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Industry Guide:

E-Commerce

 
Please click here to download complete guide.

 

FREQUENTLY ASKED QUESTIONS 

Accounting for GST

1. When should I charge GST and account for the output tax to the Director General for supply via Internet?

The time of supply determines when you should charge and account for GST. The supply is treated as taking place at the earliest of the following events:

 (i)  supplies are removed or are made available. 

 (ii)  a tax invoice is issued for that supply. 

 (iii)  payment is received for that supply. 

Exception: If you issue a tax invoice within 21 days after the event in (1), then the time of supply is the date of this tax invoice.

If the supply is on sale or return terms, the time of supply is the earliest of the following events:

 (i)  time when the supply is made certain.

 (ii)  12 months after removal of the goods.

 (iii)  date of the tax invoice.

Exception: If you issue a tax invoice within 21 days after the event in (1) or (2), whichever is the earlier, then the time of supply is the date of this tax invoice.

You should account for GST on e-commerce supplies together with other business transactions in your GST returns.


Other GST Responsibilities 

2. What are the responsibilities of a GST-registered person? 

A GST-registered person is responsible to do the following:

 (i)  Keep your business records for 7 years. These records include:

      (a) business and accounting records;

      (b) copies of serially printed receipts, tax invoices and simplified tax invoices issued by you;

      (c) tax invoices, simplified tax invoice and receipts received by you;

      (d) import/export declarations, if any;

      (e) all credit and debit notes issued;

      (f) any other documents that may be prescribed by the Director General. 

 (ii)  Issue a tax invoice to a taxable person for provision of taxable supply.

 (iii)  Complete and submit the GST returns and pay the Director General the amount of tax no later than one month after the end of each taxable period.

 (iv)  Provide all information and reasonable assistance as requested by the Director General in the event of an inspection.

 (v)  Notify the Director General in writing when you cease making taxable supplies or when you transfer your business.

 (vi)  If you are a voluntary registered person you must remain registered for at least two years.

 (vii)  Show the price as GST inclusive when you issue a receipt. 

3. What are the requirements of a proper tax invoice?

A tax invoice verifies a GST registered person's claim for the GST incurred on purchasing a taxable supply. Details to be shown on the tax invoice include the following: 

 (i)  the words “Tax Invoice” in a prominent place

 (ii)  an identifying number;

 (iii)  the date of issue of the invoice;

 (iv)  your name, address and registration number; 

 (v)  your customer’s name (or trading name) and address;

 (vi)  the type of supply e.g. credit sale, hire-purchase, loan;

 (vii)  a description of goods or services supplied;

 (viii)  the quantity of goods or extend of services and the amount payable (excluding tax) for each description,

 (ix)  any cash discount offered;

 (x)  the total amount payable excluding tax, the rate of GST and the total tax chargeable shown separately;

 (xi)  the total amount payable, including tax; and

 (xii)  if applicable, the breakdown of exempt, zero-rated or other supply, stating separately the gross amount payable in respect of each.


If the invoice uses a foreign currency, items (x) and (xi) should be converted into Ringgit Malaysia using the selling exchange rate prevailing in Malaysia at the time of supply. 

4. Do I have to issue a hardcopy of the tax invoice to my customer if sale is made via the Internet?

Tax invoice can be issued either a physically (hardcopy) or by electronic means. However, the use of electronic invoices has to be agreed with the recipient and the authenticity of origin and the integrity of data must be guaranteed. In addition, when tax invoice is issued electronically, it must conform to the general content requirements for tax invoice. Both the recipient and supplier of the taxable supply need to retain copies of the tax invoice. When the original tax invoice is in an electronic format, it must be kept in an electronically readable format even if it has been transferred to another medium (e.g., compact disc, microfilm etc.) for storage purposes. It is acceptable for businesses to print out and store tax invoices if they wish to do so.

Example 1

Tax invoices were generated electronically by application software. For safe keeping the data (of the invoices) were then stored in Compact Disc. The data (tax invoices) in the CD must be readable for retrieval purposes

5. Do I have to retain hardcopies of tax invoices or business records?
 

A GST registered person is obliged to produce hardcopies of tax invoices and business records if requested by the Director General. The invoices and business records are required to be in an appropriate form and should comply with the criteria set out in the GST regulation. As a general rule the records must contain sufficient information to allow determination of the amount of tax to be paid or collected, or the amount to be refunded, rebated or deducted from net tax and any other acts that may be relevant for GST.

The records must be stored either in the Malay or English language. If stored electronically the data must be capable to be converted into a readable format and shall be readily accessible and convertible into writing.

Tax invoice can be issued either a physically (hardcopy) or by electronic means. However, the use of electronic invoices has to be agreed with the recipient and the authenticity of origin and the integrity of data must be guaranteed. In addition, when tax invoice is issued electronically, it must conform to the general content requirements for tax invoice. 

6. What are the responsibilities in terms of displaying prices?

All prices displayed, advertised, published over the internet for any supply of goods or services should be inclusive of GST. This also applies to prices displayed on websites which sell to both non-residents and residents. A website can display a GST-exclusive price for recipients outside Malaysia, but will also need to display the GST-inclusive price for recipients within Malaysia.

7. What documents are required as evidence for zero-rating of goods sold over the Internet?

The following documents should be maintained as evidence, if you supplied goods over Internet and then exported through your forwarder: 

 (a) bill of lading - for export via sea; or air waybill - for export via air;

 (b) your invoice (not a pro-forma invoice) to the overseas customer;

 (c) purchase order from your overseas customer;

 (d) packing list or delivery note addressed to your overseas customer;

 (e) insurance documents; and

 (f) evidence of payment received from your overseas customer.

8. What documents are required as proof if I export the goods via a postal or courier company?  

If the exportation of goods is done by postal services or courier company, you need to maintain these documents: 

 (a) customs declaration;

 (b) parcel posting receipt/courier consignment note; and

 (c) invoice to your overseas customer. 

Note: The list in A7 and A8 is neither intended to be exhaustive nor meant to be applicable to all types of businesses.



 
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Johor
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ICT Automation (M) Sdn Bhd
www.ict.com.my
 
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