GST Tax Codes in Malaysia are defined as recommended code listings in order to allow proper classification of different purchase and supply transactions and these codes are based on common scenarios that are commonly encountered by GST registered companies in Malaysia. The GST Tax Codes for purchase are as the following.
TX 6% is a GST Tax Code that refers to the goods and services that are purchased from GST registered suppliers. The GST rate for this GST Tax Code is 6% and it is effective from 1st of May 2015. As this GST Tax Code is based on final consumption, the GST registered company will be able to claim the credits for the GST paid on goods and services supplied to them. The company is then able to make use of it as a working capital in order to expand its business. These recoverable credits are known as input tax. Some of the examples of this GST Tax Code include goods and services that are purchased solely for business purposes from GST registered traders and suppliers, imported services and etc.
TX-CG is a GST Tax Code that refers to all of the acquired capital goods that are claimable regardless of the goods total value. The GST rate for this GST Tax Code is 6%. The GST registrant who is claiming the capital goods first has to declare the value of the total claimed capital goods under field 6a and 6b and field 16 in the GST-03 return. Some examples of this GST Tax Code include land, buildings, equipment, machineries, vehicles and any other capital goods that are acquired which the GST registered company claims for input tax and to also capitalize the capital goods as their assets.
TX-ES is a GST Tax Code that refers to GST registered traders that make both taxable and exempt supplies. This GST Tax is usually used in business transactions that involve the payment of input tax that is directly attributed to the making of non-incidental exempt supplies. TX-ES is only to be included in the field 6a and 6b in the GST-03 form return after the de minimis rule has been fulfilled. One of the examples of this GST Tax Code is based on a purchase of wallpaper by a GST registered company for the owner’s residential apartment. However, this apartment has been rented to others and the purchase costs have also been included in the GST. In this case, the owner is no longer eligible to claim the amount of input tax as that tax has been directly applied to make the exempt supply which is the rental of the residential apartment.
TX-IES is a GST Tax Code that refers to business transactions that involve the payment of input tax that is attributed to the incidental exempt financial supplies as an input tax that is attributed to the taxable supplies. In short, this means the GST registered individual is entitled to claim any input tax that is attributed to the making of incidental exempt financial supplies. Some of the examples of this GST Tax Code include a purchase of security box for the account clerk to deposit the daily earnings of the GST registered company in a bank, hiring the services of security firm to transfer and deposit the money into banks and financial institutions safely and securely, the selling of lots of shares by using a remisier and the GST is charged on the commission of the remisier, incurred GST on the legal agreements and all of the other expenses that are related to financial loans. TX-IES was created to replace the former TX-E43 code.
IM is a GST Tax Code that refers to all the goods that are imported into Malaysia and subjected to GST. In this GST Tax Code, the amount is calculated based on the value which includes the costs, insurance, freight charges and customs duty that is payable and the customs duty is based on import declaration forms such as Customs Form No. 1 K1 and other reference documents. This GST Tax Code is applicable to all GST registrants unless the registrants intend to use the imported goods for storage and it is stored in licensed warehouses, Free Trade Zone or it is imported by a GST registrant who is a person that is approved under special schemes such as Approved Trader Scheme or Warehouse Scheme.
IS refers to the total value of imported goods under the Approved Trader Scheme (ATS) where the GST will be suspended when the GST registered trader imports the goods into Malaysia. IS GST Tax Code is designed to ease the cash flow of the Trader Scheme approved person that has a lot of imports. That approved person must declare the total value of goods that are imported and suspended GST amount under the ATS field 14 and 15 in the GST-03 return.
BL is a GST Tax Code that refers to GST that is incurred by a business but that GST registered company is not allowed to claim the input tax as prescribed in the Regulation 36 Disallowance of Input Tax, GST Regulations 2014. Examples of this GST Tax Code include supply to or import of a passenger car and the supply of good and services that are related to maintenance, refurbishment and repair of the passenger car.
NR is a GST Tax Code that refers to the goods and services that are purchased from non-GST registered companies. The supplier or trader of this non-GST registered company is not allowed to collect and charge GST.
NR is a GST Tax Code that refers to the goods and services that are purchased from GST registered companies and the GST is charged at 0% or zero-rated. This GST Tax Code is also commonly known as zero-rated purchases. There is a list of zero-rated purchases prescribed in the GST Zero-Rated Supply Order 2014.
OP is a GST Tax Code that refers to the goods and services that are purchased and classified as outside the scope of GST. Some examples of this GST Tax Code include out of scope purchase such as non-business purchase, purchase from the government suppliers except for selected government suppliers as prescribed in the GST Application to Government Order 2014, purchase of goods and services made a person who is not a Malaysian citizen and the purchase of goods that are made for a supply outside of Malaysia.
RP is a GST Tax Code that refers to the transactions purchase that are disregarded from charging and payment of the GST under the GST legislation. Some of the examples of this GST Tax Code include purchases done within the GST group registration, disregarded supplies and purchases that are made within a Warehouse Scheme.
RP is a GST Tax Code that refers the purchased goods and services that are given relief from payment and charging of GST. Some of the examples of this GST Tax Code include the purchase of RON95 petrol diesel and other relief supplies that are prescribed under GST Relief Order 2014.
AJP is a GST Tax Code that refers to any adjustments made to the Input Tax such as bad debt relief, longer period adjustment and partial exemption adjustments. For example, a GST registrant that are claiming for Bad Debt Relief has to declare the value of this Bad Debt Relief under field 6b and 17 in the GST-03 return. Kindly refer to Appendix 5 for more specific details on partial adjustments. Please also note that this GST Tax Code is not applicable for debit or credit note.
For more information of the above GST Tax Codes, please refer to GST Legislations.