Premium Essay

Gst Implementation

In: Business and Management

Submitted By nurfazlina92
Words 504
Pages 3



Goods and Services Tax (GST) is an issue frequently being discussed recently in Malaysia, this happen when the government announced to implement the GST. The national budget of Malaysia 2014 had been discussed in parliament on 25 October 2013 proposing that GST would be implemented commencing on 1 April 2015 at 6% rate. GST, is also known as the value-added tax (VAT) in many countries such as Singapore, Hong Kong, United Kingdom and Canada. Currently, more than 160 countries have implemented GST. Tax is recognized as one of the main sources of government’s income. GST has been raised by the Malaysia Government as an approach to reduce its deficit.

SMEs are defined as a business enterprise in the manufacturing sector with an annual sales turnover not exceeding RM50million or with less than 200 full time employees, while for the services sector enterprises the corresponding number are RM20 million or 75 workers. Any businesses with annual sales of taxable turnover exceeding RM500,000 is mandatory registration with Royal Customs Malaysia. With registration can allow the business owners to claim the GST paid on the purchases or inputs which will otherwise become a cost.


The purpose of the Goods and Services Tax implementation is to solve the economics problem, this including inflation, turmoil and also unemployment. With this GST can enhancing the economic growth of the country. The huge amount of GST collected by government, the government can manage the country with more effective and efficiency. The government can use the GST collected to developing countries with build any infrastructures such as schools, transportation and hospital.

However in Malaysia, GST is about…...

Similar Documents

Premium Essay

Gst the Next Big Reform big reform – GST Submitted to – Prof. I. Sridhar By, Ashwin R Golapkar Section E 2012PGP120 TABLE OF CONTENTS Introduction ....................................................................................................................................................... 3 Objectives of Tax reforms ............................................................................................................................. 5 Implementation of the Existing System .................................................................................................. 11 Shortcomings of the Existing Tax Structure .......................................................................................... 13 Alternatives Available in the implementation ....................................................................................... 18 Tax base and Rates ........................................................................................................................................ 25 Implementation of GST in other countries......................................................................................... 37 Data Analysis and Interpretation........................................................................................................... 38 BIBLIOGRAPHY ............................................................................................................................................. 40 LEGAL ASPECTS OF BUSINESS | GST-the next big......

Words: 14431 - Pages: 58

Free Essay

Gst Issues

...PBL 1 GST ACT 1999 s29.40 Choosing to account on a cash basis Is the GST done on an accruals or cash basis? Cash basis GST ACT 1999 s195.1 "GST exclusive market value" , in relation to a supply or acquisition:                      (a)  other than of a * luxury car--is 1 0 / 11 of the * GSTinclusive market value of the supply or acquisition; or                      (b)  of a * luxury car--is 1 0 / 11 of the * GSTinclusive market value of the luxury car (excluding any * luxury car tax that is, or would be, payable on the supply of that car). What was the cost of the vehicle? $90,000 GST inclusive $57,466*60%=$34,480 $34,480*10/11= $31,345 G10 GST=$3,135 How much was the car used for business? 60% Did you use an ABN number when buying vehicle? Yes How is the Car depreciated? Straight line depreciation over 8 years What method do we use for the car? Log-book method, car has driven over 5000km What is the loss on sale of non-current asset? We sold a computer for $1,100 (GST 100). We bought it for $2,900 and had a depreciation of $1,520. So it had a written down value of $1,380 (2,900-1,520), resulting in a loss of $380. GST ACT 1999 s38.3-food that is not GST-free What are the food sales? Fresh food - $58,000(GST-free) Sandwich – $14,000 (GST 1,400) Microwave Meals – $8,000 (GST 800) Chocolate, lollies and snacks – $10,650(GST 1,065) Total – $90,650 (GST free sale 58,000) GST 1400+800+1065=3265 GST ACT 1999 s38.3(d)......

