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Industry Guide:

Duty Free Shop

 
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FREQUENTLY ASKED QUESTIONS

Goods Supplied to or Consumed in a Duty Free Shop

1. Are goods consumed in DFS such as water and electricity subject to GST?

Yes, goods consumed in DFS like utilities are subject to GST at standard rate.


Services Supplied to or Consumed in a Duty Free Shop

2. What is the treatment of GST on freight for transporting goods to my DFS? 

Freight for the transportation of goods to DFS is subject to GST.

3. Must I also pay GST on insurance for transportation of goods to my DFS?

Yes, insurance on transportation is also subject to GST. 

4. Are services consumed in DFS such as security services subject to GST?

Yes, services consumed in DFS like security services are subject to GST.


The treatment of GST on goods supplied in DFS 

5. Are goods sold in DFS located at seaport or airport subject to GST? 

DFS located at airports and seaports are allowed to sell goods to ship crew and passengers. Foreign passengers or bona fide tourists and ship crew are allowed to purchase goods at such DFS free of duty and GST.

6. Are Malaysians normally residing in Malaysia but returning from overseas eligible to purchase goods without duty and GST from DFS?

Only Malaysians returning from overseas after an absence from Malaysia not less than 72 hours are allowed to purchase duty free goods at DFS without duty and GST for certain quantities. The excess is subject to GST. Such eligible Malaysians must provide proof of their overseas stay. 

7. I operate a downtown “Tourist Refund Scheme (TRS)” outlet. What is the GST treatment on goods supplied by me in the outlet?

Goods sold at TRS outlets are subject to GST at standard rate. Any foreign tourist leaving Malaysia can claim GST paid on goods purchased at TRS outlet provided they fulfilled the conditions imposed under the TRS. For further details, please refer to Guide on TRS. 

8. What is the GST treatment on goods sold in DFS located at borders, like Bukit Kayu Hitam, Kedah?

All goods sold at border DFS are free of GST. However, if such goods are brought into Malaysia, GST would be imposed at the checkpoint by the customs

9. What is the GST treatment on goods purchased by ineligible persons at airport and seaport DFS?

Ineligible persons who purchased goods would have to pay GST on such purchases at the customs checkpoint.


Responsibilities and Liabilities of a DFS Operator

10. As a DFS operator, do I need to register for GST?

As a DFS operator you must register as a GST registered person if your taxable turnover has exceeded the prescribed threshold. Sale of duty free goods is regarded as taxable supply.

11. How do I register as a GST registered person?

You are required to fill in an application form to be submitted together with supporting documents such as your DFS license, your form 24, and 49 of the company Act. Copies of your I/C or passport, location plan. For further details please refer to Guide on Registration.

12. If I operate several DFS in Malaysia, can I register all the DFS under one single GST registration?

Yes, you can register as one single entity. However, you may also choose to register your DFS separately under branch registration. Refer to Guide on Registration.

13.What happens if goods are damaged or lost in the DFS?

Proper documentation, such as survey report describing the cause of damage and quantity involved must be furnished to the DG immediately. However, GST is chargeable on the damaged goods unless remission of tax is obtained from the DG.






 
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L & Co Plt.

Johor
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Tel +607-859 0410
Fax +607-863 1003
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S1-3, 1-21-01, Suntech @ Penang Cybercity (1575), Lintang Mayang Pasir 3, 11950 Bayan Baru, Penang, Malaysia
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ICT Automation (M) Sdn Bhd
www.ict.com.my
 
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