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Indirect Tax

In: Business and Management

Submitted By affs
Words 3349
Pages 14
Multimedia University
Bachelor of Accounting / Advanced Taxation BAC 4644 / Tutorial 1
Dr. Nakha Ratnam Somasundaram

Sales tax and service tax

Question 1
What do you understand by sales tax?

Answer 1
It is form of indirect tax imposed on consumers and collected by enterprises. It is accounted by the enterprises to the Royal Malaysian Customs and Excise Department.

Question 2
What is the scope of charge of the sales tax under the Sales tax Act of 1972 (as amended)?

Answer 2
Section 6 imposes the tax. Under that section, sales tax shall be charged and levied on all taxable goods: a) Manufactured in Malaysia or acquired under the provisions of section 9 by a taxable person and sold used or disposed of by him, otherwise than by sale or disposal to a licenses manufacturer authorized by the Director General to acquire such goods without payment of tax b) Imported into Malaysia by any person for home consumption

It is a single stage tax. A single stage tax means it is imposed only once. And it is imposed upon acquiring manufactured products from manufacturers or by Customs when the goods are imported from outside Malaysia into Malaysia.

At the manufacturing stage, the tax is imposed at the output level. The taxes are collected and paid over to the Customs by the manufacture. In the case of import the importer would pay the tax to the Customs.

However a manufacturer acquiring a product form another manufacturer for additional processing would not be liable for sales tax and where such taxes are paid, it could be recovered from the Customs for example by way of a credit using the ring system, refund system or drawback system.

Question 3
When is sales tax imposed and on whom?

Answer 3
Sales tax would be imposed on: a) The manufacturer upon sale, used or disposal of taxable goods in Malaysia; b)

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