Under the Sales Tax Act, 1972, except those goods which are specifically exempted by order of the Minister of Finance, all goods manufactured domestically or imported into Malaysia are taxable.
The term ‘manufacture of goods other than petroleum’ means the conversion of organic or inorganic materials, by manual or mechanical means, into new products by changing their size, shape or nature. It includes the assembly of parts into machinery or other products, but does not include the installation of machinery or equipment for the purpose of construction.
In relation to petroleum, the term ‘manufacture’ means refining or compounding, and includes the addition of foreign substances.
Live animals, fish, seafood and certain essential food items including Meat, milk, eggs, vegetables, fruits, bread and so on.
Medical and educational equipment including sports equipment, Books, and so on.
Photographic equipment and films
Motorcycles below 201 c.c. capacity, bicycles for adult use including Parts and Accessories
Machinery for textile industry, food industry, paper and printing industry, construction industry, metal industry, and so on
Primary commodities including cocoa, rubber and their related Products
Naturally occurring minerals, chemicals, etc.
Helicopters, aircraft, ships and other vessels
Mobile libraries and clinics; computers
Books, newspapers and other reading material
Building equipment
If the total sales value of taxable goods manufactured did not exceed RM100,000 in the preceding year and is not expected to exceed RM100,000 during the next 12 months, the manufacturer may apply for a certificate of exemption from licensing.
This certificate is renewable on a yearly basis. However, the manufacturer may choose to apply for licensing in order to enjoy tax-free inputs.
Raw materials and components (inputs) can be imported or acquired, free of sales tax, by a licensed manufacturer, for use in the manufacturing process in order to maintain the single-stage tax concept.
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