FINANCE (NO. 2) ACT 1986

M DESEDTO LAWS OF MALAYSIA Act 329 FINANCE (No. 2) ACT 1986 29th December 1986 Date of Royal Assent Date of Gazette in publication . 31st December 1986 Pesnohjayn Penvemak Undan Commiss1r o aw Revisioa) Malay.a 3 LAWS OF MALAYSIA Act 329 FINANCE (No. 2) ACT 1986 ARRANGEMENT OF SECTIONS CHAPTER I PRELIMINARY Section 1 2. Short title and commencement. Amendment of Acts. CHAPTER II AMENDMENTS TO THE CUSTOMS 3. ACT 1967 Deietion of sections 146, 147, 148, 149, 150, 151, 152 and 153. 4 5. Amendment of section 154. New sections 163A, 1638, 163c, 163D, 163E. 163F and 163G. CHAPTER III AMENDMENTS TO THE SALES TAX 6. ACT 1972 Amendment of section 72. 7. Deletion of sections 81 and 82. 8. New sections 83, 84, 85, 86, 87, 88, 89 and 90. CHAPTER IV AMENDMENTS TO THE EXCISE 9. New sections 91A. 918, 9Ic and ACT 1976 91D. CHAPTER V AMENDMENTS TO THE SERVICE TAX ACT 1975 10. Amendment of section 1. 11. Amendment of section 2. LAWS OF MALAYSIA Act 329 FINANCE (No. 2) ACT 1986 An Act to amend the Customs Act 1967, the Sales Tax ct 1972, the Excise Act 1976 and the Service Tax Act 1975. BE IT ENACTED by the Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows: CHAPTER I PRELIMINARY 1. This Act may be cited as the Finance (No. 2) Act shorttite 1986 and shall come into effect on the 1st January 1987. and com mencement. 2. The Customs Act 1967, the Sales Tax Act 1972. the Amendment Excise Act 1976 and the Service Tax Act 1975 are a amended respectively in the manner specified in Act 64. Chapters II, III, IV and V respectively. Act 176. Act 151. CHAPTER II AMENDMENTS TO THE CUSTOMS ACT 1967 3. The Customs Act 1967, which in this Chapter is Deletions of referred to as "the principal Act'"', is amended by 147, sections 146 148. 149 deleting sections 146, 147, 148, 149, 150, 151, 152 and is0. 1si, 152 and 153. 153. Act 235. 4. Section 154 of the principal Act is amended by Amendment substituting for the words "and Penang" the words ot section and Langkawi" in the interpretation of "principal customs area'". 154 ICap. I1, S. 5] 6 e sections i63A. 16B Ih3c. 163d. Ih3E. 163r . ACT 3299 The principal Act is amended by inseriing after Fart AIX the following new Part XIXA and new 163A, 163B, 163c, 163», 163E, 163F and 1h3G: sec0ons and 163G PART XIXA SPECIAL PROVISIONS DEALING WITH LANGKAWI Interpre 163A. In tation this Part. otherwise requires unless context the "Langkawi" means the Langkawi Island to ncarer and all adjacent islands iying Langkawi Island than to the mainland: "principal customs area" means Malaysia exclusive of Labuan and Langkawi. anything to the Customs1638. (1) Notwithstanding duties in this Act- contrary contained to Langkawi. (a) no import duty shall be payable upon any goods imported into Langkawi, other than the following: relating and (i) petroleum petroleum products; and (ii) any goods which the Minister may from time to time declare by order published in the Gazette; (b) no export duty shall be payable upon any goods exported from Langkawi, other than any goods which Minister may from time to time declare by order published in the Gazette; the (c) import duty shall be payabie upon all dutiable goods ransported to the principal customsS ärea trom Langkawi as if such transportation to the principal customs area were importation into Malaysia; Cap. II, S. 51 FINANCE (No. 2) 1 (d) export duty shall be payable upon all dutiable goods transported from the principal customs area to Langkawi to all intents as if such transportation from the principal customs area were export from Malaysia: and (e) the Minister may by order. prescribe the meaning of the word "value in relation to goods transported from Langkawi to the principal customs (2) Subsections (2), (3). (4). (5) and (6) of section 11 shall apply to any order made by the Minister under paragraph (a) (ii) or (b) of subsection (1). (3) Nothing in this section shall render inapplicable to Langkawi any other customs duty which may be fixed by the Minister under subsection (1) of section 11. Trans portation of goods to or from Langkawi Irom or to the princi pal customs area. 163c. Where goods are transported (a) from Langkawi to the principal customs area; or (b) from the principal customs area to Langkawi. the provisions of this Act, other than sections 81,82, 83. 84. 85, 86 and 87 thereof, shall with such modifications and adaptations as may be necessary, apply as if such goods were imported into, or as the case may be, exported from, the principal customs area from or to a place outside Malaysia, and without prejudice to the above generality, the provisions of Part goods transported to or XII shall apply tofrom from to the Langkawi or principal Customs area and to persons and vehicles such goods as if Langkawi were aa transporting place outside Malaysia. ICap. I1-I1, S. 5-6] 8 ACT 3299 vessel o r Declaraton goms of any The person in charge from transported on which goods are dircraft T63D. trans customs area to the principal rted from Langkawi substantially LangkawI int theC principal be deemed while inn Langkawi. declaration prescribed form shal the the giving particularsaircraft. of or 163E. Except for the purpose of section 48. Dutiahle goods to to he nOn a goods transported in such vessel customN arca dutiable make in and any dutiable goods, other than petroleum declared petroleum products, and other goods (11) of (a) by the Minister under paragraph to deemed or 163B Suosection (1) of section under that have been declared by the Minister section, shall while in Langkawi, be deemed of to be non-dutiable goods and the provisions this Act shall be construed acordingly. section 163F. In making regulations under for the Collection of duties in Langkawi. 