Circular No 137/2018        
Dated 31 May 2018

To Members of the Malaysian Bar

Rate of Goods and Services Tax to Become Zero Per Cent

As you may be aware, the Prime Minister of Malaysia, Tun Dr Mahathir Mohamad, issued P.U. (A) 118/2018 entitled “Goods and Services Tax (Rate of Tax) (Amendment) Order 2018” dated 16 May 2018, which specifies that the rate of the Goods and Services Tax (“GST”) will be amended from 6% to 0% with effect from 1 June 2018.  A copy of P.U. (A) 118/2018 is attached for your reference.

Also attached are copies of the following orders, also dated 16 May 2018, from the Federal Government Gazette:

     (1) P.U. (A) 119/2018: Goods and Services Tax (Zero-Rated Supply) (Revocation) Order 2018;
     (2) P.U. (A) 120/2018: Goods and Services Tax (Relief) (Revocation) Order 2018;
     (3) P.U. (A) 121/2018: Goods and Services Tax (Imposition of Tax for Supplies in Respect of Free Zones) (Revocation) Order 2018;
     (4) P.U. (A) 122/2018: Goods and Services Tax (Application to Government) (Revocation) Order 2018; and
     (5) P.U. (A) 123/2018: Goods and Services Tax (Imposition of Tax for Supplies in Respect of Designated Areas) (Revocation) Order 2018.

Members are advised to take note of the statutory rules in respect of “time of supply”, as GST may, in certain instances, still need to be included in tax invoices issued after 1 June 2018.  For example, all billings after 1 June 2018 that include or relate to any taxable supplies made prior to 1 June 2018 will still attract GST and thus require tax invoices.

Please consult your tax adviser if you have any queries regarding the foregoing and/or the transitional period.

Please refer to the website of the Royal Malaysian Customs Department (“RMCD”) at http://www.customs.gov.my/ms for the latest guidelines and updates, including its “Frequently Asked Questions (FAQ) Transitional 6% – 0%” (“FAQ”). Members should bear in mind that RMCD may issue guidelines or updates that may modify or contradict those previously issued.

Thank you.

Anand Raj 
Chairperson 
Tax Subcommittee of the Corporate and Commercial Law Committee