Registering for GST

A person has to apply for registration under the Goods and Services Tax (GST) Act 2014 if the following three criteria are met:

a) makes taxable supplies of goods and services in the course or furtherance of business;
b) carries out business in Malaysia; and
c) taxable turnover of the business within a 12-month period exceeding RM500,000.

A taxable person means any person who is registered under the GST Act 2014.  Persons include an individual, sole-proprietor, partnership, company, trustee, society, trade union, club and an association. Although the GST implementation date is 1 April 2015, GST registration commenced on 1 June 2014 and businesses are encouraged to use the Taxpayer Access Point located in the Royal Malaysian Customs Department website.  In the case of sole-proprietorships, registration is made in the name of the sole-proprietor. Registration for a partnership business is in the name of the firm.

It is important to register because of the following reasons:

i) A sale or supply is subject to GST only if the supplier is registered. 
ii) Input tax credits can be claimed only if the person is registered.  Hence, customers prefer to deal with registered businesses.

Taxable turnover

Taxable turnover is based on the total value of taxable supplies (which includes standard-rated and zero-rate supplies as well as deemed supply such as private use of business assets and business gifts that exceed RM500) for a 12-month period.  This taxable turnover, however, excludes the value of exempt supplies, out of scope supply, supplies of capital assets and supplies of imported services.  A supply made outside Malaysia is an example of out of scope supply.

If the threshold is below RM500,000, voluntary registration is possible at the discretion of the Director General of Customs.

Electronic or manual registration

GST registration can be executed electronically via the GST website or submitted manually. The relevant application form is GST-01. The information needed for submission includes the below:

a) business registration number provided by Securities Commission Malaysia;
b) identity card number of individual;
c) passport number (if not a Malaysian citizen); and
d) bank account number.

Manual registration can be done by downloading the GST application form from MyGST portal.

The last date for mandatory GST registration is 31 December 2014, that is, three months before implementation date, for businesses which exceeded the prescribed threshold of RM500,000. When a taxable person fails to apply for registration and does not submit a return, the Director General of Customs has the right to assess, to the best of his judgement, the amount of tax due and the penalty payable.

After the implementation of GST, businesses have to apply for registration within 28 days from the end of the month where turnover exceeds or is expected to exceed RM500,000.

Late registration

Late registration for GST purpose would result in a penalty being imposed by the Royal Customs Department and it ranges from RM1,500 to RM20,000.  A person who registers late for GST purposes will be required to submit the GST return according to the taxable period assigned to him i.e. monthly or quarterly. The commencement date of the first taxable period would be from the date the person should have been registered for GST.

Group registration

Group registration is a facility to allow related companies, excluding individuals, partnerships, affiliates or associated companies, to register as a group.  In a group registration, supplies between group members are disregarded, hence lowering compliance cost.