On 17th June 2020, Royal Malaysian Customs Department (RMCD) has published the latest update on Service Tax Policy 9/2020 – Service Tax Treatment on Group A: Accommodation, under First Schedule Service Tax Regulations 2018:
1. Service tax (SST)
- Service tax (SST) exemption from 1st March to 31st August 2020 is extended to 30th June 2021.
- This exemption only applicable to service provider registered under Group A.
2. Tourism Tax (Ttx)
- Tourism Tax (Ttx) will be exempted and effective from 1st July 2020 to 30th June 2021.
3. Responsibility of accommodation premises operator:
- Continue issuing invoice & state as “0%” service tax or “tax exempted”
- SST-02 Form should be submitted as usual and value of exempted service shall be declared in item 18(c).
- Imported taxable services (SST-02) shall be submitted as usual.
- Ttx-03 Form shall be submitted as usual.
4. Transitional issues
- For services occurring on 29th Feb 2020 and ending on 1st March 2020, the service is SUBJECT to service tax.
- For services occurring on 30th June 2021 and ending on 1st July 2021, the service is EXEMPTED from service tax.
- For exempted service take place on 29th February 2020 and ended on 3rd March 2020, the apportionment shall be made.
- The services provided from 1st March 2020 to 30th June 2021 that have been collected and tax has been charged (advance payment), but not yet declared in SST-02 Form, credit note shall be issued on the amount of service tax charged.
- The tax have been charged, collected and accounted in SST-02 form for services provided from 1st March 2020 – 30th June 2021, the following shall be take note:
a. Individual customers – The operator shall refund the service tax & apply for approval to do tax adjustment under Section 39 of the Service Tax Act 2018.
Section 39 of the Service Tax Act 2018
Deduction from return of refunded service tax
39. (1) The Director General may approve, subject to such conditions as he deems fit, an application by any registered person to deduct from time to time from his return referred to in section 26 the amount of service tax paid but subsequently refunded to his customer by reason of –
- cancellation of taxable service;
- termination of taxable service; or
- such other reasons as may be approved by the Director General.
(2) The registered person shall make the deduction referred to in subsection (1) within one year after the payment was made, or such extended period as may be approved by the Director General.
b. Non-individual customers – The operator shall issue credit note as prescribed under Regulation 11(1) & make adjustment in accordance to Regulation 11(2) of the Service Tax Regulations 2018.
Regulation 11(1) and 11(2) of the Service Tax Regulations 2018
Issuance of credit note and debit note
11. (1) A person providing any taxable service shall issue a credit note or debit note where, after the return for the taxable service has been furnished to the Director General, there is a reduction of, or addition to, service tax amount which has been charged on the taxable service-
- due to change in the rate of service tax in force under section 10 of the Act; or
- due to any adjustment in the course of business.
(2) Where there is a reduction of, or addition to, service tax amount under subregulation (1)-
- the person providing taxable service shall make the deduction or addition of service tax in the return for the taxable period in which the credit note or debit note is issued or received; or
- in the case of a person who has ceased to be a taxable person, the person shall make the deduction or addition of service tax in the return for the last taxable period during which he was registered.
(3) A credit note or debit note issued shall contain the following particulars:
- the words “credit note” or “debit note” in a prominent place;
- the serial number of the credit note or debit note;
- date of issuance of the credit note or debit note;
- the name, address and identification number of the registered person;
- the reason for the issuance of the credit note or debit note;
- a description sufficient to identify the taxable services;
- the quantity and amount for each taxable service;
- the total amount excluding service tax;
- the rate and amount of service tax; and
- the number and date of the invoice issued for the taxable service.
- Any person who contravenes the regulation commits an offence.
Source from RMCD Official Website Announcement (https://mysst.customs.gov.my/assets/document/Service%20Policy/STP%20No9%20of%202020%20(Amendment%20No_1).pdf)
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