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Questions Relating To GST Implementation in 1st April 2015

1. Farms are buying imported feedstuffs such as a corn, soya bean meal and many others from local suppliers. Are thesematerials subjected to GST?
•Yes, standard GST Rate 6%
•If the local supplier is a registered person, he has to charge GST at 6% to the farms.

2. Few farms are drying their chicken dung in an open area before selling to vegetable farms and others. Are dried chicken dung subjected to GST?
ANSWER: Yes, Standard GST rate of 6%

3. Some chicken farms continued with another process where they will palletize this dried chicken dung before selling to end users. Are palletized dried chicken dung subjected to GST?
•Yes, Standard GST rate of 6%
•If the chicken farms is registered person, he has to charge GST at 6% when he sells the palletized dried chicken dung.

4. Some of our suppliers are small companies where the annual turnover is less than RM500,000. These companies decided not to register with Customs department. If we were to buy raw materials/products from these unregistered companies, can we claim for GST reimbursement?
•The small companies where the annual turnover less than RM500,000 are not liable to be registered but he can register voluntarily but must remain in the system for 2 years.
•If registered person purchased from non registered person, he cannot claim an input tax because non registered person cannot charged GST and cannot issued tax invoice.

5. In the process of running or maintaining the chicken farms, we need to buy parts or materials to repair the chicken building or the chicken cages or repair or replacement of parts to ensure that is running smoothly. Some of these parts carry 6% GST. Can we claim the 6% GST as reimbursement?
ANSWER : If the farms is registered person, he can claim input tax on his acquisitions if he buys from registered suppliers provided that the acquisition are for business purposes.

6. It was explained that the affected companies with GST, will have to submit their claims for GST every month if the companies annual turnover is more than RM500,000 or every three months if the companies turnover is less than RM500,000. The reimbursement shall be done within one month period. Can Customs Department assures us that the reimbursement shall be completed within one month from the date of submission? Any delay will certainly affect the company’s cash flow and ultimately shall affect the smooth running of the farm’s operation due to insufficient fund.
ANSWER: Correction, companies with annual turnover of RM5 million need to submit every month, less than RM5 million every three months. For refund, On line registration, within 14 working days. If manual submission within 28 working days. Refund will be bank in, must make sure account number and bank correct when registering for GST.

7. To expedite processing and approval by Customs department, there must be certain guidelines to be followed. Is there a standard format to be used and whether sales invoices need to be submitted to Customs Department.
•During GST era, TAX Invoices is used as a valid document for claiming input tax. Criteria for issuing tax invoice can be referred to GST Regulation 2014 (Reg.22)
•Documents related to buying and purchasing need to be kept for 7 years in case of auditing (same as income tax) and must be Bahasa Malaysia or English.

8. GST implementation involves thousand of companies and a few thousands of product types. It will involve thousands of supporting staff. Is the submission to be done on-line or using hard copies? Will Customs Department appoint one staff to take charge of few companies? This will help certain companies to get further clarification from the officer concerned rather than being pushed from one table to the other.
•On-line, just like e-filing. No. Only for Large tax Unit, e.g. Petronas, Sime darby etc
•For Agriculture sector, 3 senior officers involved, Pn.Rokiah, Pn.Aminah and Pn.Sabariah, 4th Floor, Wisma Tulus, Presint 3, Putrajaya

9. Some farms besides producing generic eggs, they are also producing speciality eggs such as omega eggs, Lower cholesterol eggs, selenium eggs and many other speciality eggs. The only difference in producing these eggs is in the feed formulation. Are these eggs subjected to GST?
ANSWER: Eggs subjected to GST at 0%

10. Most farms are using numerous feed ingredients and supplements in preparing chicken feed. Some of these supplements are not registered with the Authorities. Can we claim for GST reimbursement?
•feed ingredients and supplement are subjected to GST at 6%. •If the farms is registered person and buy from registered companies, they are entitled to claim input tax credit.
•(Input tax means GST incurred on purchasing of the feed ingredients and supplement)

11. Currently GST is already imposed to some sectors, such as professional fees for legal matters, utilities and etc. These indirect expenses incurred in the business also contribute to the cost of production. Can producer claim for GST reimbursement for these indirect expenses?
•Current GST is Government Services Tax (6%) charged on professional fees. This tax is not claimable
•Goods and Services Tax (GST) will effective on 1 April 2015.
•During GST era, Services Tax will be eliminated.

12. Some business entity doing inter company business dealings among the related companies. These companies have different sets of books. Under this circumstances will the company that purchases goods from the related company be subjected to GST?
ANSWER: Yes subject to GST at 6%. However, if he has many companies, he can register under group registration . Supply within group member GST is disregarded.

13. Eggs that are produced by chicken farms are not 100% of marketable quality. There are some leaky eggs. Sometime we break these eggs, packed nicely and sell to certain parties. Are these shelless eggs subjected to GST?
ANSWER: Yes, GST at 0% Sources: Answer provide by JKDM Custom Authority. (28.10.2014)