The first step to being GST-ready is to register for a GST identification
number. You need to check whether you are required to register or whether you
want to register voluntarily.
Persons having businesses with annual sales turnover exceeding RM500,000 are
liable to be registered under GST. Persons include an individual, sole
proprietor, partnership, company, trust, estate, society, union, club,
association or any other organization including a government department or a
local authority which is involved in the business of making taxable supplies in
Malaysia.
The annual sales turnover can be determined based on either:
- The total value of taxable supplies of the current month and the
previous 11 months, or
- The total value of taxable supplies of the current month and the next 11
months.
You also need to decide on the type of registration best for your business:
- Voluntary Registration
- Group Registration
- Divisional/Branch Registration
Deregistration
You must apply for deregistration of your business within 30 days from the
date of the following circumstances when:
- Your business has ceased
- No longer fulfill the requirements of registration
Voluntary Registration
- Any person making a taxable supply and having an annual sales turnover
RM500,000 and below is not required to be registered. However, you may
voluntarily apply for registration. Voluntary registration is allowable but
must remain in the system for at least 2 years.
- Once registered, you are required to charge and collect GST on the
taxable supplies and at the same time are entitled to claim input tax credit
and eligible to enjoy all facilities provided under the law.
Group Registration
Group registration is a facility that allows several companies to group and
centralize their administration for the GST accounting purpose. Each company
must be registered individually before they can be grouped as a single
registered person and each company must be making wholly taxable supply.
Requirements for Group Registration
- Companies are eligible for group registration if one company controls
another company. One company is taken to control another company if the
first mentioned company holds directly, indirectly through subsidiaries or
together directly or indirectly through subsidiaries more than 50% of the
issued share capital of the second mentioned company.
- One of the members has to be nominated by the group as the
representative member of the group.
- Any taxable supply made by or to a member of the group shall be
treated as a supply by or to the representative member.
- Supplies between group members would be disregarded as a supply.
- Each member of the group is required to keep proper records as they are
jointly and severally liable.
Divisional/Branch Registration
A taxable person who is carrying on its business in several divisions or
branches upon request and subject to stipulated terms and conditions can be
registered in the names of those divisions/branches. This is a facility for any
taxable person with a number of self accounting units to register each unit
separately for GST.
Each division/branch will be given a separate GST identification number and
make its own returns. However, the taxable person remains accountable for all
GST liability of all divisions/branches.