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Industry Guide:

Tourist Refund Scheme

 
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FREQUENTLY ASKED QUESTIONS 

General on TRS 

1. As a foreign tourist in Malaysia, which method/mode can I use to claim my refund under TRS? 

You can claim your refund by:- 

 (a) Payment through a credit card;

 (b) Payment in cash (for amount not exceeding RM300.00)

 (c) Payment through a bank cheque as a contingency approach if neither of the above refund options is feasible.

2. As a foreign tourist in Malaysia, can I get a refund on services such as accommodation, car hire and entertainment consumed in Malaysia?

TRS only applies to goods that are taken out with you when you leave Malaysia. The TRS does not apply to services (car hire, accommodation, tours etc.) or goods consumed or partly consumed in Malaysia such as drinks, chocolates or perfume.

3. Why does the Sales Tax and Service Tax (SST) need to be replaced with GST?  

GST is more comprehensive, effective, transparent, and business friendly tax system. GST can overcome the various weaknesses inherent in the present consumption tax system. The inherent weaknesses under the present tax system are cascading tax, double tax and pyramiding tax, tax erosion and leakages through transfer pricing and other means. Besides that GST is expected is to increase tax compliance and is easier to administer in view of its self-policing method. In addition, business are required only to submit simplified tax returns based on prescribed formats. All records and documents relating to the relevant transaction are required to be kept in the business premises for audit by the GST auditor.

4. What is a tax invoice that is issued under the Tourist Refund Scheme?  

A tax invoice contains information such as invoice number, the amount of GST paid and provides all the evidence needed by Royal Malaysia Customs Department (RMCD) to verify the sale, identify the goods and support the payment of GST refund. Merchants who have been designated by RMCD as an Approved Outlet will provide normal tax receipts as their tax invoices. Tourist must ask the Approved Outlet operator for a tax invoice when making a purchase. A tax invoice must contain the following information:

 (a) the invoice number;

 (b) the GST inclusive price of the eligible goods;

 (c) the word tax invoice stated prominently;

 (d) the date of issue of the tax invoice;

 (e) the name of the Approved Outlet operator; 

 (f) description of each and every eligible goods purchased; and

 (g) a statement similar to the total price, inclusive of GST.

5. Is there a maximum amount of GST that tourists can claim under TRS?

No. You can claim any amount of GST refund under TRS.

6. What will I need to present at the GST Refund Verification Counter?

At the GST Refund Verification Counter, you will need to present the following documents:-

 (a) the original tax invoice or receipt (GST inclusive) from the Approved Outlet;

 (b) the original refund form issued by Approved Outlet;

 (c) your original valid international passport;

 (d) your international boarding pass, confirmed air ticket or other proof of travel; and

 (e) the eligible goods, if requested by RMCD (to prove you are taking them out of Malaysia and to confirm those are the goods described in the original tax invoice or  receipt). 

7. Is there a time limit on purchases under the Tourist Refund Scheme (TRS)?

In order to claim a refund of GST, the eligible goods must be exported as accompanied baggage (carry-on) or unaccompanied luggage (checked-in) not later than 3 months from the date of purchase.

8. Can I use or consumed the goods before leaving Malaysia?  

Non consumable goods such as clothing, cameras and watches can be used before leaving Malaysia. Consumable goods such as drinks, perfume and chocolates are not eligible for GST refund if already partly/wholly used or consumed in Malaysia.

9. Can I claim GST refund to the account of the credit card I used to make my purchases? 

Regardless of how you made your purchase, you may choose to have the refund paid by cash (not exceeding RM300), paid to your credit card account or paid by bank cheque (if cash or credit card is not feasible).

10. Can I make a claim after departing from Malaysia?  

Yes you may, provided you make your claim within 2 months from date of endorsement of your export by the Royal Malaysian Customs Department.

11. What is the difference between a Duty Free Shops and an Approved Outlet?  

The difference between a Duty Free Shops and an Approved Outlets are:-

 (a) Duty Free purchases can only be made from a selected number of Duty Free Shops at International Airports, Port and border Duty Free Shops and the range of goods  supplied is limited.

