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Kindly take note that there is a new paragraph on Good Written-Off has been added to the Para 66 revised General Guide as at 12 July 2016.

The below excerpts has pointed out that scrap sales are subjected to GST and explains the need for documentary evidence required by the Royal Malaysian Customs in the event the written-off goods are disposed off other than by sale.

The excerpts from Para 66:

Goods written-off

66.   Goods may expire or may be damaged and subsequently written-off and destroyed in the course of business. Input tax credit is allowable for these goods and supporting documents need to be furnished to RMCD upon request. If the written-off goods are sold as scrap, it is subject to GST 6% and the company has to issue a tax invoice. For written-off goods which are disposed off other than by sale, GST registered person is required to keep the related documents as proof that the goods has been written-off and disposed.

For example, if such goods has been destroyed, then a certificate of destruction has to be signed by the company’s chairman or director which is to be kept for audit purpose.

Documents that are required to be kept by GST registered person for the written-off goods are as follow:

(a)audited report / financial statement and management report;

(b)audited accounts reporting the written-off goods;

(c)evidence that the asset has no commercial value;

(d)evidence that the asset is spoiled / unusable / expired;

(e)approved letter by relevant body for disposal / destruction(if any) e.g.: Certificate from Ministry of Health Malaysia, Environmental Department or Department of Chemistry Malaysia;

(f)destruction certificate signed by company’s chairman / director (refer to Appendix 1);

(g)other documents as proof the asset has been disposed / destroyed”

The link to the General Guide as at 12 July 2016.

Do contact us for further clarification.

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