Panduan Industri

Jabatan Kastam Diraja Malaysia

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Service Tax Facilities

E-mel

SERVICE TAX FACILITIES

A.INTRODUCTION 

Service Tax is an indirect  taxation once only  on  taxable services given by any taxable person who is licenced under the Act as in Second Schedule,Service Tax Regulations 1975.

           B.TAXABLE SERVICES

Provision of taxable services as cited in Second Schedule of Service Tax Regulations 1975. ( hyperlink with second schedule file).

C.TYPES OF FACILITIES UNDER SERVICE TAX.

a)  Tax Exemption.

Exemption of Service Tax is only given by The Minister of Finance as under section 6, service tax Act 1975. Services listed below are free from Service Tax :

 i.Public Trustee Services.

 ii.Provision or sale of food, drinks or tobacco products by Second and Third Class Public Houses  and Second Class Beer House effective from 30 April 2001. However ifthe total annual sales turnover reached thresholdRM 3K , provision of services as above is subjected to Service Tax.

iii.Provision of massage by Blind People (Disable person) registered under Malaysian Association of Blind (MAB)..

 iv.Financial  management involving selling/buying  shares, warrants, bonds securities, unit trust and trustee funds

v.Internet Services.

 vi.Complimentary Room for tourist guides.

b)Contra  System (Section 21A, Service Tax Act 1975).

 A mechanism which permits a licensee to deduct from time to time from his tax return, the amount of service tax paid but subsequently refunded to his customer by reason of:

ØDiscounts subsequently given,

ØPrice reduced or adjusted,

ØTransaction is cancelled

Øinsurance policies terminated before expiry date

Øinsurance premium is lowered due to shorter period of coverage or reduced coverage.

Use of contra system must be approvedby The Director General of Customs.

c)       Refund of service tax or penalty overpaid or erroneously paid(Sect. 21, ACP 1975).Application for refund must be made within one year of the payment of tax/penalty made.

d)       Refundfor bad debt (Sect. 21B, ACP 1975)

Any bad debt may be refunded if service tax has not been received from customer within 6 months from the day service tax has been paid provided that:

·Customer has been declared bankrupt ( under Bankruptcy Act 1967);

·Customer has been placed under liquidation;

·Winding-up order has been placed on customer by court or voluntary liquidation is applied for;

·Licensee has filed an application in court for debt owed;

·Licensee has applied for bankruptcy proceedings in court against customer for debt owed for taxable services provided;

·Application for refund of tax paid on bad debt may be made within a period of 6 years from the date tax was paid.

A Licensee who wishes to use such facilities must first get approval from The State Customs Director.

e)        Remission oftax or penalty (Sect. 22, ACP 1975).

Licensee may apply for remission of tax or penalty by writing to Treasury or through Customs Headquarters/ Director of Customs.

           f)Intragroup ( Regulations 3 and 4, Service Tax Regulations 1975 ).

Exemption is given to taxable services such as accounting, legal, engineering, architectural, surveying, consultancy and management services provided to companies under the same group, as prescribed under Group G, the Second Schedule, Service Tax Regulations 1975.(hyperlink).

           g)Tax-inclusive[ Regulation 7(a) Second Schedule, Service Tax Regulations 1975) ]

Tax-inclusive facility is where sales value is tax inclusive. This is only accorded to the hotel industry, parking services and prepaid phone services. Licensees who wish to such facilities must get prior approval by writing to The Director General of Customs.          

h        (h)Disbursement allowed are out of pocket expenses incurred which are reimbursed by customers. incurred in order to provide taxable services. Such reimbursement would include:

§Transportation charges

§Postage

§Facsimile and telephone charges

§Payment made under the provision of other laws in force.

SERVICE TAX PROCEDURES

         1.Application of License

a)Manualapplication for licence can be made using Form JKED No.1.(JKED 1) inset of two to the nearest Custom Station where the business is located.

b)Electronic application or e-Lesen can be made online through JKDMwebsite. The address is ( Alamat email ini dilindungi dari Spambot. Perlukan JavaScript untuk melihatnya ).

c)Through e-lesen customers can also apply and get other services such as:

§application of new licence

§applicationfor amendment / cancellation of licence

§centralised licence.

d)Required documents for application of licence are:

i.Company’s official application letter,

ii.Authorised letter for person to deal with Customs,

iii.Company’s registration documents issued by Commissioner of Companies;

iv.Memorandum & Articles of Association,

v.Copy of I/C or passport,

vi.Passport size photograph of applicant,

vii.Location Plan,

viii.List of branches,

ix.Confirmation letters from Professionals Bodies.

2       Tax Payment

Payment has to be made in form CJP1 within 28 days after the end of the taxable period specified and submitted to the nearest JKDM Station.

3       Facilities Application

Companies may apply to pay By contra system by direct application to respective State Customs Director