 (b) Under the TRS, a much larger range of goods (e.g. clothing, electronics) purchased from an Approved Outlets are eligible for a GST refund.  


TRS Refund Eligibility

12. Can I claim a GST refund on a warranty under the Tourist Refund Scheme?

A warranty is a type of service and not goods that can be exported from Malaysia. A purchased warranty is therefore not eligible for GST refund under TRS.

13. Is a student pass holder eligible to claim a GST refund under TRS? 

Student pass holders are treated as normal foreign tourists and therefore are eligible to claim a GST refund under the TRS if they have fulfilled all conditions of the TRS.

14. Can I claim a GST refund under the Tourist Refund Scheme (TRS) if I am leaving Malaysia as a crew member of the aircraft? 

No. If you are leaving Malaysia in the course of your employment as a crew member of an aircraft, you are not eligible to claim a GST refund under the Tourist Refund Scheme. However, if you are traveling as a passenger, you are eligible to claim a GST refund provided that you meet all of the other requirements under the TRS.

15. What type of goods are eligible for a GST refund under the Tourist Refund Scheme (TRS)?  

All standard rated goods are eligible for a refund under TRS with the exception of the following:-

(a) Wine, spirits, beer and malt liquor;

(b) Tobacco and tobacco products;

(c) Precious metal and gems stone (jewellery made thereof is allowed refund under TRS);

(d) Goods wholly or partially consumed in Malaysia (except for clothing/tax invoices to be maintained);

(e) Goods which are prohibited from export under the written law; and

(f) Goods which are not taken out as an accompanied or unaccompanied luggage. 

If you have combination of zero rated goods and standard rated goods bought from the same Approved Outlet, tourist are only allowed a GST refund under TRS for standard rated goods only.

16. As an operator of an Approved Outlet, I would like to know what are the conditions for a GST refund under the Tourist Refund Scheme?

The conditions for a GST refund under TRS are:-

 (a) The customer (who is an eligible foreign tourist holding a valid international passport or visa) must take the eligible goods out of Malaysia via the Approved Malaysian  Airports within 3 months of purchase. The tourist must take these goods out with them either in hand carried luggage (accompanied luggage) or checked-in luggage  (unaccompanied luggage) through air mode.

 (b) To qualify for a refund, the tourist must spend at least three hundred Malaysian Ringgit (RM300.00) threshold (inclusive of GST) for purchases made on different days  from the same Approved Outlet.

 (c) The tourist must be eligible to claim GST refund.  

17. What do you do with blank refund forms?

As an Approved Outlet operator, you must keep your stocks of blank forms under lock and key, and have a proper control over blank or partially completed forms. This will ensure that no illegitimate claims are to be made under TRS. Allow only authorized staff to access the computer terminal used for printing refund forms.


Selling Under TRS

18. What must an Approved Outlet operator do at the time of sale? 

When a foreign tourist purchase eligible goods from an Approved Outlet, the Approved Outlet shall issue a tax invoice or receipt with GST at the prevailing tax rate along with a GST refund form. The sales assistant/cashier at the Approved Outlet also needs to:-

 (a) Request the tourist’s own original valid international passport to verify their eligibility for a GST refund under the TRS;

(b) Remind the tourist to take the goods out of Malaysia via air mode within 3 months from date of purchase and confirm that it is their intention to do so;

 (c) Issue a GST refund form to the tourist using the online issuing solutions provided for this purpose and ensure that the fields that are mandatory at the point of sale are completed;

 (d) Ensure that the tourist understand that s/he must complete all remaining fields including any required personal details prior to presenting the GST refund form for validation by an RMCD officer and that s/he fully understands the conditions of the TRS before leaving the Approved Outlet. (Note: It is prohibited for a tourist to present another person’s passport to an Approved Outlet or to claim a GST refund on behalf of another person).  

