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Fri Jul 03, 2015 9:34 am by joseph

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Fri Jul 03, 2015 9:10 am by joseph

» Input Tax (Passenger Car for business purpose)
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ICT industry

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ICT industry

Post by gracyzxx on Thu Apr 02, 2015 6:34 pm

My company issued invoice to a customer on 27/3 for a website & mobile apps (games).

The problem is the customer wants to pay monthly installments till Dec 2015.

Is that acceptable for us not to charge GST effective on 1st April?

Regards.

gracyzxx

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Re: ICT industry

Post by joseph on Fri Apr 03, 2015 9:19 am

If the apps has been delivered and invoiced before 01/04/15, then no GST is chargeable, even if payment is received after 01/04/15.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

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Re: ICT industry

Post by gracyzxx on Fri Apr 03, 2015 11:40 am

The apps is still in the making- it's the first phase of a project.
It will be completed in 5- 6 months.

The customer wants to avoid GST so, we invoice in full.
Is that acceptable?

Regards.


gracyzxx

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Re: ICT industry

Post by joseph on Fri Apr 03, 2015 11:57 am

Section 183(2) (Transitional Provisions) of the GST Act 2014: where any payment is made or invoice is issued for a supply of goods or services that will be made on or after the effective date (01/04/15), GST is applicable and has to be account for on an inclusive basis in the first taxable period.

This is an anti-avoidance provision - to prevent people from trying to avoid paying tax.

Penalty is a fine not exceeding RM30,000 or imprisonment not exceeding 2 years or both.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: ICT industry

Post by joseph on Fri Apr 03, 2015 12:09 pm

If sales tax or service tax has been collected, then no need to account for GST.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: ICT industry

Post by gracyzxx on Fri Apr 03, 2015 1:35 pm

Thank you for the reply, Joseph.

Another thing, we purchases services from overseas by credit card for business purpose.
What tax code to use and how to account reverse charge mechanism?
Pls advise.

Regards.

gracyzxx

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Re: ICT industry

Post by joseph on Fri Apr 03, 2015 5:18 pm

Example:



Last edited by joseph on Fri Apr 03, 2015 5:29 pm; edited 1 time in total

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

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Re: ICT industry

Post by joseph on Fri Apr 03, 2015 5:28 pm


_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: ICT industry

Post by joseph on Fri Apr 03, 2015 6:30 pm

Sorry, you don't account for GST Output Tax because GST has to be paid directly to Customs upon clearance of the goods, as reflected in the above accounting entries.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: ICT industry

Post by gracyzxx on Mon Apr 06, 2015 11:04 pm

Is it included services too, even where there's no customs (import, excise duty) involved?
Something like buy games apps from Apple or Dropbox/Email service..
For eg,
A purchases online services USD10 (RM35) monthly from overseas for IT business purpose. There is no physical goods/stocks or customs involved.
A accounts: DR purchases RM35
DR Input tax 6% RM2.10
CR Bank RM35
CR Input tax 6% RM2.10 (contra input tax??)

I'm confused as the customs guidelines says we have to pay GST on overseas purchases.
Do we have to report GST, self include GST in this purchases?

gracyzxx

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Re: ICT industry

Post by joseph on Tue Apr 07, 2015 9:14 am


_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: ICT industry

Post by gracium on Tue Apr 21, 2015 11:22 am

Hi Joseph,

Referring to the above post, your treatment sounds like there's no GST involved.
It's basically recording it as output tax and then input tax- contra with each other.

Grace

gracium

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Re: ICT industry

Post by joseph on Tue Apr 21, 2015 11:50 am

Yes, that's how reverse charge mechanism works.

If you are GST-registered and the imported service is attributable to  taxable supply, then net GST effect is zero.

If you are not GST-registered or the imported service is attributable to exempt supply, then you account for output tax, but cannot claim input tax.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: ICT industry

Post by gracium on Tue Apr 21, 2015 12:37 pm

Thanks, Joseph.

Wish to check with you on this:
An employee paid overseas purchases by credit card on 26/4 and by the end of month, the company pays back to the employee on 5/5.
Which date triggers the time of supply?

gracium

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Re: ICT industry

Post by joseph on Tue Apr 21, 2015 4:09 pm

Time of supply is when Customs charge you GST & customs duty on your oversea purchases.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: ICT industry

Post by gracium on Thu Jul 02, 2015 12:50 pm

joseph wrote:Yes, that's how reverse charge mechanism works.

If you are GST-registered and the imported service is attributable to  taxable supply, then net GST effect is zero.

If you are not GST-registered or the imported service is attributable to exempt supply, then you account for output tax, but cannot claim input tax.


Joseph, can I account the imported services as N-T/ OP since the net GST effect is zero? I find it a bit redundant.

Regards, Grace

gracium

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Re: ICT industry

Post by joseph on Thu Jul 02, 2015 4:45 pm

No, you have to account for output tax and claim input tax separately.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: ICT industry

Post by gracium on Thu Jul 02, 2015 7:36 pm

So, I have to create a new account for IMPORTED SERVICES and do the general journal entries.

Can I sum it all in one month because my services costs between RM10 - RM800 per month?
These purchases are made by credit card & don't involve tax invoice.
Can I use credit card statement as a proof?

gracium

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Re: ICT industry

Post by joseph on Fri Jul 03, 2015 9:10 am

What services did you provide?

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: ICT industry

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