The Rules of Supply part 2
We are back! We apologize for the delay in the updates of the Malaysian GST Mechanism. We are currently experiencing some operational changes. That’s the reason why there’s delay in the updates and also the site was down for a couple of hours. Nonetheless, we present you folks the second part of the supply rules.
Value of Supply
The value of supply is the value on which GST is chargeable. It is equal to the consideration less the tax chargeable. The consideration of a supply depends on the exchange given for the supply. Consideration can be in the form of payment in money or in kind or both and in kind.
In the Supply of goods, the value includes excise duty and in the case of imported goods, the value shall includes custom duty and excise duty.
In this sections, all displays, advertisements, publications and quotations for supply of goods and services must include GST. This means that the price or consideration must be GST inclusive. This applies to all forms of goods and services from lands to professional fees. Take this for an example; you’re going to your local super mart to get a few cans of sardines and naturally you would compare the prices between different brands, when you look at the price tag and it is stated RM 4.50. After the 1st of April 2015, the RM 4.50 that you’re paying has already take into account of GST. This same goes for services you purchased.
In the event of businesses giving discounts on their products, provided they are GST registered. The discounted price will have to be based on GST inclusive price. For example, the price of this shirt is Rm 40 and during certain season the price of fell by 50%. During that season itself, the shirt only cost RM 20 as it is on a 50% discount. If this takes place post GST era, then the RM 20 you’re paying will be GST inclusive.
*However, GST exclusive price can be used if approval is given by the DG
The illustration below will show how much GST the consumer is paying for a goods or services when the price shown is GST inclusive:
That concludes the rules of supply in the Malaysian GST Mechanism. Feel free to comment about the post! or if you folks need clarification in any sections of the rules, please do not hesitate to contact us either via email or leave a comment below! We will be happy to respond to your questions. Lastly, if you think this information is informative, do share the post!
We will be posting about how does the input tax works in GST so stay tune and don’t forget to bookmark our page!