown that there will be a reduction in the business costs due to:
(i)GST paid on inputs is claimable
(ii)Exports are zero rated(iii)There is no matching of input tax and output tax
(iv)the existence of special schemes to alleviate cash flow.

Those with annual sales of taxable supply exceeding the prescribed threshold of RM500,000 are mandatorily required to be registered. However, those below the prescribed threshold may appy to be voluntarily registered.

Yes, online registration is encouraged.

Application for GST registration may be made in the following manner:
(i)apply electronically through
(ii)at the registration kiosk made available at any Customs Office
(iii)manual submission by post.

How does the Government address the false input tax credit claim?
The following measures are taken to address false input tax credit claims:

  • having a comprehensive risk management system
  • the use of tax performance ratio to identify delinquent businesses
  • the use of computerized auditing technique and forensic tools
  • desk, compliance and refund audit to monitor false input tax claim
  • information from the general public and business
  • exchange of information with other government agencies

What assistance will be provided to the SMEs for them to be GST ready?
Government would assist SMEs by reducing the compliance cost involved. The Government would provide free training and education and also assist SMEs in acquiring the basic software needed for GST implementation.

How will the Government ensure that the businesses will remit the right amount collected to the Government?

GST registered persons are required to submit periodical returns and remit tax to the Government. GST Audit Team will conduct audit on the registrant periodically and when the need arises. Beside this, the GST risk management system will send out alert on high risk registrants, input tax claims or suspicious payments.

Large taxpayers contribute substantial revenue. If there is any element of fraud in the payment of tax and input tax credit claims, it will result in a major impact to the country’s revenue. How will the Government overcome the evasion of tax by these taxpayers?

The approach that will be taken by the Government are as follows:
(i)having a comprehensive risk management system
(ii)the use of tax performance ratio to identify businesses who intend to evade payment of GST
(iii)having a list of major exporters to overcome input tax credit claims relating to false exports
(iv)the use of computerised auditing technique and forensic tools
(v)to conduct joint audit with the Inland Revenue Board
(vi)to create a large taxpayer unit.

Will GST affect small-businesses like night market selling clothes or food items? Will they also need to impose and pay GST?
Implementation of GST may only affect the small-businesses like the night market operators if their annual turnover exceeds the prescribed threshold which require them to be registered under GST.

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