142, the Minister may provide collection in Langkawi of the customs duties payable in respect of goods transported or about to be transported from or to Langkawi to or from the principal customs area. Application of Part X to Part X which deals 1636. The provisions of with drawback shall apply to goods other than goods trans- those specified under paragraph (a) (i) of ported to Langkawi. subsection (1) of section 163B and goods declared by the Minister under paragraph (a) (11) of subsection (1) of section 163B or deemed to have been declared by the Minister under that section, transported from the principal customs area to Langkawi as if such goods had been exported.". CHAPTER III AMENDMENTS TO THE SALFS TAX ACT 1972 Amendment 6. Section 72 of the Sales Tax Act 1972, which in 72. this of section is Chapter referred Act 64. to as "the principal Act", is amended by inserting after the word "Labuan" the words and Langkawi" in the interpretation "principal customs area". of Cap. III, S. 7-8 FINANCE (No. 2) 9 7. The principal Act is amended by deleting sections 81 Deletion of sections 8I and 82. and 82. 8. The principal Act is amended by inserting after New sections section 82 the following new Part XVII and new *3. R4 5. 86. 87. 88. sections 83, 84, 85, 86, 87, 88, 89 and 90: 89 and 0. PART XVII SPECIAL PROVISIONS DEALING WITH LANGKAWI Inter pretation. 83. In this Part, unless the context otherwise requires Langkawi" means Langkawi Island and all adjacent islands lying nearer to Langkawi Island than to the mainland; "principal customs area" means the Federation exclusive of Labuan and Langkawi. Sales tax on goods imported intoo r exported from Langkawi trans ported to or from Langkawi. Goods manufac tured n 84. Notwithstanding anything to the contrary contained in this Act, no sales tax shall be into payable upon any taxable goods importedfrom Langkawi or transported to Langkawi customs area other than such the principal taxable goods, which the Minister may from time to time declare by order published in the Gazette. 85. For the purpose of this Act goods manufactured in Langkawi are deemed to be manufactured outside the Federation. goods Langkawi tobe goods manu factured outside the Federation. Trans portation of goods to or from Langkawi from or o the principal customs area. 86. Where goods are transportedcustoms from Langkawi to the principal (a) area; or customs area (b) from the principal Langkawi, to Cap. II, S. 8] ACT 329 10 Act shall, the provisions of this as and adaptations modifications necessary, apply with such be may were goods be, exported case may the if such as mported into, from o r to a customs area Trom, the principal F e d e r a t i o n , and without generality, the place outside the above prejudice to the to goods IX shall apply provisions of Part from or to o r as from Langkawi and to persons a r e a and the principal customs such goods as aircraft transporting and the outside Vessels transported to or if place a were Langkawi Federation. Decla rátion of goods of any vessel o r 87. The person in charge from are transported aircraft on which goods shall customs area to the principal form as transported Langkawi substantially in the declaration from make a Langkawi the principal customs area. Act 235. Taxable goods to be deemed non-taxable while in Langkawi or Customs Act 1967 prescribed under the time the force for under any other laws in goods being giving transported in of particulars the such vessel or aircraft. taxable goods, shall while in be non-taxable and Langkawi, be deemed to shall be construed the provisions of this Act 88. Any accordingly: Provided that the foregoing shall not apply in respect of any goods declared by the Minister to be taxable on importation into Langkawi. Collection of taxes 89. In making regulations under section 61 of the Act, the Minister may provide in Langkawi (a) for the collection in Langkawi of sales tax payable in respect of goods transported or about to be transported from or to Langkawi to or from the principal customs area; (b) for the limitation or restriction of vessels and aircraft which may be used to transport such goods; and [Cap. Ill-IV, S. 8-9] 11 FINANCE (No. 2) (c) for the licensing or control of persons or vessels or aircraft transporting such goods. 90. The provisions of section 29 shall apply to goods (other than any goods declared by the Section 299 Minister to be taxable on importation into to goods Langkawi) transported from the principal ransported to Langkawi had customs area to Langkawi as if such goods Appli cation of been exported or re-exported, as the case may be.". CHAPTER IV AMENDMENTS TO THE EXCISE ACT 1976 9. The Excise Act 1976 is amended by inserting after New sections section 91, the following new Part XVa and sections 91a, 91B, 91c and 91lD: new Act 176. PART XVA SPECIAL PROVISIONS DEALING WITH LANGKAWI Interpre tation. 91A. In this Part, unless the context otherwise requires "Langkawi" means the Langkawi Island and all adjacent islands lying nearer to Langkawi Island than to the mainland. Dutiable goods in Langkawi. 91B. The provisions of this Act shall not apply to goods manufactured in Langkawi, other than the following: i) petroleum and 91s, 91c 91A. and 91D. petroleum products; and (ii) any other goods which the Minister declare by order may from time to time Gazette. published in the Cap. IV.V, S. 9-11] 12 ACT 329 91c. Goods subject to excise duty, other than those referred to in section 918, when factured manufactured outside the Federation and inshallLangkawi be when moved from Langkawi to the other deemed to territories in the Federation shall be deemed be manufactured to be import into those territories and the outside the Federation. provisions of the Customs Act 1967 shall Goods manu Act 235 apply. Goods