GST Treatment: Free Industrial Zone(FIZ) and Licensed Manufacturing Warehouse(LMW)

Free Industrial Zone(FIZ) and Licensed Manufacturing Warehouse(LMW)

Introduction

This guide will teach you the way to key-in the data entry related to GST treatment on FIZ and LMW.

Under GST system, a person operating in a FIZ or having LMW status is treated as any person carrying out a business in Malaysia where normal rules of GST apply. This means that acquisition of goods locally or imported by the person operating in a FIZ or having LMW status is subject to GST. However, the person operating in a FIZ or having LMW status is eligible to apply for Approved Trader Scheme (ATS) to allow the Director General to suspend the payment of GST on imported goods at the time of importation. For further details, please refer to the guide on Approved Trader Scheme (ATS) and SQL Accounting on ATS

Subject to GST:

1. Based on transaction value. GST = transaction value x (SR or ZR) %):

a. FIZ Local sell to FIZ Local → SR

b. FIZ local sell to LMW Local → SR

c. FIZ/LMW Local sell to Oversea → ZR

2. Based on the value of imported goods. GST = (Custom Value + Import Duty) x SR %:

a. FIZ/LMW local sell to non-FIZ/LMW → SR

For example (FIZ/LMW local sell to non-FIZ/LMW),

Item	Item Description	Qty	Unit Price (RM)	Value(RM)	Import Duty (RM)
1.	Shirts	300 pcs	25.00	7,500.00	1,500.00
2.	Paints	100 pcs	30.00	3,000.00	600.00
			Total	10,500.00	2,100.00

Assuming 20% import duty (RM10,500 x 20% = 2,100.00)

GST on value + Import Duty are subject to GST (SR) = (10,500.00 + 2,100.00) x 6% = 756.00

Therefore, the Tax Invoice will be presented as per below:

Item	Item Description	Qty	Unit Price (RM)	Value (RM)
1.	Shirt	300 pcs	25.00	7,500.00
2.	Paints	100 pcs	30.00	3,000.00
	GST (SR-6%)			756.00
	Total Amount Payable			11,256.00

How to enter the Tax Invoice if there is a FIZ/LMW transactions to another party?

[Sales | Invoice...]

According to the example mentioned in above.

1. Insert and select the stock items sold with empty tax code. Because the stock items are under FIZ/LMW control.

Item Code	Description	Qty	Unit Price	Subtotal	Tax Code	Tax Amount	SubTotal(Tax)
SHIRT	SHIRTS	300 pcs	25.00	7,500.00	<BLANK>	0.00	7,500.00
PAINTS	PAINTS	100 pcs	30.00	3,000.00	<BLANK>	0.00	3,000.00

2. Inser new row and enter the GST on total supply value (Rm7500 + Rm3000 = Rm10,500) direct into Taxable Amount column (C1)

Description	Taxable Amount	Tax Code	Tax Amount	SubTotal(Tax)
GST on value Rm10,500.00	10,500.00	SR	630.00	630.00

NOTE : 

A1 : Key-in "GST on value" into description.

B1 : Must select tax code.

C1 : Key-in the Total Supply Value into Taxable Amount.

3. Insert new row and enter the GST on total Import Duty (Rm1,500 + Rm600.00 = Rm2,100) direct into Taxable Amount column (C2)

Description	Taxable Amount	Tax Code	Tax Amount	SubTotal(Tax)
GST on Import Duty 20%	2,100.00	SR	126.00	126.00

NOTE : 

A2 : Key-in "GST on Import Duty" into description.

B2 : Must select tax code.

C2 : Key-in the Total Import Duty value into Taxable Amount.

GST Return

[ GST | New GST Return...]

1. Process GST Return for the month

2. Click on print GST-03

RESULTS : 

5a Total value of supplies = 12,600.00

5b total output tax = 756.00

See also

• GST Treatment: ATS