Transitioning from GST to SST

In May 2018, Ministry of Finance Malaysia announced that Goods and Services Tax (GST) would be abolished and replaced by a reintroduced Sales and Services Tax (SST). Although no firm date has been set, Ministry of Finance has stated that SST will be implemented in September 2018. The first step of the transition began on 1 June 2018, when GST was adjusted from 6% to a 0% rate across Malaysia. In fact, during the transition period, GST still applies across Malaysia under existing regulations - but at a rate of 0%. Obviously, Business should take steps, during this transitional period to prepare for the implementation of SST.

This program gives the participants the necessary content to understand the following:

1. Latest Updates on GST Abolishment Timeline
2. Latest Updates on GST Accounting From Now Until Final Abolishment of GST
3. Latest 0% GST Accounting Treatment
4. Transitional Issue Due to GST Abolishment
5. Cash Flow Issues on GST Abolishment
6. GST Abolishment Effects on Costing & Pricing
7. Good or Services Already Exempted From GST
8. Important: Documentation to Support Your Claims after GST is Repealed
9. Liabilities to be Settled Before GST Abolishment
10. Possible Transition to SST: Case Study
11. Question & Answer on Common Questions

GST Abolishment Timeline

• Discussion on latest government announcements
• Implications of these announcements

GST Accounting before Final Abolishment

• Do you still need to issue GST Tax Invoice?
• Do you still need to File GST?
• Invoices before 1 June 2018
• Invoices issued before 1 June 2018 but goods or services delivered after 1 June 2018
• Invoices after 1 June 2018
• Quick recap on GST Accounting, GST Tax Codes & GST Submission

0% GST Accounting Treatment

• GST Code to use at 0% GST (Gazette Order)
• Effects on Deposit Paid
• Effect on Goods Delivery
• Effects on Tax Invoice & Payment
• Effects on Blocked Input Tax
• Effects on KI Form Declared
• Effects on Goods Cleared after 1 June 2018
• Effects on Margin Scheme
• Remission of penalty
• Non or late submission
• Other issues

GST to SST Transitional Issues

• Input tax paid under GST to customs but not recovered when new tax regime is introduced.
• Long-term contract with GST in contract price.
• Inventory held on date new tax regime introduced.
• Output Tax collected on goods and services but not yet submitted to Customs
• Output Tax collected on long term contracts not yet performed and not paid to Customs.
• Documentation issues of the transformation.

Transitional Issues on Cash Flow

• What happens to input tax paid which is recoverable?
• Input tax wrongly collected by the supplier
• Output tax collected from customers
• Output tax paid on behalf of customers not recovered from customers.
• Bad debt relief

Transitional Effects on Costing & Pricing

• The impact of zero rating and input tax paid
• The impact on Mark up and output tax on pricing
• The price control & anti-profiteering regulation 2016
• % Mark-up or $ Mark-up

Good or Services Already Exempted From GST

• Input taxes paid and their impact
• Is there a need for reclassification?
• Mixed suppliers and what is their position

Important: Documentation to Support Your Claims after GST is Repealed

• Full tax invoices and simplified tax invoices
• Goods received notes.
• K1 / K2 / K9 Forms
• Credit Notes from suppliers
• Debit notes from suppliers
• Records to be maintained

Liabilities to be Settled Before GST Abolishment

• Output tax collected
• GST Penalties and settlement
• Bill of Demand from customs
• Compounds

Possible Transition to SST: Case Study

• Who would be liable? What is single stage tax?
• The difference between GST and SST
• Impact of the SST on cost
• Revisit of the earlier SST act
• Case study of how SST would work
• SST and the accounting system
• Transition from GST 6% to GST 0% TO SST

Question & Answer on Common Questions

• Taxable supply reach RM500,000 before 1 June 2018 - Do I still need to register?
• Can I still claim input tax for invoices received before 1 June 2018 but goods or services rendered after?
• Tax invoice issued before 1 June 2018 but goods returned & need to issue CM - negative output tax?
• Products sold at price inclusive of GST, once 0% GST can you still sell them at same price? - tax fraction?
• How about price tags, do we need to change them? - Case study on Anti Profiteering Act
• GST tax code to use for 0% standard rated supply?
• Do you still need to report fixed assets acquired in GST-03 Field 16?
• Construction Sector Case Study: Services completed before and after 1 June 2018 to apportion?
• Importers Sector Case Study: Can you get refund from your freight forwarder?
• What happens to previous month purchases I have yet to claim input tax, can I claim after 1 June 2018?

Other Issues to Consider

• Updating Your Accounting Software
• Audit challenges after GST is Abolished

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E-mail : training@ted.com.my

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