GST GUIDELINES ON TOURIST REFUND SCHEME

1. Introduction

This Industry Guide is prepared to assist you in understanding the Goods and Services Tax (GST) and the related Tourist Refund Scheme (TRS). This guide will explain to you:

·         As a tourist visiting Malaysia, how to claim a refund of GST paid on eligible goods purchased from an Approved Outlet 

·         As a business, the conditions and eligibility requirements to become an Approved Outlet

2. Overview of Goods and Services Tax (GST)

GST is a multi-stage tax on domestic consumption. GST is charged on all taxable supplies of goods and services in Malaysia except those specifically exempted. GST is also charged on the importation of goods and services into Malaysia.

Payment of GST is made in stages by the intermediaries in the production and distribution process. Although the tax is paid throughout the production and distribution chain, it is ultimately passed on to the final consumer. Therefore, the tax itself is not a cost to the intermediaries and does not appear as an expense item in their financial statements.

In Malaysia, a person who is registered under the Goods and Services Tax Act 2014 is known as a GST registered person. A GST registered person is required to charge output tax on his taxable supply of goods and services made to his customers. He is allowed to claim input tax credit on any GST incurred on his purchases which are inputs to his business. Thus, this mechanism would avoid double taxation and only the value added at each stage is taxed.

3. Overview Of Tourist Refund Scheme (TRS)

Common features and the main key players under the TRS are:

·         TRS is a scheme that allows tourists to claim GST paid on eligible goods purchased from an Approved Outlet in Malaysia. The tourist can then claim a GST refund from an Approved Refund Agent when the tourist leaves Malaysia by air mode from one of the Approved Malaysian Airports.

·         Tourists classified under the TRS are foreign tourists who are eligible to claim GST refunds and who hold a valid international passport. 

·         An Approved Refund Agent is an agent appointed by the Malaysian Government through tender, who processes and refunds GST refund claims made by outbound tourists.

·         The Approved Refund Agent may charge an administrative fee for processing the GST refund. Any fee chargeable will be made known to the tourist when they purchase eligible goods from an Approved Outlet. The GST treatment on services of the Approved Refund Agent are zero rated because the services are considered as export services.

·         The Approved Refund Agent will then recover refunds made and fee charged to tourists under TRS from the Royal Malaysian Customs Department (RMCD).

·         An Approved Outlets are retailers who are GST registered persons, approved by RMCD and selling standard rated eligible goods to tourists.

·         All Approved Outlets are required to display TRS logo/ signage at their outlets. These logo/ signage will be provided by the Approved Refund Agent. When in doubt, tourist should check with Approved Outlet whether it is participating in the TRS or otherwise.

4. Conditions For Refund Of GST Under Tourist Refund Scheme

A tourist shall be entitled to the refund of GST under the TRS if s/he satisfies the following conditions:

·         S/he is neither a citizen nor a permanent resident of Malaysia, not less than eighteen years of age and holds a valid international passport.

·         S/he is a foreign diplomat leaving the country after completion of service in Malaysia and is in possession of a document from the relevant diplomatic or consular mission stating that s/he is departing from Malaysia.

·         S/he is not a member of the cabin crew of the aircraft on which s/he is departing out of Malaysia.

·         S/he departs Malaysia by means of air transportation from one of the Approved Malaysian Airports.

·         S/he must have purchased the eligible goods within 3 months prior to the date of departure.

·         S/he is not nor has been employed in Malaysia at any time in the 3 months preceding the date of purchase of the eligible goods.

·         S/he must spend at least three-hundred Malaysian Ringgit (RM300) (GST inclusive) at the same Approved Outlet. Accumulation of purchases is allowed if purchases are made from the same Approved Outlet on different days.

·         S/he must take the eligible goods out of Malaysia to another country as accompanied (hand carried) or unaccompanied (checked-in) luggage.

