Any retailer who makes taxable supplies (i.e. standard and zero rated supplies) where the sales turnover in a year has exceeded RM500,000.00 is liable to be registered as a GST registered person or company. However, any retailer whose sales turnover does not reach the threshold of RM500,000.00 can choose to be registered voluntarily or in the expectation the limit may be reached.
When goods and services are supplied by registered retailers, GST is charged and collected by the registered retailers. The GST charged is called an Output Tax. A non-registered retailer cannot charge GST on the supplies made by him.
GST charged on standard rated supplies (Tax Code SR)
Assuming the value of goods or services supplied is RM100.00 and GST chargeable is 6%
Value : RM 100.00
6% GST charged :RM 6.00 (output tax)
(6% X RM100.00)
Total (price inclusive of 6% GST) : RM 106.00
The tax invoice issued must show the GST Registration Number, the GST chargeable for the standard rated supplies (Tax Code SR) and where involving exempt supply to clearly state on the invoice no GST is chargeable for the zero rated(Tax Code ZR) and exempt supplies (Tax Code ES).
When a registered retailer acquires taxable supplies from another registered person in the course or furtherance of his business, the registered person will charge GST to him. The GST paid by the registered retailer on acquisition is known as Input Tax which he is entitled to claim back. A non- registered retailer is not entitled to an input tax claim. To claim the input tax incurred on acquisition the registered retailer must hold a tax invoice or import documents under his business name for those acquisitions.
The registered retailer is responsible to account both input tax and output tax in his tax return form (GST 03) for the taxable period when the transaction took place.
In making the input tax claim, the registered person will in his GST tax return deduct the input tax paid from the output tax charged. If the aggregate of output tax is greater than the aggregate of input tax in that taxable period, then the net tax is to be paid to the government. If the aggregate of output is less than the aggregate of input tax, then the government will refund the difference to the registered retailer.
A customer may return goods to a retailer if he is not satisfied with the goods or the goods are damaged, and a tax invoice has been issued for the returned goods, the retailer has to issue a credit note when he makes the refund including the GST portion paid by the customer.
The taxable period will be assigned accordingly when the GST registration is approved, normally a period of one month or three months ending on the last day of every month/ quarter or any other such period as approved by the Director General of Customs.
Author: Felix Raj / Mohan