SALES TAX ACT 2018

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 806 SALES TAX ACT 2018 As at 1 January 2024 This text is ONLY AN UPDATED TEXT of the Sales Tax Act 2018 by the Attorney General’s Chambers. Unless and until reprinted pursuant to the powers of the Commissioner of Law Revision under subsection 14(1) of the Revision of Laws Act 1968 [Act 1], this text is NOT AN AUTHENTIC TEXT. 2 SALES TAX ACT 2018 Date of Royal Assent … … … ... 24 August 2018 Date of publication in the Gazette … … … … 28 August 2018 Latest amendment made by Act 851 which came into operation on … … … … See section 110 of Act 851 3 LAWS OF MALAYSIA Act 806 SALES TAX ACT 2018 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title and commencement 2. Interpretation 3. Meaning of “manufacture” PART II ADMINISTRATION 4. Functions and powers of Director General and other officers 5. Persons appointed or employed to be public servants 6. Recognition of office 7. Confidentiality of information PART III IMPOSITION AND SCOPE OF SALES TAX 8. Imposition and scope of sales tax 9. Determination of sale value of taxable goods 10. Rate of sales tax 11. Sales tax due 4 Laws of Malaysia PART IIIA IMPOSITION OF SALES TAX ON LOW VALUE GOODS Section 11A. Interpretation 11B. Application 11C. Territorial and extra-territorial application 11D. Display of information on package 11E. Sales tax on importation is not applicable on low value goods PART IV REGISTRATION 12. Liability to be registered 13. Application for registration 14. Voluntary registration 15. Direction to treat persons as single taxable person 16. Registration of partnership 17. Cessation of liability to be registered 18. Notification of cessation of liability 19. Cancellation of registration 20. Exemptions from registration PART V ACCOUNTING, ASSESSMENT, RECOVERY, ETC. . 21. Invoices 22. Production of invoices by computer 23. Credit notes and debit notes 24. Duty to keep records 25. Taxable period 26. Furnishing of returns and payment of sales tax due and payable 27. Power to assess ACT 806 Sales Tax 5 Section 27A. Offsetting unpaid tax against refund or drawback 28. Recovery of sales tax, etc., as civil debt 29. Power to collect sales tax, etc., from person owing money to taxable person 30. Recovery of sales tax before payable from persons about to leave Malaysia 31. Recovery of sales tax, etc., from persons about to leave Malaysia without paying sales tax, etc. 32. Payment by instalments 33. Goods subject to customs or excise control not to be delivered until sales tax paid as demanded 34. Liability of directors, etc. PART VI EXEMPTION, REFUND, DRAWBACK, REMISSION AND DEDUCTION 35. Power of Minister to exempt and refund 35A. Refund by deduction of sales tax 36. Claim for refund of sales tax in relation to bad debt 37. Repayment of sales tax in relation to bad debt 38. Payment of sales tax, etc., short paid or erroneously refunded 39. Refund of sales tax, etc., overpaid or erroneously paid 40. Drawback 41. Remission of sales tax, etc. 41A. Application for deduction of sales tax by registered manufacturer PART VII RULING 42. Public ruling 43. Customs ruling 44. Making of customs ruling 45. Amendment, modification or revocation of customs ruling 46. Director General to declare customs rulings to be null, etc. 6 Laws of Malaysia ACT 806 Section 47. Different customs rulings on same subject matter PART VIII SPECIAL PROVISIONS RELATING TO DESIGNATED AREAS 48. Interpretation 49. Application 50. Sales tax relating to taxable goods imported into or transported to or from designated areas 51. Transportation of taxable goods from or to designated areas to or from Malaysia 52. Declaration of taxable goods transported from designated areas to Malaysia 53. Collection of sales tax in designated areas 54. Application of section 40 to taxable goods transported to designated areas PART IX SPECIAL PROVISIONS RELATING TO SPECIAL AREAS 55. Interpretation 56. Application 57. Sales tax relating to taxable goods imported into or transported to or from special areas 57A. Deficiency in quantity of taxable goods in a special area 58. Transportation of taxable goods from or to special areas to or from Malaysia 59. Declaration of taxable goods transported from special areas to Malaysia 60. Collection of sales tax in special areas 61. Application of section 40 to taxable goods transported to special area PART IXA SPECIAL SCHEMES 61A. Approved Major Exporter Scheme Sales Tax 7 PART X ENFORCEMENT Section 62. Persons bound to give information 63. Power to take samples 64. Access to places or premises 65. Access to recorded information or computerized data 66. Magistrate may issue search warrant 67. Search may be made without warrant 68. Power to stop and search conveyance 69. Seizure of goods, etc., the subject of an offence 69A. Power to seal 70. Proportional examination or testing of goods seized 71. Return or disposal of goods, etc. 72. Power of arrest 72A. Powers of enforcement, inspection and investigation 72B. Additional powers PART XI TRIALS AND PROCEEDINGS 73. Jurisdiction to try offences 74. Evidence by certificate, etc. 74A. Evidence of agent provocateur admissible 75. Production of certificate of analysis 76. Proof as to registration or licensing of conveyances in Malaysia or Singapore 77. Manner of seizure not to be enquired into on trial before court or on appeal 78. Obligation of secrecy 79. Protection of informers from discovery 80. Goods liable to seizure liable to forfeiture 81. Court to order disposal of goods seized 8 Laws of Malaysia ACT 806 Section 82. Goods seized in respect of which there is no prosecution, or the proceeds of sale thereof, are forfeited if not claimed 83. Burden of proof 84. Court order 84A. Imprisonment for non-payment of fine 85. No costs or damages arising from seizure to be recoverable unless seizure without reasonable or probable cause