Words: 3959 - Pages: 16

Premium Essay

Implementation of Gst in Malaysia income tax rates and policies concerning individuals and sole proprietor businesses that were proposed in the Budget 2014. The three significant changes in tax policies are listed below. Review of Individual Income Tax In consideration of the implementation of the Goods and Services Tax (GST) which takes effect on 1stApril 2015, the government had proposed several changes to reduce individual income tax rates with effect from Year of Assessment (YA) 2015. The proposed changes are: I. Income tax rates for resident individuals is to be reduced by 1% to 3% II. Income tax rates for non-resident individuals is to be reduced by 1% from 26% to 25% III. Current maximum tax rate at 26% to be reduced to 24% IV. Two new chargeable income bands be added above the existing highest income band exceeding RM 100,000, with RM100, 001-RM250, 000 as the second highest band and RM250, 001-RM400, 000 as the highest band. V. Chargeable income subjected to the maximum rate will be increased from exceeding RM100,000 to RM400,000. Such proposed changes will bring about savings across the band for all taxpayers and so increase the disposable income for all individuals. This measure is necessary as the implementation of GST will increase the cost of living which will impact the lower income bracket the most. The proposed change will bring about a more progressive tax structure as families with a monthly income of RM4, 000 will no longer have a tax liability. Also, this......

Words: 3421 - Pages: 14

Premium Essay

Gst in India

...Research Review Vol. 4 (1) Goods and Services Tax (GST) in India: prospect for states by Mohd. Azam Khan1 and Nagma Shadab2 Department of Economics, Aligarh Muslim University, India Abstract: Goods and services tax (GST) is a broad based and a single comprehensive tax levied at every stage of the production and distribution chain with applicable set-off in respect of the tax remitted at previous stages. It is basically a tax on final consumption integrates the union excise duties, custom duties, services tax and state VAT. Presently around 140 countries have adopted the GST pattern, including India. The GST would be beneficial for the consumers as it reduces the final burden of taxation. For Government it leads the reduction of tax compliance efforts and administrative costs and for business units it leads transparency, complete set-off and removal of cascading effect of taxation. It is in this background that the present paper tries to explain the significance of GST in India and its prospects for states to generate revenue and ensure transparency in tax structure. This paper is organized into seven sections. Section two presents justification for dual structure of GST in India. The third part presents the rate structure under GST work in India. The fourth segment is concerned with the working of GST in India. The fifth part shows the international experiences of GST at state level in India. The seventh and final part is related to conclusion......

Words: 8698 - Pages: 35

Premium Essay

Introduction to Gst

...Introduction The idea of introducing a flat consumption based Goods and Services Tax (GST) in Malaysia has been floated since 1989. It now seems as though this may become a reality in the 2014 Budget, with implementation beginning within 18 to 24 months at an initial rate of 4 % on the supply chain. The plan to overhaul the tax system has begun to gain momentum as the government deals with an increasingly weak economic outlook, combined with global uncertainty. While not at the emergency levels of many advanced Western European economies, Malaysia has not run a structural budget surplus since the Asian Financial Crisis hit in 1997. Federal government debt as a percentage of Gross Domestic Product (GDP) currently sits at 55.4 %.1 For the time being, this is manageable, but it is the government’s ability to reign this spending in, as well as lack of budgetary reform that has led ratings agency Fitch to downgrade Malaysia’s credit outlook to negative this year. The government’s recent 20 sen cut to the fuel subsidy and increasing speculation of a GST framework to be included in the upcoming budget can be seen as evidence that they are trying to remedy both structural and cyclical economic challenges. Furthermore, for far too long there has been an overdependence on the revenue generated from oil and gas dividends, which currently account for over a third of total government revenues. 2 A GST offers a single unified system where the tax burden is equally shared between the......

