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Industry Guide:

Warehousing Scheme

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Movements of goods into a licensed warehouse 

1. If I am an importer in a principal customs area and I would like to buy goods from Labuan, can I keep the goods that I purchased in a warehouse? What is the GST implication on the movement of such goods? 

Goods purchased from Labuan are deemed to be imported under the GST law. Hence, you are allowed to store your goods purchased from Labuan in a warehouse with GST suspended. 

2. If I want to transport my goods from a warehouse to another warehouse for value-added activities, will the GST on goods be suspended?

GST on goods that are to be removed from a warehouse to another warehouse is still suspended since the goods remain under customs control. Such movement is to be covered under Customs Form No.8. 

Movements of goods from a licensed warehouse

3. If I am a trader and I have consolidated goods consisting of locally acquired and imported goods in a bonded warehouse which I would like to sell them to duty free shops (DFS) or to an operator in a designated area, what is the treatment of GST on such goods?

Payment of GST is suspended for any movement of goods between a warehouse to a duty free shop since duty free shop is also a warehouse. However, the consolidated goods can be zero rated when such goods are removed from the bonded warehouse to a designated area.

4. If I am an approved person under an Approved Trader Scheme (ATS), can I use the scheme to suspend GST on goods purchased from a warehouse?  

GST can be suspended when you buy imported goods from a warehouse, if you are an approved person under ATS. Please refer to the ATS guide for further details.

5. Are incidental services such as transportation and other charges provided by a transport company and forwarding agent attract GST when goods are removed from or to a warehouse? 

Generally, services in relation to removal of goods from or to a warehouse such as transportation and other charges would attract GST if the service provider is a GST registered person.

Supply of goods and services within a warehouse

6. I outsource my labeling and repacking activities within a bonded warehouse. What is the GST implication on the outsourced services?

The outsourced services are subject to GST if provided by a GST registered person even though the activities are carried out within the warehouse.

7. I am a trader. If I would like to buy goods owned by Mr. Ali which are currently stored in a public bonded warehouse and then consolidate them in the warehouse with goods locally purchased before exporting them, do I have to pay GST on my local purchase?

You have to pay GST on your local purchase. However, no tax is imposed on your purchase from Mr. Ali as the goods were supplied within the warehousing scheme. You can zero rate your consolidated goods when you export them. If you are a GST registered person, you can claim the tax charged on your local purchase as your input tax credit.

8. If I, as a trader, purchase warehoused goods from Mr. Ali and Mr. Wong, repack those goods and then sell them to Mr. Raju in the same warehouse, is there any GST chargeable on the purchase and sale of the goods within the warehouse?  

No GST is imposed on the sales of the goods since supplies that take place within a warehouse and before the duty point are disregarded.

Liabilities and responsibilities of a warehouse operator

9. If I am a warehouse operator and at the same time I am also an Inland Clearance Depot (ICD) operator, using the same company name, do I have to register both businesses separately?

A company which carries out different type of businesses is still regarded as one entity. Hence, both businesses would be treated as operated by a single taxable person. However, the different business units may be registered separately according to the nature of the business under divisional or branch registration. (Please refer to the GST Registration Guide for further details).

10. I operate a few warehouses which are located throughout Malaysia. If my turnover for each warehouse falls below the threshold level do I still have to register?  

If the aggregate turnover from all your warehouses exceeds the prescribed threshold, you have to register your business even though the turnover for each warehouse is below the threshold.

11. How long must I keep the records for my warehoused goods?  

You must keep the records, accounts or documents related to the warehoused goods in your possession for at least seven years. Failure to do so is an offence and will be subjected to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

12. Do I have to keep the records in my warehouse? 

You must keep all your warehouse records and documents in your premise, unless allowed otherwise by the Director General.

13. What must I do if there are discrepancies between the actual stock and the recorded stock? 

If there are such discrepancies, you must submit a report without delay to the Director General, containing the following:

(a) actions taken to investigate the discrepancies and their outcome;

(b) amount of customs duty and/or GST payable, if applicable; and

(c) date of payment of customs duty and/or GST.  

If goods are found to be deficient in your warehouse, you are liable to pay the GST due on such goods as you are responsible for the security and proper control of the warehoused goods.

However, if you can prove to the satisfaction of the Director General that the deficiency has been caused as a result of unavoidable accidents, such as a fire or break-in at the warehouse, etc. supported with documents such as insurance claims, police report, or a survey report, then the Director General may remit the tax chargeable.

14. What happens if goods are damaged in a warehouse?  

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

15. What are the treatments of GST on goods and services consumed in a warehouse?  

Supply of goods and services consumed in a warehouse are subject to GST. This means that services provided by you such as handling of goods and storage charges are standard rated. You must declare the GST levied in your GST return as your output tax.

The person who acquired your services such as importer or owner of warehoused goods can claim GST incurred on the services charged by you, as his input tax credit if he is a GST registered person.

16. Can I, as a warehouse operator claim GST charged on my utilities and warehouse equipment such as forklifts?  

You can claim all GST incurred on your acquisition in the course of furtherance of your business if you are a registered person. This includes acquisition such as capital assets and all overheads related to your business.

17. What is the GST implication on my goods in the warehouse should I deregister?

You may deregister if your taxable supplies have fallen below the threshold. You are required to inform the Director General in writing. When you cease to be a registered person, you are required to account for tax in your final return on all your stocks excluding stored goods. You remain responsible for any discrepancies on the stored goods.
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