Section 4 – Non-Allowable Input Tax, Bad Debts Relief, Record Keeping and Offences & Penalties

(< Section 3 – Taxable Supplies, Value of Supply & Time of Supply)

NON ALLOWABLE INPUT TAX

While is general, input tax is claimable under Standard and Zero-rated supplies, there are certain instances where Input Taxes are blocked, ie. not claimable. They are the followings:-

  • Purchase and/hire of passenger cars
  • Benefits given to family members of employees
  • Club fees (joining or subscription) for recreational/sporting purposes
  • Medical and personal accident insurance
  • Entertaining family members and potential clients

This list is not exhaustive.

BAD DEBTS RELIEF

Bad debt relief is given to the Taxable Person in situation where no payment was received after 6 months from Date of Supply. This relief is allowed on condition that GST has been paid and sufficient efforts have been made to recover the debt.

RECORD KEEPING

Records must be kept in the principal place of business for at least 7 years, either in soft or hard copy, and they must be either in Bahasa Malaysia or English.

OFFENCES & PENALTIES

Late Registration

  • Within 30 days – Minimum RM1,500
  • Exceeding 360 days – Maximum RM20,000

Incorrect Returns

  • Maximum RM50,000 per offence
    (with potential RM600,000 payable on penalties per year)

Transactional Offences

  • Maximum RM30,000 per offence

Late Payment

  • Maximum 20% on any tax outstanding

We hope you have been informed and aware on Malaysia’s implementation of GST in 2015. If you’d like to read other sections of this article, please click on the Post Gazette GST Awareness article.

Important Notice: KLM’s personnel and accounting software are GST ready, and we are able to prepare the accounting and recording of entries into the accounting system. However, we DO NOT provide GST advisory on your business transactions. We suggest that you seek advice directly from GST advisors licensed by the Royal Malaysian Customs Department.