Conditions to Claim Input Tax

Conditions to Claim Input Tax

1. Claimant must be a taxable person

2. The inputs are acquired for business purpose to make taxable supply

3. Claimant must have a valid tax invoice.  For imports, Customs Form K1 and invoice on import required

4. Invoice must be issued under the name of claimant

5. Input tax not blocked

If we are only a tenant and the TNB bill is in the name of the Landlord, surely the input tax on this bill is claimable given that documents i.e. tenancy agreement evidencing same is a available and the premises used for the business also support the legitimacy of the claim.

Officially, Customs' stand is that Tax Invoices must be in your company's name for your company to claim input tax.

A lot of businesses are now busy doing COT (change of tenancy) for their electricity bills. Because of this, some of these businesses forked out quite a substantial sum in refundable deposits.

Thanks for the reply. What if the TNB bill is my personal name i.e. Tan Ah Kow and I am the sole proprietor of ABC. Do I need to change the name to ABC for the TNB bill to be eligible to claim input tax? Taking the example given Tan Ah Kow is the Landlord and the tenant is ABC a sole proprietor owned by Tan Ah Kow.

The bill has to be in the business name (e.g. Golden Arches Restaurants Sdn Bhd) or trading name (McDonald's), not the staff or owner's name.

I read somewhere on the GST guidelines that the input tax for electricity is calculated partially?

The following is copied from Customs website:
Suria Sdn Bhd, an insurance company sells life and general insurance.
In carrying out its business, the company incurs GST on electricity
amounting to RM1,000. The general insurance premium collected is
RM65,000 whilst life insurance RM35,000. The input tax (residual input
tax) that can be claimed is:
RM65,000 / (RM65000+RM35000) x 100% = 65%
GST GUIDE FOR INPUT TAX CREDIT

RM1,000 x 65% = RM650

In my case we are a retail shop, all our goods are subject to GST. Does that mean I can make 100% of input tax credit for the electricity charges incurred?

GST attributable to taxable supplies (standard-rated and zero-rated supplies) are claimable in full, while GST attributable to exempt supplies are not claimable.

GST attributable to both taxable & exempt supplies have to be apportioned.

Your retail shop business is a fully taxable supply business. GST on your purchases are claimable in full.

Is the input tax on the parking claims by a staff claimable?

In Singapore, IRAS mentioned that all running costs of passenger cars are blocked.

In Malaysia, RMCD specifically mentioned only repair, maintenance and refurbishment of passenger cars are blocked.

Insurance, RON97, parking and car wash are not blocked. We have confirmed that with Customs Putrajaya.

Hi Joseph,

I heard from other accountants and they said that it is better not to claim the input tax from the Customs but to carry forward or otherwise there will be a possibility to be checked by the Customs.Is this true?

thanks!

No such thing. It is really timing and convenience issue. Customs take 14 working days.. add back Saturdays and Sundays... actual days taken is about 20 days. By that time, it is about time to pay your next GST.

Was it true that the max claimable GST for a single entertainment bill is only RM30 (bill amount = RM 500) ? For instance, if the entertainment bill exceed RM500, the max claimable input GST for that particular bill is only RM30, am i right?

If it is true, shall we split the entertainment bill to few? thanks

Entertainment bills for staff and existing customers claimable, whatever amount.

Entertainment bills for potential customers & others not claimable, whatever amount.

Maximum claimable GST for a simplified tax invoice is RM30.

Can we claim input tax based on simplified tax invoice rule at max RM 30 if we received a full tax invoice bill to non company's name but another person name (eg. director/salesman) instead? Can anyone assist. Thanks.

Unfortunately, no. Full amount not claimable.

DG's Panel Decision 2/2014:

1. A registered person claiming input tax must hold a valid document (tax invoice) under his name which is required to be provided under section 33 GSTA (Goods and Service Tax Act 2014) (refer section 33 GSTA and reg.38(1)(a)(i) GSTR).
   
2. Invoice under employees name cannot be used for claiming input tax EXCEPT for mobile phone bill expenses used for business purpose.

The reason why the government requires tax invoice in registered person's name is to reduce the possibility of indiscriminate claiming of input tax.

Thank you very much Joseph for enlighten me and much appreciated.

Hi,

Our Company frequently purchase air ticket on line for staff for companybusiness trip within malaysia (Firefly, malindo etc). The airline company will issue us an Electronic tax invoice under the staff name i.e the passenger name who travel.
Can our company claim input tax based on this E-Tax invoice?

Not claimable unless the e-Tax invoices are in company's name.

DG's Panel Decision 2/2014:

1. A registered person claiming input tax must hold a valid document (tax invoice) under his name which is required to be provided under section 33 GSTA (Goods and Service Tax Act 2014) (refer section 33 GSTA and reg.38(1)(a)(i) GSTR).
   
2. Invoice under employees name cannot be used for claiming input tax EXCEPT for mobile phone bill expenses used for business purpose.
   

The airline website should have a field for company's name - use that field.