Words: 6974 - Pages: 28

Premium Essay

Public Readiness for Gst Implementation in Malaysia 2015

...EPGB6122 Title: “Public Readiness in GST Implementation 2015 - In case of Kuala Lumpur, Malaysia” Prepared by: Noorul ‘Aini Hanifa binti Su’aidi EGC140004 Masters in Public Administration Semester 2014/2015 Public Readiness in GST Implementation 2015 - In Case of Kuala Lumpur, Malaysia 1. Background Taxation is one of the important elements in managing national income, especially in developed countries and has played an important role in civilized societies since their birth thousands years ago (Lymer and Oats, 2009). The introduction of Goods and Service Tax (GST) was first announced in Malaysia Budget 2005, and then projected to be implement in January 2007. In February 2006, government has announced that the implementation would be postponed to a later date. In 2010, it was when Government finalizing the study of the implementation of GST and identifying the social impact of GST on the public and inviting many discussions among expert and GST proponents publicly. The uncertainty on GST implementation cast many doubts as to whether Malaysia needed the GST regime, and if so, what could be the public benefits to the public from this exercise. The government had putting a great effort in promoting the implementation of GST, however an attention to educate the public of GST understanding should be in place as well. Hence, GST is not a new exercise of tax; with more than 140 countries worldwide having had implemented GST, and this is includesd many......

Words: 2638 - Pages: 11

Premium Essay

Gst Effects on Certain Goods

...The article mainly issues about the implementation of the Goods and Services Tax (GST) and its effects on the pricing of consumer items. GST is an ad valorem tax, since as mentioned in the article, it imposes a 6% tax rate on the price of the goods or services. The government has also identified which items will be taxed, depending on the level of its necessity and its elasticity. (HABIB, 2015) (Graph 1 shows the effect of ad valorem tax on the supply curve) An implementation of GST would cause a shift of the supply curve upwards and towards the left, from S1 to S2. This is because when a tax is imposed, it would cause the costs of producing the goods to increase, therefore the firm would be willing to supply less output (Tragakes, 2012). In this case, prices for the items which have not been taxed by Sales and Service Tax (SST) before, such as computers, laptops, men’s watches, cosmetics and such which are considered non-essential, will increase and therefore the firms would have to decrease its production. As such, the consumers would also be affected, as they have to pay a higher price for the items due to the implementation of tax. Also, items which were previously imposed with SST, such as television sets and air conditioners, would become cheaper, as the 10% tax rate will decrease to 6% tax rate with the implementation of GST (HABIB, 2015). This will cause the supply curve to shift downwards and rightwards from point S2 to S3. Consumers who are willing to buy......

Words: 866 - Pages: 4

Premium Essay

Getting the Facts Right on Gst

...The Star (10/2/15) Getting the facts right on GST BY IVAN LOH SECOND Finance Minister Datuk Seri Dr Ahmad Husni Hanadzlah’s special assistant Ting Tai Fook has travelled around the country to give talks about the goods and services tax (GST) to the community. In all his talks, Ting explained extensively about the tax system that would be implemented from April 1 to replace the existing sales and service tax. The Star talks to Ting to get more answers about GST. 1. What was your first impression of the GST before the Government decided to implement it? Ting: I read and knew about GST when it was first mooted by the Government couple of years back. It is also known as Value Added Tax (VAT) and I knew that it was a good system. I think most people are familiar with VAT’s concept which is used overseas. We show the receipt to the Customs officers and get a tax refund. Many other countries around the world have already implemented the GST. 2. What are the biggest misconceptions about the GST? Ting: Most people think that the GST is a new taxation mechanism. They think that the Government would include both the GST and SST together, increasing the people’s burden, which is wrong. GST is not only implemented in developed countries but also other countries. About 160 countries have it. 3. How will GST affect or benefit the people from the lower- and middle-income groups? Ting: The GST will let people in general be more aware about consumerism. With......

Words: 922 - Pages: 4

Premium Essay

Gst Inflation

...The recent introduction of GST (Goods and Services Tax) in Malaysia has had many scratching their heads into whether there will be a change in the price level of the Goods and Services for better or for worst – so in other words, Does GST has an impact on inflation? Some may argue that since the basic tax rates on most goods at point of sale are set to fall, how on earth can this be inflationary? Yet again, many has predicted that inflation will occur due to the introduction of GST, because GST is a multi-stage tax, cost high; price increase. Theoretically, the introduction of GST in Malaysia is almost just accompanied by a one-time spike in price level of cost of living, and it should not have an impact at the inflation rate. Ministry of Finance secretary-general Tan Sri Mohd Irwan Serigar Abdullah quoted that: “Prices of some goods may rise, but this should go down later on. Hopefully, this is a one-time spike, after that it (the inflation rate) will moderate downwards. With all that said, why is price still going upwards at the moment? Probably due to the involvement of some company taking advantages on the introduction of GST, by increasing their selling price or Tax fraud and evasion, for example deliberately inflating invoices to claim greater tax rebates. But as the times goes on the inflation should diminished and the price level for the goods and services will return back to the normal rate....

