Introduction

The Royal Malaysian Customs Department (“Customs”) recently issued a Goods and Services Tax (“GST”) Relief by the Minister of Finance 1/2017 (“Relief 1/2017”) granting suppliers a relief from the obligation to charge GST on certain types of supplies which are made directly in connection with exported goods, subject to certain prescribed conditions.

The Relief 1/2017, which was made pursuant to Section 56(3)(b) of the Goods and Services Tax Act 2014, came into effect on 1 July 2017.

Types of Supplies Granted GST Relief

The supplies which are granted GST relief under the Relief 1/2017 are categorised under four broad groups. These four groups of supplies are summarised in the table below:

Prescribed Conditions of the GST Relief

The prescribed conditions of the GST relief, as set out in the Relief 1/2017, include:

(a) Recipient of the supply must be an overseas customer

The supply must be made to an overseas customer wholly in his business capacity and who:

1) belongs in a country other than Malaysia;

2) is outside Malaysia at the time the services are performed; and

3) does not have a fixed establishment in Malaysia including a branch or an agency through which the overseas customer carries on a business in Malaysia.

(b) Approval of the Director General of Customs (“DG”)

A supplier in respect of a supply under Group 2 or 3 is required to apply for the DG’s approval by way of a written application in order for the supply to be relieved from GST.

(c) Export of the relevant goods

The goods in respect of which the supply of services is made must be exported in order to be eligible for the relief.

1) For supplies under Groups 1, 2, and 3, the goods must be exported within 60 days from the date of completion of the services to qualify for GST relief. Additionally, a written confirmation from the overseas customer to the supplier stating that the goods are to be exported within the 60 days period is required.

2) For supplies under Group 4, the tools or machines must be exported after the manufacturing process.
With regards to Group 1 specifically, if the goods are sent by the supplier to a third party in Malaysia for other services, the services supplied by the supplier would be subject to GST, unless the goods are subsequently exported by the third party within 60 days from the date of completion of the services by the third party or any other approved period.

(d) Record keeping requirements

To qualify for GST relief, the supplier is also required to keep and maintain certain documentations, for example:

1) the purchase order issued by the overseas customer to the supplier or the relevant contract between the supplier and the overseas customer;

2) the tax invoice issued by the supplier to the overseas customer in respect of the services;

3) the proof of payment of the services made by the overseas customer to the supplier; and

4) the relevant export documents, such as the Customs Prescribed Form K2 / Form K8 or the Free Zone Prescribed Form ZB1.
Impact to Businesses

In light of the Relief 1/2017, it would be timely for GST-registered businesses that make supplies which are directly in connection with exported goods to undertake a review to determine if their supplies would fall under the scope of this new GST relief and if it would be reasonably practical for the business to comply with all prescribed conditions of the relief. If so, it would be prudent to exercise care in ensuring that all the relevant conditions are complied with in order to enjoy the GST relief under the Relief 1/2017 and that the transactions are reported correctly in the GST returns.

Charis Hospice is a non-profit organization that provides free palliative home care services for patients with cancer and other advanced critical illnesses in Penang Island, irrespective of race and religion. Boston Scientific supported the Charis Hospice Charity Hunt 2017, sponsoring t-shirts, donating funds and entering 11 BSC teams.

Tenaganita Luau

Tenaganita is a Malaysian human rights organisation dedicated to assisting, building, advocating and protecting migrants, refugees, women and children from exploitation, abuse, discrimination, slavery and human trafficking. They seek to promote and protect the rights of marginalised and vulnerable individuals who have no voice in this globalised world.

P&G Malaysia kicked off their 30th Anniversary Celebration with a series of exciting activities for employees and external stakeholders. All the activities centered around giving back and improving the lives of various communities in need.

Firstly, the 30th Anniversary celebration was kicked off internally with a special ‘Food Truck’ lunch for employees and 400 workers in the office building, who were treated with an assortment of pasta, burgers and fries in return for donating books to the “P&G Light Bulb Project”. The project is aimed at raising money and compiling books to build libraries for Orang Asli children, in partnership with The Budimas Charitable Foundation, an NGO that supports the welfare and the well-being of orphans and underprivileged children in Malaysia. A total of about 2,000 books have been collected and RM40,000 have been raised so far!

The celebration continued with a special 30th Anniversary Celebration Dinner for employees and their spouse/partners, together with 50 members of P&G Malaysia’s alumni (including some of the ‘pioneers from 1987), distributors, as well as media, business & trade partners. Themed “Colors of Malaysia”, the dinner was made even more special with the presence of the Guest of Honor – the new US Ambassador to Malaysia, Ambassador Kamala Shirin Lakhdhir.

That’s not all – just a few days after the fun & festivities, there was a media launch of “Daripada Ibu, Kepada Ibu” (“From Mothers to Mothers”), a nationwide campaign in conjunction with the 30th Anniversary that encourages Malaysians to help ease the burden of single mothers during the Muslim holy month of Ramadhan by making donations of non-perishable goods.

Together with well-loved Malaysian actress and television host, Izreen Azminda and Food Aid Foundation, the campaign takes place from 15th of May to 30th of June at 50 participating outlets of all major retail stores throughout the country. Customers who purchase RM30 or more worth of P&G products will be entitled to receive a ‘Beg Hati’ (‘Heart Bag’). They are then encouraged to fill that bag or any other bag with non-perishable items such as canned or dried food, cooking oil or detergent and drop them off at collection boxes placed at the selected participating outlets. Food Aid Foundation will collect the items at the end of the campaign and distribute them to single mothers across Malaysia.

P&G Malaysia is committed to touching, improving and enriching the lives of ALL Malaysians, especially the underserved communities. As part of the 30th Anniversary campaign, in addition to Orang Asli children and single mothers, P&G Malaysia will also help flood victims and Malaysians with no access to clean drinking water via the Children’s Safe Drinking Water initiative.

In April 2017, Coca-Cola partnered with MDTCC (Business Development Division) to conduct Coca-Cola KU program in 14 public university campuses nationwide throughout the year. The Official launch was by YB Dato’ Seri Hamzah Zainudin, Minister MDTCC in MDTCC Headquarters in Putrajaya with attendance of senior government officials from MDTCC and members of the public – gained PR value of over RM400,000 from all media coverage

The ‘Komuniti Usahawan Coca-Cola’ or Coca-Cola KU program is Coca-Cola’s 5by20 program in Malaysia which provides local retailers with access to vital training and supports to help them grow their business and increase their profits. Coca-Cola KU is aimed at all Malaysian retailers (men and women), however they are particularly encouraging women retailers to join as part of their global 5by20 aim, specifically in Malaysia, they are targeting to reach 20,000 women entrepreneurs by 2020.