5. Goods Not Eligible For GST Refund Under The Tourist Refund Scheme

You may claim refund on the GST charged and paid on goods purchased from an Approved Outlet, except for the following:

·         Precious metal and gem stones

·         Goods which are wholly or partially consumed in Malaysia (except for clothing, tax invoices to be maintained)

·         Goods which are absolutely prohibited from export under any written law

·         Goods which are not taken out as accompanied (hand carried) or unaccompanied (checked-in) luggage

6. Approved Malaysian Airports Under The Tourist Refund Scheme

Claim of GST refund under TRS can be made at the following airports:

·         Senai International Airport, Johor

·         Kota Kinabalu International Airport, Sabah

·         Kuching International Airport, Sarawak

·         Kuala Lumpur International Airport, Sepang, Selangor

·         Kuala Lumpur International Airport 2, Sepang, Selangor

·         Penang International Airport, Penang

·         Sultan Haji Ahmad Shah Airport, Kuantan, Pahang

·         Sultan Abdul Aziz Shah Airport, Subang, Selangor

·         Langkawi International Airport, Kedah

7. Manner/ Procedure For Claiming A GST Refund By A Tourist At An Approved Outlet

A tourist claiming a GST refund under the TRS must comply with the following requirements at the time of purchase of the eligible goods at the Approved Outlet:

·         Show the tourist’s own original valid international passport to the sales assistant/ cashier at the Approved Outlet to prove eligibility for a GST refund under the TRS.

·         Get an original tax invoice for the eligible goods purchased.

·         Get an original GST refund form from the sales assistant/ cashier at the Approved Outlet and ensure that the refund form is completed correctly. The GST refund form should contain the following particulars:

o    Tourist’s name

o    Tourist’s international passport number

o    Tourist’s country of residence

o    Date of arrival in Malaysia

o    Intended date of departure from Malaysia

o    Date of purchase of the eligible goods

o    Tax invoice for the eligible goods

o    Description and quantity of the eligible goods purchased

o    The total amount paid for the eligible goods, inclusive of GST;

o    The total amount of GST refundable;

o    The amount of the administrative fee charged by the Approved Refund Agent; and

o    The net amount of GST refundable to the tourist.

·         The tourist must keep the original copy of the tax invoice and the completed original GST refund form and produce these documents together with the purchased goods to the Proper Officer of Customs (at the GST Refund Verification Counter) at the airport prior to departure.

·         The tourist can only receive a GST refund form from the Approved Outlet where the eligible goods have been bought. A GST refund form cannot be issued by RMCD at the airport.

8. Manner/ Procedure For Claiming GST Refund At Approved Malaysian Airport

The GST Refund Verification Counters are located at the landside (before checking in) and airside (after immigration control) of the Approved Malaysian Airports.

Tourists leaving the country are required to present the following goods and documents to the Proper Officer of Customs for verification and endorsement at the GST Refund Verification Counters together with –

·         Goods purchased at the Approved Outlets (if jewellery in sealed security bag);

·         Original tax invoice issued by Approved Outlets;

·         Completed GST refund form or transaction slip or contingency form (during contingency period only);

·         Tourist’s international passport; and

·         Boarding pass or confirmed air ticket (as proof of departure).

If the tourists are carrying: 

·         Unaccompanied (checked in) luggage - tourists are required to declare bulky items or goods that have packed into their luggage together with relevant documents (GST refund form, original tax invoice, international passport and boarding pass or confirmed air ticket) at the GST Refund Verification Counter located at the landside of the Approved Malaysian Airport. The GST refund form must be validated/ endorsed by RMCD before the goods are checked in as unaccompanied luggage. 

·         Accompanied (hand carried) luggage - tourists are required to present the goods with relevant documents (GST refund form, original tax invoice, international passport and boarding pass or confirmed air ticket) at the GST Refund Verification Counter located at the landside or airside of the Approved Malaysian Airport. Tourists who have hand carried luggage which do not meet the allowable airline size and weight limits are allowed to take the goods out and check in the goods as unaccompanied luggage.