Words: 253 - Pages: 2

Premium Essay

Gst in Malaysia

...Abstract The upcoming commencement of GST, the Goods and Services Tax, in Malaysia has been critically received by citizens. This study has been conducted to gauge the level of awareness and approval of GST among IIUM students. The general outlook on GST is negative, stemming from a lack of awareness as to what GST truly is and the taxpayers mindsets (Abdul Mansor & Ilias, 2013). Questionnaires were distributed to random IIUM students aimed at getting their awareness on GST and its implementation. The findings indicate that IIUM students are aware of GST and its imminent implementation and conflicting views on whether or not they approve of its implementation. Perhaps with a little scrutiny and education it might be possible to increase awareness on GST, and may change people perceptions and reception of it, be it positive or negative. 1.0 Introduction In general, Goods and Services Tax (GST) is a consumption tax which is imposed on the sale of goods and services, and it is divided into two categories indirect taxes and direct taxes and is administered by the Royal Malaysian Custom (RMC). The Malaysian government has announced that the new system which will be implemented starting 1st April 2015 at the rate of 6% (Robinson, 2014). The GST (goods and services tax) system will be replacing the present SST (sales and services tax). In the current tax regime, the 10% Sales Tax and 6% Service Tax is collected by one party (usually the seller) and passed......

Words: 3240 - Pages: 13

Premium Essay

Gst in Malaysia

...Goods And Services Tax (GST) is a broad-based consumption tax. It is an indirect tax which a person pays when he spends money. It is a multistaged value added tax, which means tax is charged on every supply of taxable goods and services at all levels in the supply chain i.e. production, manufacturing, wholesale and retail. More than 120 countries have already implemented GST which is paid by customers when they purchase goods and services are more sophisticated than the tax on retail sale. Even though GST is charged at each level of the supply chain, each business in the supply chain will charge tax only for the value he adds to the product in the supply chain. It will not become part of cost of the product as GST paid on business inputs is a tax credit claimable by registered business. The main issues concerning about the implementation of GST is the costs of the goods will increase which will burden the people in the country. Although the government claim that the implementation of GST will not hurt the businesses and people as the tax paid on the inputs at the previous stage is claimable or deductible, overall the the cost of goods will still increase as the producers-pass the full value added to the end consumers at the final stage. Consequently, there might have inflation effect since the GST is applied to the prices of all goods, at every stages which result in inflation as the general products prices may go up and the hyperinflation might occur from the continuously...

Words: 864 - Pages: 4

Premium Essay

Sme Towards Implementation of Gst

...Enterprises towards Implementation of GST in Kuala Lumpur and Johor Bahru CHAPTER ONE – INTRODUCTION 1.1 Background of the Study The production of a good or service, in general, goes through several stages before the final product or service reaches the consumer. To illustrate, if the production and distribution process is divided into three basic stages of manufacturing, wholesaling and retailing, value is added at each stage through further processing, packing or other improvements before it reaches the consumer via the retailer. The GST is a tax on the value added to the output or service at each stage of the process. In its generic form, the GST is a value-added tax (VAT). These terms are used interchangeably in this note. A multi-stage tax like the GST protects tax collections through two built-in features. First, the multi-point collection and invoice trail minimizes tax avoidance and tax evasion. This is because the need to issue and obtain invoices to claim tax deductions for taxes imbedded in inputs from a previous stage of the production chain fosters greater compliance. Second, the GST is better able to protect revenue from tax evasion by retailers as compared to a single-stage sales tax imposed solely at the retail sales tax (RST). This feature, however, comes with greater administrative and compliance costs. 1.2 Problem Statement The introduction of GST in......

