Advantages Of Gst In Malaysia

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A Goods and Services Tax or GST is a form of consumption tax. It is a tax on spending, as opposed to income tax, which is a tax on salaries, and corporate tax which is a tax on profits.
GST came into effect from April 1, 2015 in Malaysia at a standard rate of 6%. But that does not mean everything would be taxed at the standard rate. Some essential goods and services have been made either zero-rated or entirely exempt.

GST is also sometimes called a Value-Added Tax because it taxes only the value added of good or service at every stage of the supply chain. The value added is often taken to be the difference between the sale price and the cost of production.


GST is divided into four different parts which are standard rated, zero
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It is imposed at the standard percentage which is 6% except there is a provision that states it can be handled in a different manner. Usually, a very small businesses and certain particular goods and services are exempted.
Zero rated is a payable supply. Value added tax (VAT) does not change when you sell due to 0% rate. GST incurred by the business can be recovered. GST incurred by the corporate can be regained. Customs will issue a refund to those that produce entirely zero-rated supplies. For those that make wholly zero-rated supplies. “For example certain agricultural products, foodstuff, water to domestic consumers, electricity supply (with limits) to domestic users, export of goods and international services”. (
There will be no GST imposed on the exempt category. However, it does not mean that you don’t have to pay for it. GST will be paid as an added cost for private institutions such as healthcare, education and some financial services. This is because an entirely exempt goods is made and thus cannot be registered for
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Consumers pay the standard rate of 6% on top of the price of goods and services they purchase. However, a long list of goods and services considered essential have either been made zero-rated or exempt. The number of goods and services treated as much are quite numerous so GST in Malaysia is said to target only discretionary spending.

Because GST replaces the Sales Tax, the effect of GST implementation on prices of everyday consumer goods can be difficult to predict. In general, goods that were previously not charged Sales Tax would increase in price once GST came into effect from April 1, 2015. Goods that were previously charged a higher rate of Sales Tax might not see significant price charges, and in some cases might even decrease in price.

Unlike income tax, individual do not need to bother with the administrative aspects of GST as the tax is collected on their behalf by businesses. They do not have to file tax returns.

Impact on business

GST also effects the businesses operating in Malaysia. As it was reported on 1st April,2015 that 306000 businesses had registered and had begun adapting their operations to fit the new system. In doing so, corporations had been required to purchase and deploy GST enabled software program or adapt their contemporary system to allow receipts and invoices to highlight the

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