SST UPDATES AND INSIGHTS

a. Service Tax
b. Sales Tax

IMPLEMENTATION MECHANISM AND ITS COMMON ISSUES TO AVOID
AND OVERCOME IN RESPECT OF:

• REGISTRATION
  - Threshold and its determination – what is in and what is out & how is future method calculated.
  - Activities that do not require to be registered under the Sales Tax Act.
  - Understand the Single Taxable person concept
  - Registration Cancellation and its deemed sales under sales tax and
  deemed collection under the service tax.
  - Transfer of Going Concerns under Sales Tax
  - Key Responsibilities of a Registered Person.

• SALES TAX IMPLEMENTATION
  - Taxable areas and its valuation for tax purpose for 3rd party and inter-company transactions.
  - Definition of Manufacturing and resolving its dispute on its meaning.
  - HS Code / Customs Tariff Code and the Determining the Rate of Tax.
  - Types of exemptions under the exemption orders:
  
• Goods exempted from charging sales tax
  
• Persons exempted from paying sales tax – terms and conditions:
  - Schedule C –
  
• Registered Manufacturers (RM) purchase direct,
  
• Registered Manufacturers (RM) purchase through 3rd parties
  
• Registered Manufacturers (RM) sub-contracting work out:
  o Between RM to RM in PCA areas
  o Between RM and non-RM in PCA areas
  o From Special Areas and Designated Areas to PCA Area
  o From PCA areas to Special Areas and Designated Areas
  o Criteria MUST meet to qualify for exemption under C5.
• - Schedule B – Non- Register Manufacturer on their production of
  4 specific sales tax exempted goods.
  - Major Exporter Scheme
  - Schedule A – Other categories of person and its conditions requirements.
  - Machinery and spare parts exemptions – be careful of wrong advice given even from customs stations.
  
• Quarterly record keeping and periodical reporting requirements
  for goods under exemption.
  
• Procedures on sales tax treatment on scraps at different stages of
  production and finished goods.
  - Sales Tax Credit Systems.
  - Treatment for goods movement within, to and from:
  
• Designated Areas (duty free areas), and/ or
  
• Special Areas
  - Definition of Export and its documentation criteria requirements.
  - Sales Tax drawback facilities vs Schedule A item 57 exemption.
  
  

• SERVICE TAX IMPLEMENTATION
  - Service Provider and its more than 30 categories of the 10 grouping of Taxable
  services
  - Scope of taxable services in each category / group and when is Rental,
  recovering of cost including electricity, water, etc. subject to service tax.
  - Key emphasis on Management Services including Construction Project Management, Consultancy,
  Cleaning Management, etc.
  - Service tax treatment for special transactions such as:
  a. Grants received,
  b. Students exchange program charge,
  c. Property Management services by Developers, JMB, MC and third parties.
  d. Student hostels renting to parents of students,
  e. Referral fees
  f. Sales, Marketing and Business Development fees that include recovery of cost etc.
  - Person exempted from paying service tax facilities criteria.
  - Claiming refund of SToDS (Service Tax on Digital Services) incurred by local
  digital tax service provider.
  - Treatment of imported services requirement by all businesses
  including Non-SST register companies and its exemptions.
  - Service Tax treatment on
  Inter-Company Professional Services and definition of group companies AND
  when are these services taxable also to Group Companies.
  - Treatment for services provided within AND to and from:
  a. Designated Areas
  b. Special Areas

• ACCOUNTING ADMINISTRATION
  - Invoice, Debit Note and Credit Note:
  
• Standard prescribed particulars requirement.
  
• Prescribed particulars requirements to person exempted from paying
  service tax.
  - Filing of Returns & correction of errors - supplementary returns.
  - Bad Debt Relief criteria
  - Refund on SST over paid
  - Service Tax contra system.
  - Annual Audit Certificate requirements