 (e) Provide the tourist with a prepaid envelope and instructions on how to claim the GST refund. This envelope is addressed to the Approved Refund Agent and can be used by the tourist to claim their refund if they do not claim it directly from one of the refund points of the Approved Refund Agent, which are located at all airports where RMCD will perform export validations under the TRS;

 (f) Advice the tourist on how the refund is to be paid. Refund can be made either by cash (amount not exceeding three hundred Malaysian Ringgit (RM300)), through credit card or via bank cheque (if cash or credit card is not feasible).

 (g) Inform the tourist about the administrative/ processing fee payable under the TRS;

 (h) Indicate on the tax invoice or receipt either by stamping or otherwise that a GST Refund Form has been issued, e.g., “TRS Refund Form Issued”;

 (i) Indicate on the tax invoice or receipt either by stamping or otherwise that a refund form has been issued, for e.g. “TRS Refund Form Issued”;

 (j) Inform the tourist that they must be ready to produce the purchased goods together with the tax invoice or receipt and completed GST Refund Form to RMCD at the  Malaysian Approved Airports for verification and endorsement of the transaction;

 (k) Advice the tourists to carry small, high valued items as hand carried luggage (accompanied);

 (l) Inform the tourist to return the endorsed GST Refund Form to the Approved Refund Agent in person or by post within 2 months from the date of endorsement by RMCD;

 (m) In contingency situations, where online issuing of the transaction is not possible, a pre-printed contingency GST Refund Form must be completed manually (by hand)  by the sales assistant/cashier at the Approved Outlet. The contingency GST Refund Form come in triplicate. The first copy (customer’s copy) and second copy (Approved  Refund Agent’s copy), together with tax invoice or receipt for the purchase is to be given to the tourist for endorsement by RMCD. The third copy of the refund form is to be  kept by the Approved Outlet operator as record and for auditing purposes. Blank pre-printed contingency GST Refund Form are provided to Approved Outlet operators  exclusively for use in contingency circumstances. As an Approved Outlet operator, you must keep the stock of blank pre-printed contingency GST Refund Forms under lock  and key, and have a proper control over blank or partially completed forms. This will ensure that no illegitimate claims are made under the TRS.


Refunding To Foreign Tourists Under TRS 

19. What is a GT refund form? 

A GST refund form is a form which enables a tourist to claim a GST refund which they have paid on their purchases at an Approved Outlet. This form is issued by the sales assistant/cashier at the Approved Outlet and must be verified and endorsed by RMCD as a proof that the goods have been taken out of Malaysia. Normally, the validation of GST refund transaction is performed using a digital system operated by the RMCD officers at the GST Refund Verification Counters at the 8 Malaysian Approved Airports in Malaysia where the TRS is supported. The digitally validated transaction becomes the basis for any subsequent audit. However, in contingency circumstances, the GST form itself will be manually validated by RMCD Officer and provides the basis for audit.

20. What information is required on a GST refund form?  

The following information is required in a refund form:

(a) Fields to be completed by the Approved Outlet operator with an online issuing solution or by hand for manually-issued forms.

  Approved Outlet Details (GST registration number, Approved Outlet name and Approved Outlet address) Purchase details (shop receipt number, receipt date, goods  category/ description of goods, line gross amount, issue date of transaction, total gross amount, total GST amount, administrative charge/fee, refund amount, serial number  of the transaction). All amounts are to be expressed in Ringgit Malaysia.  

(b) Field to be completed by the tourist prior to validation of the transaction by an RMCD Officer

  Tourist/ Customer details (name, passport number, passport issuing country, country of residence, date of arrival in Malaysia, date of departure from Malaysia, refund  method)

(c) Fields to be completed by Royal Malaysian Customs Department (RMCD)

  Endorsement by Royal Malaysian Customs Department (RMCD) - to validate the goods purchased will be taken out of Malaysia.

 (To download a soft copy of the specimen format of the refund form, please visit our website at http//www.customs.gov.my)

21. When do I issue a refund form if I am an Approved Outlet operating under the Tourist Refund Scheme?

The Approved Outlet should issue the GST Refund Form on the same day you sell your goods to an eligible tourist. However, as an Approved Outlet, you can also issue the GST Refund Form for purchases made on previous dates provided you have a system that allows you to ensure that the TRS would not be manipulated or abused and you are able to check the following details:

 (a) The person requesting a GST Refund Form is the same person who purchased your goods;

 (b) The tax invoice or receipt produced has been issued by your Approved Outlet and is genuine;

 (c) No GST Refund Form has been issued before for the same tax invoice or receipt.

