The final 15 days of GST: FAQ

By Tratax - Thenesh, Renga & Associates.

This article was first published in in Tratax’s Tax e-Alert, 17 May 2018.

Q1: For purchases made in May, will I be entitled to claim input tax credit on the stock-in-hand as at 31st May 2018?

A1: Section 39 of GST Act grants credit in respect of input tax that is attributable made or to be made by the business. There is no need for the acquirer to make an onward taxable supply in the same taxable period. Any supply made in June is subject to zero GST, but is nevertheless a taxable supply. Hence, the entitlement for input tax credit in May 2018 (or earlier) pursuant to the normal mechanism of GST should not be disturbed.

Q2: Can a business continue to issue tax invoice after 31st May 2018?

A2: The business may issue “tax invoice” or “invoice” (or any equivalent document). However, no tax shall be charged on any tax invoice issued after 1st June 2018; given that section 33(10) of the GST Act stipulates that it is an offence to issue tax invoice with 6 percent GST on any zero-rated item.

Q3: What would be the GST treatment for credit notes raised on or after 1st June 2018 in respect of tax invoice raised prior to 1st June? How about bad debts? What if I claim input tax credit now but do not pay the supplier in six months?

A3: It is expected that special rules will be introduced to deal with scenarios of this kind, particularly if the GST Act is repealed.

Q4: When should the final GST return be submitted?

A4: Although the GST rate has been reduced to zero, there is no amendment made to the GST Act itself. Hence, GST returns must be submitted within one month from the end of respective taxable period until and unless the GST Act is repealed or amended.

Q5: If my business is on quarterly taxable period with the first taxable periods normally ending on 31st March and so on, should I submit a GST return by 30th June given that 31st May is the last day to account for output tax?

A5: Your second taxable period for the year 2018 is the period from 1st April to 30th June. You are required to submit the GST return, and pay GST (output tax minus input tax credit), by 31st July 2018.

Q6: Should standard-rated supplies made on or after 1st June be reported in the GST return?

A6: There is no guidance on this matter at this juncture. In the interim, one may want to assume that the value is to be reported in item 10 (‘Total Value of Local Zero-Rated Supplies’). We believe further clarification/guidance on this will be made available in due course.

Q7: May I deliver goods or provide service to customer in May but raise invoice (and collect the money) only in June?

A7: Although the GST provides 21-days leeway for tax invoices to be issued, Section 66 of the GST Act applies during the transitional period. As a result, you would be required to account for 6 percent output tax on the supply.

Q8: Customs has recently conducted GST audit and issued Bill of Demand. Must the payment for Bill of Demand be made?

A8: This relates to issues prior to 1st June 2018. Hence, payment must be made. If there’s any disagreement, appeal may still be made to the GST Tribunal.

© Thenesh, Renga & Associates (TraTax Malaysia)

The information in this e-Alert are written based on information available in public domain at the time of writing. We do not assume the responsibility to update you should further information be made available that makes the contents of this e-Alert wholly or partly obsolete. The contents on this e-Alert are generic in nature and are meant for academic purposes. Views expressed herein are our interpretation of the relevant law. Strictly no liability assumed. Kindly seek case-specific consultation.