Panel Decision issued by Customs

Customs has recently issued a Panel Decision 2/2014. Among the items on the paper are:

1. Passenger car – Customs may not approve pooled car from exclusion from blocked input tax claim.
   
2. Invoice under employees name cannot be used for claiming input tax EXCEPT for mobile phone bill expenses used for business purpose.
   
3. Taxable period - the first taxable period to coincide with financial year of the business.
   
4. Gift rule – as long as total gifts given (at one go or in a series or succession) to a person in the same year amounted to more than RM500, GST is payable on the total gift amounts.
   
5. Voluntary Registration for pre commencement of business – documents to submit.
   

You may download it directly via GST Customs portal:
http://gst.customs.gov.my/en/rg/SiteAssets/FAI/PANEL%20DECISION%2002%202014.pdf

There was another Panel Decision 1/2014 issued in October 2014. Among the items in the paper are:

1. Claiming bad debt relief – if not claimed immediately after expiry of 6 months, must apply in writing to DG for approval to claim at such a later date.
   
2. Foreign exchange - for imported goods, irrespective of whether the importer is GST registered or not, he must use the exchange rate determined by the DG.
   
3. GST treatment on Office holders/ directors’ fees:
   Office holder/director’s fees is subject to GST when a person is carrying on a profession or vocation and he is
   (a) employed under contract for service, and
   (b) accept the position of a holder of an office in his personal capacity.
   

You may download a copy directly via GST Customs portal:
http://gst.customs.gov.my/en/rg/SiteAssets/FAI/Panel%20Decision%20compilation%20portal%20upload.pdf

Customs have issued another 2 Panel Decisions end of December:
http://gst.customs.gov.my/en/rg/SiteAssets/FAI/ISU%20DIBINCANGKAN%203.pdf
http://gst.customs.gov.my/en/rg/SiteAssets/FAI/PANEL%20DECISION%2004%202014.pdf

Panel Decision 3/2014: the 3 issues discussed are:

1) Types of newspapers falling under zero-rated supply:

a) daily or weekly, in the form of unbound sheets of printed matter consisting mainly of current news of general interest, together usually with literary articles on subjects of current, historical, biographical, etc., interest. Examples: NST, The Star, Berita Harian, Sin Chew etc.
b) excluding: journals and other periodicals mainly devoted to the publications of intelligence on subject of a specialised nature or sectional interest (e.g., legal, medical, financial, commercial, fashion or sporting). Examples: The Edge, Reader’s Digest etc.

2) Healthcare professionals providing healthcare services

a) under contract of service (under employment)- not subject to GST (exempt)
b) under contract for service (independent contractors) – subject to GST

3) Further clarifications on directors’ fees - a person under contract of service of a company, due to his position as the company’s manager, became a director of the same company or its subsidiaries – not subject to GST

Panel Decision 4/2014: among the issues discussed are:

1) Issuance of tax invoice before effective date (for trial run purpose)
- businesses are allowed to issue tax invoice with the words “GST NIL” to their customers, one (1) week before 01/04/15 on trial basis and must indicate that it is for trial only

2) Issuance of tax invoice for exempt supply by mixed suppliers
- to avoid confusion to the consumer, GST registered supplier must not issue tax invoice when making only exempt supply

3) Supply of goods under lease agreement from Designated Area (DA) to Principal Customs Area (PCA)

Customs issued another Panel Decision yesterday. You may download the file (and all previous Panel Decisions) directly from GST Customs portal: http://gst.customs.gov.my/en/rg/Pages/rg_fai.aspx

Panel Decision 1/2015: the 5 issues discussed are:

1. Last day to issue invoice under the Service Tax or Sales Tax
   - for sale of taxable goods or rendering of taxable services on the last taxable period before 01/04/15 is 28/04/15
   
   
2. Goods received free and given away free
   - No need to account for GST when a taxable person gives away free goods (goods that the taxable person received free of charge)
   
   
3. Price display
   Price displayed, advertised, published or quoted may be exclusive of GST but the word “goods or services are subject to GST 6% and the price payable is exclusive of GST“ must be stated
   - if the supply is made only to another registered person, or
   - during transitional period for only 14 days (01/04/15 to 15/04/15) to facilitate businesses to complete the process of price labelling or tagging inclusive of GST
   
   
4. Supply of SIM Card, prepaid or post-paid
   - supply of SIM card is a supply of right to use telecommunication services and it is a supply of services
   - supply of SIM card in a Designated Area (Labuan, Langkawi or Tioman) is subject to GST
   - supply of SIM card in a Designated Area (and in Malaysia as well) to a non-connected person for free of charge is not a supply and not subject to GST
   
   
5. Approval for simplified tax invoice
   - DG has given his blanket approval to any registered person who makes a supply to end consumers (not businesses) to exclude the following particulars in their tax invoices:
   - the word “Tax Invoice”
   - name and address of the recipient
   - total amount payable exclusive of tax
   - all other particulars required in a full tax invoice are still applicable (please refer Para 15 of Customs’ Guide on Tax Invoice & Records Keeping)

I wish everyone a Happy & Prosperous Chinese New Year!