GST vs current Income Tax and Support Tax, what is the differences?
1. Individual in comparison to several stages
Unlike the current Malaysia sales tax and repair tax, GST is usually billed on the intake of products
or solutions at every level of the provide sequence, with the tax pressure eventually carried by the end
customer. This several tax levels function of GST is the essential modify from the existing single-
stage Malaysia sales tax and repair tax billed at only one level of the provide sequence.
2. Products and solutions topic to tax
GST functions on a negative idea – all products or solutions are topic to GST unless particularly
excused. For Malaysia sales tax, the same idea is applicable where all products are taxed unless
particularly excused. It is expected that the number of exceptions under the existing Malaysia sales
tax program would be considerably reduced.
Service tax, however, functions on a positive idea where only solutions that are particularly
recommended are taxed. Under a GST program, the other will apply and a much broader range of
solutions will fall within the GST net than before. The potential of a broader tax platform under a
GST program is eye-catching to government authorities, as it offers greater versatility as an income
evaluate and guarantees convenience as opposed to process of providing exceptions and determining
taxed solutions under the current Malaysia sales tax and repair tax respectively.
3. Tax transaction and bookkeeping periods
Time of provide is an essential function under the GST program as it decides when one should
consideration for GST in the GST profits. The strategy used by many nations when implementing
GST is that a provision is considered to have taken place at the first of the following three events:
• The time a bill is issued; or
• The time any transaction is obtained by the supplier; or
• The time a taxed provide is made
The tax transaction by GST registrants is exercised by subtracting GST attributes (input tax) from
GST due (output tax) in the GST come back.
The GST guidelines vary from the current Malaysia sales tax framework where Malaysia sales tax
becomes due and due when there is a selling or convenience otherwise than by selling. On the other
side, service tax is only due when transaction is obtained, and where transaction is not obtained, the
tax is involved at the end of the 12-month period from the date of bill released. The GST idea of your
energy and effort of provide is therefore usually broader than the conditions in the current Malaysia
sales tax and repair tax and it will be essential for companies to learn to deal with the modify, as there
will possibly be changes to the enterprise’s money moves under the new tax.
4. Team registration
Under most GST routines, group signing up is involved as a service that allows organizations to data
file combined GST profits. The purpose is to reduce their GST management costs where provides
created within a team would be overlooked for GST reasons. The service could possibly result in
better income management for the team if products or solutions are consistently offered between
The current Malaysia sales tax and repair tax components do not allow combined tax filings.
Operating tax, ‘group relief’ is available for certain professional solutions when offered to
organizations within the same group and topic to certain restrictions.