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Industry Guide:

Retailing

 
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FREQUENTLY ASKED QUESTIONS 

Accounting 

1. What is the GST requirement involving the rounding of a fraction of a cent? 

If the GST payable amounts to a fraction of a cent, the following treatment will apply:

(i) for fraction of a cent that is 0.005 cent and above, it will be rounded up. For example, RM2.245 will be rounded up to RM2.25;

(ii) for fraction of a cent below 0.005 cent, it will be rounded down. For example, RM2.243 will be rounded down to RM2.24.  

2. How do I account GST on deposit?

Generally, the retailers do not have to account GST on the deposit if it is not part of payment. If the deposit becomes part of payment then the deposit is subject to GST depending on the taxability of the supply.

3. What is the GST treatment on the bargaining price?   

Price bargaining is a normal practice in the retail business. The amount of GST charged to the customer will be the prevailing tax fraction of the final price paid by the customer. The amount of GST is included in the consideration and is calculated as follows:

Example :  

Display price: = RM106.00

Price after bargain = RM 95.40

GST to be accounted: = tax fraction of the consideration 

                                        = Consideration X (%GST / 100%+ %GST)
                                       
                                        = RM 95.40 X (6% / 100% + 6%)
                                         
                                        = RM 95.40 X (6% / 106%)

                                        = RM 5.40


Other Transactions 

4. When a coach driver brings passenger to my supermarket. I will give him a RM10 voucher to spend in my supermarket. Do I have to charge GST when issuing the voucher? 

The retailer does not have to account GST when he issues the voucher, but he has to account GST when the driver redeems the voucher for taxable goods or services.

5. Is GST chargeable on the sales of second hand goods such as used furniture, shoes and electrical household items?

The sale of second hand goods is treated as a normal supply under the GST. If the retailer is registered for GST, the retailer must charge GST on the used furniture, shoes and electrical household items irrespective of whether the goods are purchased from a non-registered person or not.

6. Is GST chargeable on the goods sold to foreign tourists?

As a GST-registered retailer, you have to charge GST on goods sold to all customers including foreign tourists. GST paid on the goods by a foreign tourist can be refunded upon leaving Malaysia under the Tourist Refund Scheme provided that he fulfils the prescribed conditions.

7. Can I claim ITC on motor vehicle for the transport of business goods?   

If the motor vehicle used is a passenger car, the retailer cannot claim input tax incurred on the acquisition of the car. However, when he subsequently sells the car, he is not required to charge GST on the sales of the car. If the motor vehicle is a commercial motor vehicle such as a van for the transportation of goods, then the retailer is entitled to claim input tax incurred. However, when he subsequently sells the commercial motor vehicle, he is required to charge GST on the sales of the commercial motor vehicle.

8. I am a GST registered person. Do I have to account GST on goods used for personal use (private use)?

Yes. Goods used for private use is subject to GST. Therefore, GST has to be charged on the goods based on open market value.

9. When should I account GST for coin operated machines in my premise?  

You have to account GST in the relevant taxable period when coins are removed from the machines. 
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Tel +607-859 0410
Fax +607-863 1003
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ICT Automation (M) Sdn Bhd
www.ict.com.my
 
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