How to Avoid Costly GST Errors

How to avoid costly GST errors?

Introduction

This guide will help you to easily identify the common GST errors in GST Returns. To minimize GST amendment and incorrect GST Returns to RMCD.

You may wish to take note the follow errors commonly made by businesses:

1. Standard Rated Supply (5a) and Output Tax (5b)

2. Stanadard Rate and Flat Rate Acquisitions (6a), and Input Tax (6b)

3. Carry forward refund for GST?

4. Local Zero-Rated Supplies

5. Export Supplies

6. Exempt Supplies

7. Supplies Granted GST Relief

8. Goods Imported Under Approved Trader Scheme and GST Suspended

9. Capital Goods Acquired

10. Bad Debt Relief

11. Bad Debt Recovered

12. Output tax value breakdown into Major Industries Code (MSIC Code)

13. Other important info required in GAF

Standard Rated Supply (5a) and Output Tax (5b)

1. Sale or disposal of business assets

2. Goods given free as gift.

3. Inter-company transations

Stanadard Rate and Flat Rate Acquisitions (6a), and Input Tax (6b)

Not all input tax claims are allowable. You can claim input tax on your purchases only if the below conditions are fulfilled.

1. Tax invoice / Simplified Tax Invoice / Custom K1 / Custom K9

a. the buyer can use simplified tax invoice if the total amount GST payable is RM30 or less.

b. if the total amount of GST payable is more than RM30, the buyer must request for a tax invoice with the name and address of the buyer.

c. tax invoice issued by approved person for Flat Rate Scheme.

d. K1 form for imported goods

e. K1 and K9 for goods removed from bonded warehouse

2. Supplies made outside Malaysia which would be taxable supplies if made in Malaysia.

3 disregarded supplies (supplies within group, supplies made in warehouse, supplies between venture operator and venturers and supplies between toll manufacturer and overseas principal).

4. Directly attributable to taxable supplies (ie. standard rated supplies and zero rated supplies)

5. Must not be disallowed expenses (or known as Blocked Input Tax).

a. Passenger motor cars (not more than 9 passengers including driver and unladen weight does not exceed 3,000 kg) including hiring of car

b. Repair and maintenance for motor cars

c. Family benefits

d. Club subscription fee

e. Medical and personal accident insurance

f. Medical expenses

g. Entertainment expenses for potential customer or others than employees.

6. Must be taxable purchases (ie. purchases made from GST registered suppliers)

Exempt Supplies

This refer to the following types according to Goods and Services Tax (Exempt Supplies) Order 2014:-

1. Services:-

a. Private education

b. Private health services

c. Childcare services

d. Domestic transportation of passengers for mass Public Transports (eg. by rail, ship, boat, ferry, express bus, stage bus, school bus, feeder bus, workers bus and taxi)

e. Toll highway

2. Financial Services:-

a. Interest income from deposits placed with a financial institution in Malaysia

b. Interest received from loans provided to employees (factoring receivables)

c. Realized foreign exchange gains.

3. Goods:-

a. Residential properties

b. Land for agricultural use

c. Land for general user (ie. burial ground, playground or religious building)

GST Listing

1. After GST Return processed, go to Print GST Listing....

2. Preview and select the report name GST Detail 2.

3. To ensure the document detail descriptions are clearly stated and map to the correct tax code.

GST-03

1. To quick do amendment before submit the GST-03 to RMCD. Click here to learn more about the GST amendment.

2. Double click on the item 12 in GST-03.

3. Drill down the documents to open and correct it accordingly.

4. Lastly, you have to Recalculate the amended GST Return.

See also

• Print GST Listing
• Print GST-03