If the RMCD Officer is satisfied that all conditions for validation of the GST refund have been met, the RMCD officer will endorse and return the original GST refund form to the tourist. After the original GST refund form has been endorsed/ verified by the RMCD Officer, the tourist shall not part with the possession of the goods or give them to another person, except to the counter staff for checking in. The goods shall not be brought out of the premises of the Approved Malaysian Airport unless otherwise approved by the Senior Officer of RMCD due to some unavoidable circumstances.

The tourist may then:

·         Proceed to the Approved Refund Agent’s Counter to obtain the GST refund. The Approved Refund Agent’s counter will be located either landside or airside, or both, at each of the Approved Malaysian Airport; or

·         Drop the validated original GST refund form in the TRS mail box located near to the Approved Refund Agent’s counter/ GST Refund Verification Counter at the airside before departing from Malaysia by air mode. GST refund form sent by ordinary post or dropped in the TRS mailbox must reach the Approved Refund Agent in time for processing before the limit of two months from RMCD’s endorsement has expired.

The refund must be made by the following mode of payment:

·         In cash up to three-hundred Malaysian Ringgit (RM300);

·         To a credit card account; or

·         Through a bank cheque if neither of the previous refund options is feasible.

Cash refund is only applicable for total refund amount of RM300 or below.

Further information regarding the location of the Approved Refund Agent’s counter at the Approved Malaysian Airports is available in this webpage - http://www.globalblue.com/tax-free-shopping/malaysia/#refund-points

9. Conditions And Eligibility Of Approved Outlet Under Tourist Refund Scheme

To participate in the Tourist Refund Scheme in Malaysia, a merchant must:-

·         Be registered for GST under section 20 of the GST Act 2014 and hold a valid GST registration number;

·         Be approved by the RMCD to participate in the scheme;

·         Be affiliated by the Approved Refund Agent;

·         Be equipped by the Approved Refund Agent with the solution to issue TRS transactions to eligible tourists;

·         Provide a GST refund form to eligible tourists who wish to claim refund of GST under TRS using the solutions provided by the Approved Refund Agent;

·         Account for tax on a monthly taxable period;

·         Sell eligible goods;

·         Not wholly sell precious metal and gem stones;

·         Charge GST at standard rate on taxable goods sold to tourists;

·         Issue tax invoices which indicate the cost of the goods as well as the amount of GST charged.

10. Appointment of Approved Outlet

To be appointed as Approved Outlets, a merchant will have to undergo the following procedure:

·         Merchant/ Outlet

- Register Outlet Details via Iris Global Blue’s (IGB) TRS Outlet Registration Portal.

·         IGB’s TRS Outlet Registration Portal/ IGB sales staff

- Capture outlet details and send to GenTax Portal for approval. If outlet approved, IGB will install and activate issuing solution at outlet.

·         GenTax Portal/ RMCD

- Review outlet details and process applications. Send approve/ reject response to IGB’s TRS Outlet Registration Portal.

Further information regarding TRS Outlet Registration and approval process is available in this webpage - 
http://business.globalblue.com/my_en/

For registration of outlets/ merchants to become Approved Outlet under Tourist Refund Scheme, please use the following link 
https://iris-globalblue.com/register-trs-outlet/

11. Mechanism For Jewellery/ Article of Jewellery Under TRS

In addition to the standard requirements for GST refund, verification of jewellery have to adhere to the following guidelines:

·         All Approved Outlets selling jewellery will have to obtain the Customs approved security bag with serial number from the Federation of Goldsmiths and Jewellers Association of Malaysia (FGJAM);

·         The original tax invoice and jewellery has to be sealed within the security bag upon purchase;

·         The sealed bag cannot be damaged or tampered in any way before Customs verification at the Approved Airports;

·         Upon verification at the Approved Airports, the Proper Officer of Customs will inspect the sealed security bag and reserves the right to unseal the bag for weighing and confirming the density of the jewellery.

GST refund claims on jewellery will only be validated at the GST Refund Verification Counter located at the airside of the Approved Malaysian Airports.

General information on jewellery are as follows:

Jewellery (i.e. costume jewellery) that does not fall under the criteria above does not need to be sealed.