Words: 5991 - Pages: 24

Free Essay

Gst Summary

...Services Tax (GST) Royal Malaysian Customs Department (2013) state that the government does implement the GST is because the existing consumption sales tax is unsatisfactory. There are also a reduction in the rate other taxes is sought. The existing tax system has not kept pace with the development of the economy. This is because they want to avoid tax cascading, multiple taxation and transfer pricing bias (Ministry of Finance Malaysia, 2014). Next, when they want to enhance tax compliance as well as to reduce tax avoidance and tax evasion, they have to avoid the issue of transfer pricing and value shifting. Then, they want to implement self-policing, lessen the bureaucratic red tape(Ministry of Finance Malaysia, 2014). Moreover, they want to lower the administrative cost and to enhance Malaysia’s competitiveness and to improve efficiency, Prices of Malaysian exports will become more competitive on the global stage as no GST is imposed on exported goods and services, while GST incurred on inputs can be recovered along the supplies chain. This will strengthen our export industry, helping the country progress even further (Ministry of Finance Malaysia, 2014). Thus, the GST will enhance the capability, effectiveness and transparency of tax administration and management. In addition, it will help the government find new sources of revenue. Malaysia Goods and Services Tax (GST) Royal Malaysian Customs Department 2013, Why GST?, Malaysia Goods and Services Tax (GST)......

Words: 262 - Pages: 2

Premium Essay

Tax Analysis for Gst

...5wefqwefqwefqwefqwefqwefqwef Appendix 19qwefqwefqefqefqwefefwefweqfwefwqefwef 1. INTRODUCTION The Goods and Services Tax (GST) can be defined as a value-added tax that is levied on most goods and services sold for domestic consumption. The tax is implemented to provide revenue for the federal government. In Malaysia, the GST was scheduled to be implemented during the third quarter of 2011 but the implementation was delayed until the 1 st of April 2015. The Goods and Services Tax was tabled for the first time at the ‘Dewan Rakyat’ on 16 th of December 2009. Since there is a high number of criticism, it was delayed. On 25 th of October 2013, during the government’s reading of the National Budget 2014, the Malaysian Prime Minister, Dato’ Sri Najib Razak announced a GST tax of 6% will be implemented starting on the 1 st of April 2015 to replace the Sales and the Services tax. The implementation of the GST is a part of the government’s tax reform program to enhance the capability, effectiveness and transparency of tax administration and management. Since the government’s reading regarding GST in the National Budget 2014, there are a lot of reactions by Malaysians. Many of them were unhappy with the news and some of them are happy with the announcement of GST. Each party has their own thoughts and opinion in regards to the government’s implementation. In this report, we will present to you our findings for our study regarding the Goods and Services......

Words: 4702 - Pages: 19

Premium Essay

Level of Acceptance on Gst in Malaysia

...implement the Goods and Services (GST) tax system by middle year of 2011 and therefore, will replace the present tax system which is known as Sales and Service tax (SST). It was first announced by the previous Prime Minister, Datuk Seri Abdullah Ahmad Badawi in 2005. The primary objective of the government in replacing the previous SST system with GST is for the economy development and also to generate more revenue for the country since Malaysia is facing a bad budget deficit. Goods and Services tax is being practiced by more than 140 countries worldwide which most of the countries that are practicing it are the developing countries including our neighbors, Singapore and Thailand. However, there has been much protest, notably from the people against this new tax system. Throughout the research, it will determine on the people’s thought regarding the GST system and why are they against it. A brief explanation about GST system will be given first, in terms of the meaning and the workflow of the system as a way in conformity with their raw perception about the system before they understand it. This research will use the citizen of Malaysia as the sample. 1.2. Introduction The Goods and Services (GST) is not a new kind of taxation system. Based on the history, the first country to ever practice GST system was France in between the year 1948-1959. In the latest 2011 Malaysia Budget, the government had set to implement the new system of tax(GST), to replace the Sales and......

Words: 3047 - Pages: 13