SST 2.0: Customs proposes new taxable items

Examples of goods exempted from sales tax

KUCHING, August 6: The Customs Department (JKDM) has proposed several new items in the sales and services tax (SST) scope of taxable services 2018.

The list of proposed taxable and exempted items was shared with participants and civil servants at the ‘Handholding SST’ implementation briefing in Kuching today.

Customs senior officer Noelle Lily Ronald Mosse said the SST had been fixed at five per cent and 10 per cent for goods and six per cent for services. They will come into force next month.

Among the proposed new items to be taxed are domestic flights (except rural air services), electricity, IT services and gaming.

The proposed scope of taxable services.

Other proposed taxable goods include processed food and drinks, personal care, furniture, electrical appliances and petroleum products.

Proposed taxable goods

Under the proposed provision of electricity, those in business or domestic consumers will only be taxed if they consume more than 600kwh. Service tax will be charged on the actual value of taxable service provided.

As for domestic flights, only sectors under rural air services will be exempted.

Depending on the value, 10 per cent sales tax will be imposed on general goods, including vehicles.

But consumers can heave a huge sigh of relief as groceries are among the items exempted from the SST. These items include sardines, dairy products, coffee, tea, chilli sauce, tomato sauce, cereals, wheat, margarine, rice, fish, chicken, vegetables and fruits.

Noelle said under the SST, the number of goods not subjected to tax is 10 times higher than under the previous Goods and Services Tax (GST).

“During GST era, only 545 items were tax exempted, but under SST, 5,443 items are exempted,” she revealed.

Meanwhile, the Customs Department also proposed Labuan, Langkawi and Pulau Tioman (between and within) as three designated areas with no SST as they are deemed outside Malaysia.

Other special areas deemed outside Malaysia, such as those in free industrial zones and free commercial zones, licensed warehouses, joint development areas and licensed manufacturing warehouses are also under the SST exemption proposal.

The Customs Department has been conducting the ‘handholding’ programme nationwide since July 24 this year to help industry players with the transition to SST 2.0. This includes briefings and forums on the tax.

Today’s programme was launched by the department’s deputy director general Datuk Paddy Abdul Halim.

More than 1,000 participants from various industries as well as federal and state agencies attended the talk.

In his opening remarks, Paddy said the comeback of SST from Sept 1, deemed as “SST 2.0”, will be simpler, similar in terms of law, but with some enhancements.

He believed there would be some challenges and issues but was confident it could be sorted out.

Comparing to the old SST, where manual filing was used, the new SST filing would be done electronically. — DayakDaily