According to the Sales Tax Act 2018, Section 35, the Minister has the authority to exempt sales tax. The sales tax exemption can be categorised into two groups such as exemption by order of the minister and specific exemption.
Based on Malaysia's Sales Tax Exemption Guidelines, there are three types of exemption allowed in the Purchase section such as persons exempted from the payment of Tax under Schedule A, Schedule B and Schedule C.
Read more below to find out mote about exemption categories in Malaysia.
Based on Orders of Schedule A, the lists or class of persons exempted from the payment of sales tax are Ruler State (The Yang Di-Pertuan Agong), Ruler of States, Federal or State of Department, Local Authority, Duty Free Shops, Inland Clearance, Public Higher Education Institution etc.
The Schedule B provides sales tax exemption to manufacturers of specific non-taxable goods - tax are exempted from the acquisition of raw materials, components, packing materials and manufacturing aids used directly in manufacturing activities.
The person exempted from tax under Schedule C is the registered manufacturer of taxable goods- exemption of tax for the acquisition of raw materials, components, packing materials and manufacturing aids used directly in manufacturing of taxable goods.
How can I indicate that I'm exempted from sales tax?
- Login to your Books Plus account.
- Click on Settings via the sidebar menu.
- Select organization profile.
- Click on the edit button.
5. A pop-up menu will appear. Navigate to Compliance Tab.
6. Enable the toggle " is your business registered for exemption".
7. Enter the exemption number and expiry date.
8. Enable the toggle if exemption certificate is available.
9. Choose the exemption criteria; this can be schedule A, schedule B or schedule C3 and C4 (trader).
10. Click on the save button to save the changes.