Sales a service tax or SST in Malaysia took a new leap in the corporate world on 1st September 2018. This tax scheme replaced its predecessor Goods and Services Tax (GST) system which was first introduced back in 2015. Just like GST the SST also settled at 6% rate for all eligible manufacturing and consumer tax payers in Malaysia.
Introduction of this tax in the nation took a new turn in the Malaysian corporate culture. Paying the SST is mandatory for enlisted businesses and individuals in this country. Therefore, to be a valid tax payer proper SST registration is compulsory. However, the transition process of an already GST payer to SST system is mostly automated and much more convenient.
In this article we will mostly deal with the sales and service tax or SST registration in Malaysia. The content also comes with several useful factors of SST which you must be aware about. You will also find a list of services and which falls under the checklist of SST system in Malaysia. This will help you out to find whether your business falls in this list or not.
When Facts about sales and service tax Malaysia
SST refers as the Sales and Service Tax (SST) in Malaysia. This tax of an individual tax payer is eventually added to the national treasury of Malaysia. The ultimate goal of charging such tax is to assist government to create further developments and opportunities to the society using that tax revenue.
Following are the facts you should know about Sales and service tax Malaysia:
- Sales and service tax is operated under the Sales Tax Act 2018 and the Service Tax Act 2018.
- Both manufacturers and service providers are liable to sign up for this service tax under the 2018 Act in Malaysia.
- 6% rate has been enacted for Sales and service tax (SST) by the Ministry of Finance on September 1st, 2018.
- The SST service is monitored by the Royal Malaysian Customs Department (RMCD).
- SST had a different identity at its early introduction to the Malaysian public, and that is GST or Goods and Service Tax. It was first introduced in 2015. Later on the name GST was replaced and re-introduced with several refinements.
- SST might be a single term but Sales tax and service tax is treated individually. Sales Tax was introduced under the federal law of Malaysia and this act on manufacturers for producing and selling wide range of consumption goods. On the other hand, service tax was has been imposed on consumers who enjoy services which falls under service taxation law.
The SST is applicable for service which mostly include restaurant, bar, canteen, caterers or similar business operators. It has to be noted that, food distribution services and canteens operated under education institutes or religion organizations are excluded from this taxation list.
In order to be registered for the Sales and service tax in Malaysia, a service need to issue a tax submission supplementary card which will cost about RM25. Each tax payments are recorded every year in this particular card. It should be noted that SST rate is fixed at 6% for a list of services.
Enlisted Services under SST regulation in Malaysia
Here is the list of regular services in Malaysia that falls under Sales and Service Tax curriculum:
- Gaming clubs such as casino, lottery, gaming machines, sweepstakes etc.
- Hotels, motels, resorts, Inn, spa etc.
- Restaurant, pubs, caterings, food carts, take-away, retail etc.
- Motor vehicle repairing and servicing
- Telecommunication companies
- Golf club, Night club, rotary club etc.
- Insurance agency
- Hire and ride sharing business
- Employment agency
- Domestic flight service
- Management corporation
- Forwarding agents
- Courier service
- Surveying company
- Credit card service
- IT services
- Architectural agency
- Electricity service
- Security agency
- Advertising agency
- Legal firms
It must be noted that there are some exceptions. Some services are exempted from SST registration process. For instance, Jewelers, optician, tailoring and installation of goods into corporate buildings are among those services which are free from SST regulations.
When there are some exceptional services which are free from SST, there are also some distinct areas in Malaysia as well which are free from Sales and service tax system. Places under Malaysian territory such as Langkawi Island, Labuan Island and Tioman Island are the three exceptional areas under Malaysian government which have been relieved from the hassles of Sales and service tax registration Malaysia.
Sales and Service tax (SST) registration steps in Malaysia
The SST registration process is much convenient after the authority have introduced their online Sales and service registration process. The process thereafter turn out to be much hassle less and time saving. Before proceeding for the SST submission, it must be noted that both sales tax and service tax is separated and so are the submission process of these two. Below are the simple steps that illustrate the SST registration in Malaysia:
- Once eligible to pay the SST, the applicant intended to register for sales and service tax need to Google his/her way to the government website called MySST portal.
- The direct link for this particular portal is: www.mysst.customs.gov.my
- Here once entered into the portal, the applicant has to fill up a recommended registration form with genuine credentials as per information demand.
- You will be provided with a booth at the SST sector of the RMCD offices in Malaysia.
- Once form is submitted online, an approval letter will be generated immediately to the system for you. This confirms successful approval of the registration process.
- Following approval letter, the applicant will also get a sales tax registration number.
- The system will also provide information of effective date of registration and other data along with rules and responsibilities for the applicant’s acknowledgements.
- The approval confirmation latter will eventually sent automatically to the applicant’s registered email address for future reference.
- With this process the whole electronic SST registration is done.
FAQ on SST registration process
What is sales and service tax in Malaysia?
It is a tax system introduced by the government of Malaysia on 1st September 2018. Here there are two separate elements; Sales and services. Sales tax has been imposed on mainly manufacturers. Who produce and sell wide varieties of goods. The enlisted manufacturers when eligible need to pay the sales tax. On the other hand, in case of service, consumers who enjoy certain services listed under SST regulations need to pay a recommended amount of service tax for that service.
Who administers and governs the SST service in Malaysia?
SST is administered by the Royal Malaysian Customs Department (RMCD) and kept at 6% rate for all businesses and consumers.
What is the enacted rate of SST?
SST is administered by the Royal Malaysian Customs Department (RMCD) introduced the SST right after abolishing the GST system, which was first implemented on 2015 at 6% rate. For SST same 6% rate has been fixed as sales and service consumption tax.
What are the steps of SST registration?
The steps of SST registration process are as follows:
- Visit government portal: www.mysst.customs.gov.my
- Get recommended form for SST registration from the portal
- Fill up the form with appropriate information
- Once filled, submit the form online through the system itself
- Get approval confirmation in the system
- Get sales tax registration number in the system
- Get other information necessary from the system once your application is approved.
- Approval latter will be sent to your registered email.
- The registration process is complete.
How is sales tax and service tax different in Malaysia?
Sales tax is issued and collected by the State government as it is levied on sales of GOODS whereas service tax go to the central government and it relies on SERVICES offered.