22. What action is required by an Approved Refund Agent when making any GST refund to tourist?

Before any GST refunds are made, the Approved Refund Agent would have to:

 (a) Ensure the GST Refund Form has been endorsed by RMCD and it is received within 2 months from the date of endorsement (manual during contingency);

 (b) Check to see if any alterations have been made on the GST Refund Form. If any alteration is made, it should be chop and signed by the proper officer of customs  (manual during contingency);

 (c) The refund transaction has been digitally stamped in the Customs Approval System (CAS) and it was stamped within 2 months from the date of GST refund claim (online  transaction);

 (d) Approved Refund Agent can only refund the GST amount claim on the actual eligible goods under TRS. Reimbursement claim can only be made on the actual amount  refunded and not on the amount of GST paid as stated in the GST Refund Form.  


Claiming A Refund From RMCD Under TRS

23. What must an Approved Refund Agent do to claim refund/ reimbursement of GST from RMCD? 

As an Approved Refund Agent you must:-

 (a) Be a GST registered person;

 (b) Have received the GST refund form endorsed by RMCD from the tourist within 2 months from RMCD endorsement of the refund form;

 (c) Have refunded the GST to the tourist (minus administrative fee) within 2 months from the date of RMCD endorsement of the refund form. If GST refund is made via  cheque to the tourist, can claim GST reimbursement from RMCD only after the cheque has been cashed by the tourist.  

 (d) Put up claim of GST reimbursement (amount refunded to tourist plus administrative fee) from RMCD through a half monthly statement. Approved Refund Agent will file  reimbursement claim every two weeks and payment by RMCD on every reimbursement claim made will be within 30 days.
 
 (e) Need not attach the claim forms to the half monthly (two weeks once) statement but must keep the claim forms for auditing purposes

 (f) Maintain documents and records for seven years and make sure all conditions of the TRS has been fulfilled.

24. Can the refund be made if the tourist has lost the tax invoice?

If the customs officer is able to verify the goods to be exported (taken out of Malaysia) by the tourist against the TRS refund form then the refund may be considered. RMCD can also check with the Approved Outlet if purchases was actually made by the tourist at the Approved Outlet.

25. What will happen if the tourist fail to produce the GST refund form at the customs check point?

No GST refund will be allowed without the refund form.


Records, Account Keeping and Expenses 

26.  What type of documents and records does an Approved Refund Agent need to maintain under TRS?

To qualify for a reimbursement from RMCD, it is important for an Approved Refund Agent (ARA) to maintain the following documents for at least 7 years to prove to RMCD that ARA have satisfied all the conditions of claiming reimbursement under TRS:-

 (a) Separate account (hard copy/soft copy) of sales record at the Approved Outlets, and refunds of GST made to eligible tourists under the TRS;

 (b) Copies of invoices and receipts issued for the eligible goods under TRS which have been exported;

 (c) Original copy of endorsed GST Refund Form received from the tourists; and

 (d) Evidence of payment made to the tourists. Required to maintain records of refund payment (cheque, bank cheque, credit card and cash) issued as part and parcel of the  accounting and business records. All these records are to be kept for auditing purposes.

27. Can an Approved Refund Agent claim ITC?

The supply of services by an Approved Refund Agent is categorized as International services and it is to be zero-rated. These services are given in respect of goods exported. Hence, GST is charged at zero rate on the administrative fees charged by ARA to tourists. However, an Approved Refund Agent who is a GST registered person is entitled to claim ITC.

28. Do you need to account for GST on the administrative fees charged to tourist by an Approved Refund Agent under TRS?  

The administrative fees is a consideration for a supply of service to the tourists by an Approved Refund Agent and it is to be zero rated because it qualifies as an international service. These service is supplied directly in connection with goods for export outside Malaysia and supplied to a person who belongs in a country other than Malaysia, at the time the service was performed. 
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