The service tax chargeable under the Service Tax Act 1975 shall be due
When payment is received for the taxable service provided to the customer by the taxable person.
When the whole or any part of the payment for any taxable service provided is not received within a period of twelve calendar months from the date of issue of the invoice for the taxable service provided, service tax shall be due on the day following that period of twelve months.
Example: The service provider has issued an invoice on 1-1-2011 for Rm. 1060.00 and this includes Rm.60/- as service tax. If he doesn't receive the payment by 1-1-2012 then he has to pay tax of Rm.60.00 to the department.
In Malaysia the Financial Year covers from 1st January to 31st December.
Any tax which falls due during any taxable period shall be payable to the Director General within twenty-eight (28) days from the expiration of that taxable period.
Service Tax is paid on the Assessable Value @ 6%. Consider the following example.
ABC Company is a Consultancy firm and charges 1200 as consultation fees.
The breakup of the Total Service Charge is as follows.
Consultation Charges 1000.00
Tax @ 6% 60.00
Disbursement - 140.00
If the client pays RM. 600 as partial payment, then the amount can be allocated using any of the following methods.
Total Billed Amount 1200
Total Amount Received 600
Adjusting the Disbursement Amount
Amount received 600
Total disbursement 140
Balance 460
The Balance amount can be adjusted as follows.
Towards Consultation charges (460*1000)/1060 433.96
Towards Tax (460*60)/1060 26.04
Total 460.00
The Service Tax Report appears as follows.
Date |
Total Amount Billed |
Taxable Fees Collected |
Tax Collected |
Taxable Fees Outstanding > 1 year |
Tax Outstanding > 1 year |
Total Tax Payable |
01-Jan-12 |
1200 |
433.96 |
26.04 |
|
|
26.04 |
If payment is not received within 12 calendar months of the date of issuance of invoice, the tax is due on the day immediately after the expiry of the 12-month period. This amount appears in the column Tax Outstanding > 1 year.
Total Billed Amount 1200
Total Amount Received 600
Adjusting the Disbursement Amount
Amount received 600
Total disbursement
Balance 600
The Balance amount can be adjusted as follows.
Towards Consultation charges (600*1000)/1060 566.04
Towards Tax (600*60)/1060 33.96
Total 600.00
The Service Tax Report appears as follows.
Date |
Total Amount Billed |
Taxable Fees Collected |
Tax Collected |
Taxable Fees Outstanding > 1 year |
Tax Outstanding > 1 year |
Total Tax Payable |
01-Jan-12 |
1200 |
566.04 |
33.96 |
|
|
33.96 |
Total Billed Amount 1200
Total Amount Received 600
Adjusting the Disbursement Amount
Amount Received 600
The amount can be adjusted as follows.
Towards Consultation Charges (600*1000)/1200 500.00
Towards Tax (600*60)/1200 30.00
Towards Disbursement Amount (600*140)/1200 70.00
Total 600.00
The Service Tax Report appears as follows
Date |
Total Amount Billed |
Taxable fees Collected |
Tax Collected |
Taxable fees Outstanding > 1 year |
Tax Outstanding > 1 year |
Total Tax Payable |
01-Jan- 12 |
1200 |
500.00 |
30.00 |
|
|
30.00 |
Invoice for Taxable Service must fulfil the following criteria:
All invoices and receipts shall be printed and serially numbered.
The total of all sales made and all service tax collected in each day shall be transferred at the end of such day to a record of sales, which shall be submitted together with the monthly returns.
No alteration shall be made on the invoices or receipts and copies thereof. If a mistake has been made, the invoice or receipt and copy thereof shall be treated as cancelled and clearly marked "CANCELLED". The cancelled invoice or receipt together with all copies thereof shall be submitted to the Director General for inspection.
If any invoice or receipt which has been issued is missing, the Director General shall estimate the service tax to be paid.
All invoices, receipts, books of account and other records as required by the Act shall be kept within the principal place of business, or in any other place approved by the Director General.
The person claiming the refund must keep all records and documents pertaining to the claim for a period of six years from the date of claim for inspection by the proper officer at any time.
When a payment is received from a customer, Service Tax must be paid to the Customs Department within 28 days of the end of a Taxable Period (a Taxable Period covers two months). If the licensee does not receive the payment even after the invoice has been issued, the Service Tax has to be paid within 28 days of the 12 month-period from the date of issuance of the invoice.
The Service Tax due and payable, in respect of any return required to be filed under the Act, can be paid by any of the following methods.
Cash
Postal Order or Money Order
Cheque or Bank Draft
The cheque or bank draft has to be addressed to the ‘State Customs Director’ account where the Tax is paid.
