The much-anticipated goods and services tax ("GST")
replaced Malaysia's sales and service tax in April this year.
Under the new regime, all goods and services supplied in the
country (unless they are zero-rated, exempt supply or out of scope)
are subject to GST at the rate of 6% at every stage of the supply
chain. Although GST is conceptually a simple consumption tax,
confusion and uncertainty arising from the existing legislation
(especially the wide zero-rated and exempt supply list) have made
it a fairly complex tax in Malaysia.1
This is coupled with technical issues that will arise due to
differing standpoints adopted by the Royal Malaysian Customs
Department ("Customs Department") and GST practitioners.
The Goods and Services Tax Act 20142 ("the GST
Act") also contains a comprehensive penalty regime which, from
its drafting and intent, may be read to be punitive in nature.
During its roadshows nationwide, the Customs Department appeared to
have assured
