SST Return Filing in Malaysia: A Step-By-Step Process

Filing the Malaysian sales and service tax (SST) return is mandatory compliance for business entities in Malaysia, especially for those who are registered persons under the Sales and Service Tax. This involves filling out the service tax return SST-02 and reporting the number of sales and services subject to tax to the Royal Malaysian Customs Department. 

It should be done precisely and on time online through the portal MySST or other approved methods. This blog covers a comprehensive overview of what is an SST return, the process of filing this return, and related compliances. 

What is SST?

SST is Malaysia's consumption tax, reinstated on 1 September 2018 to replace the GST. It consists of two elements: Sales tax, which is charged on taxable goods manufactured or imported in Malaysia, and service tax, which is assessed on the provision of prescribed services. 

SST is a single-stage tax levied at the last point of supply, either at the manufacturing or final consumption level. It is a consumption tax that ultimately is borne by the consumer, although it is collected by businesses and remitted to the government.

What is SST Return? 

The sales and service Tax return, aka SST return, is a periodic filing requirement for businesses registered under Malaysia's sales and service tax regime. This framework is used to calculate the liability on taxable sales and services payable to the Malaysian Customs Department. Here are the key details of the same: 

• The SST return Malaysia is filed not later than the last day of the next month following the taxable period. 
• The return is to be submitted via the MySST portal or by posting it to the Customs Processing Centre (CPC). 
• The return shall include the particulars of taxable supplies and services, exemptions, deductions, and the amount of SST payable.
• Failure to file on time or payment of SST will attract penalties or interest charges.

Types of SST Returns in Malaysia

Two types of SST returns in Malaysia are designed separately for regular manufacturers and importers. The overview of these returns are as follows: 

SST-02 Return

• This is a return for registered manufacturers who are liable to submit a sales tax return. It includes businesses that manufacture any type of taxable goods in Malaysia or import for sale.
• Due Date: The return should be filed with the Director General not later than the last day of the month following the end of the taxable period.

SST-02A Return

• This return is for businesses liable to report imported services, which means businesses receiving services from overseas providers that are subject to service tax.
• Due Date: This return shall be filed no later than the last day of the following month after payment for the imported service or the invoice has been received, whichever is earlier.

SST Return Filing Process in Malaysia

Here is a detailed procedure for filing an SST return to avoid penalties and comply with government regulations. 

Different types of users have different return forms

• Registered manufacturers and businesses can access Form SST-02 through the MySST portal.
• Unregistered individuals need to register as users in the MySST system to file the return and access Form SST-02A.

SST returns can be submitted in two ways, either online or manually through post. Here’s a detailed procedure: 

Submit SST Return Online

1. Log in to the MySST system using your User ID and Password.
2. Submit the form electronically through the MySST portal.
3. Taxable persons must include the following information in the sales tax return:

• Description of taxable goods.
• Tariff codes for taxable goods.
• Value of taxable goods sold.
• Value of taxable goods used/disposed for own purposes.
• The amount of sales tax payable.

SST Return Malaysia Manually

1. Download Form SST-02 or SST-02A from the MySST portal.
2. This form must be completed in BLOCK LETTERS according to the prescriptions in Appendix II - Guidelines for Return Submission.
3. Send to: CPC, ROYAL MALAYSIA CUSTOMS, Kompleks Kastam WPKL, No 22 Jalan SS 6 / 3, Kelana Jaya, 47301, Petaling Jaya, Selangor.

Additional Filing Guidelines

• Acknowledgement of Receipt: In the case of online submission, the receipt date is the date on which the form is received by the system of MySST. Where submitted by post, the acknowledgment shall be the postcard date. 
• Filing Requirements: Form SST-02 is to be submitted for each taxable period, whether there is a tax payable or not, including NIL returns.
• Correction of Errors: Taxable persons may voluntarily correct any errors in their submitted returns using Form SST-02. The correction should conform to guidelines set by senior sales tax officers.

Method of SST Tax Payment

The taxable persons shall pay the amount of sales tax due by the last day of return for the relevant taxable period. Late payment might attract some penalties or surcharges.

Accepted Payment Methods:

• Electronic Banking: Payments are credited directly to the account of the Director General at the time of the transaction.
• Cheque or Bank Draft: Payments must be mailed to the Customs Processing Centre (CPC).
• Post-dated cheques are not accepted and are considered invalid payment of sales tax.

Penalty for Late Payment of Malaysia Tax & Incorrect Filing of the Sst Return

Late payment of sales tax in Malaysia attracts penalties so it is crucial to ensure compliance with the obligation of paying taxes. 

• First 30 Days: A penalty of 10% of the unpaid sales tax, if payment is delayed up to 30 days past the due date.
• Second 30 Days: For delays between 31 and 60 days, an additional 15% penalty is charged.
• Third 30 Days: An additional 15% penalty for delays ranging between 61-90 days.
• Maximum Penalty: There is a cumulative penalty of 40% for payments that are more than 90 days late.
• Suppose a registered manufacturer, service provider, or person other than a registered person filing their SST provides inaccurate details in their SST returns. In that case, there is a fine of a maximum of RM 50,000 or imprisonment of 3 years, or both. 

Conclusion

Understanding the SST (Sales and Service Tax) return filing process is essential for businesses in Malaysia to comply with the regulations. The process involves filing SST-2 and SST-02A returns either through the MySST portal or post. However, ensuring that details are accurate and timely returns are submitted is necessary to avoid severe penalties and imprisonment. This step is crucial for businesses to operate smoothly under the SST regime.