PART XII GENERAL 86. Evasion of sales tax 86A. Evasion of sales tax on taxable goods imported 87. Giving incorrect information relating to liability to sales tax 88. Improperly obtaining refund 88A. Improperly obtaining deduction of sales tax 89. Employee may transact business 90. Transaction of business on behalf of taxable person 91. Offences by authorized and unauthorized persons 92. Obstruction 93. Offences by company, etc. 94. General penalty 95. Compounding of offences 96. Review and appeal 97. Liquidator of company to give notice of winding-up, and set aside sales tax 98. Appointment of receiver to be notified to Director General 99. Registered manufacturer to submit audit certificate 100. Sales tax, etc., to be payable notwithstanding any proceedings, etc. Sales Tax Section 101. Service of notices, etc. 101A. Service of summons 102. Use of electronic service 103. Protection of officer of sales tax from liability 104. Rewards 105. Power of Director General to charge fees 106. Power to make regulations 106A. Power to extend period 106B. Power to modify terms and conditions PART XIII SAVINGS AND TRANSITIONAL 107. Registration on commencement date 108. Progressive or periodic agreement 109. Things done in anticipation of the enactment of this Act SCHEDULE 9 11 LAWS OF MALAYSIA Act 806 SALES TAX ACT 2018 An Act to provide for the charging, levying and collecting of sales tax, and for matters connected therewith. [1 September 2018, P.U. (B) 506/2018] ENACTED by the Parliament of Malaysia as follows: PART I PRELIMINARY Short title and commencement 1. (1) This Act may be cited as the Sales Tax Act 2018. (2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different Parts or different provisions of this Act. (3) Notwithstanding subsection (2), the Minister may, by notification in the Gazette, appoint the effective date for the charging and levying of sales tax under this Act. Interpretation 2. (1) In this Act, unless the context otherwise requires— “this Act” includes any subsidiary legislation made under this Act; 12 Laws of Malaysia ACT 806 “goods” means all kinds of movable property; “taxable goods” means goods of a class or kind not exempted from sales tax; “sales tax” means the tax payable under this Act; “prescribed” means prescribed by the Minister in the regulations made under this Act; “document” has the meaning assigned to it under section 3 of the Evidence Act 1950 [Act 56]; “licensed warehouse” means any warehouse or place licensed under section 65 of the Customs Act 1967 [Act 235]; “customs warehouse” has the meaning assigned to it under subsection 2(1) of the Customs Act 1967; “licensed manufacturing warehouse” means a licensed warehouse in respect of which an additional licence to carry on any manufacturing process has been granted under section 65A of the Customs Act 1967; “sale” includes barter, disposal of goods with a right of purchase or on terms providing that the seller retains an interest in the goods, and delivery of goods under any conditions as to future payment; “designated areas” means Labuan, Langkawi, Tioman and Pangkor; “special areas” means any free zone, licensed warehouse and licensed manufacturing warehouse, the Joint Development Area, and a petroleum supply base licensed under section 77B of the Customs Act 1967; “Joint Development Area” has the meaning assigned to it under section 2 of the Malaysia-Thailand Joint Authority Act 1990 [Act 440]; Sales Tax 13 “customs ruling” means any customs ruling made by the General under section 44; “Director General” means the Director General of Customs and Excise appointed under subsection 3(1) of the Customs Act 1967; “computer” has the meaning section 3 of the Evidence Act 1950; assigned to it under “Labuan” means the Island of Labuan and its dependent islands, namely Rusukan Besar, Rusukan Kecil, Keraman, Burong, Papan and Daat; “Langkawi” means the Island of Langkawi and all adjacent islands lying nearer to the Island of Langkawi than to the mainland; “Minister” means the Minister charged with the responsibility for finance; “taxable person” means a registered manufacturer or a manufacturer who is liable to be registered under section 12; “Pangkor” means the Pangkor Island, Mentagor Island, Giam Island, Simpan Island, Tukun Terindak Island, Pelanduk Island, Anak Pelanduk Island, Landak Island, Batu Orang Tua and Batu Jambal; “officer of sales tax” means any officer of customs as defined in subsection 2(1) of the Customs Act 1967 and includes any person appointed or employed under subsection 4(3); “proper officer of sales tax” means any senior officer of sales tax or officer of sales tax acting in the fulfilment of his duties under this Act, whether such duties are assigned to him specially or generally, or expressly or by implication; “senior officer of sales tax” means any senior officer of customs as defined in subsection 2(1) of the Customs Act 1967; 14 Laws of Malaysia ACT 806 “conveyance” includes any vessel, train, vehicle, aircraft or any other means of transport by which persons or goods can be carried; “manufacturer” means a person who engages in the manufacture of goods; “registered manufacturer” means a manufacturer registered under section 13 or 14; “regulations” means regulations made under section 106; “limited liability partnership” has the meaning assigned to it under section 2 of the Limited Liability Partnerships Act 2012 [Act 743]; “business” includes any trade, commerce or manufacture, or any concern in the nature of trade, commerce or manufacture; “petroleum” has the meaning assigned to it under subsection 2(1) of the Customs Act 1967; “surcharge” means the surcharge referred to in subsection 32(3); “effective date” means the date appointed under subsection 1(3); “taxable period” means any period as determined or provided for under section 25; “Tioman” means the Island of Tioman a