Published August 27, 2018 · Updated October 24, 2026
How Does the Royal Malaysian Customs Department Administer SST?
If you make taxable goods, provide prescribed services or import goods into Malaysia, Customs SST rules apply to your business. The Royal Malaysian Customs Department (RMCD) runs the whole system, from registration and returns to collection at the border and record checks.
In this guide, we discuss how Customs administers SST in Malaysia, the current rates, who must register, importer obligations, SST-02 deadlines and record-keeping duties.
This guide first appeared on August 27, 2018, days before the launch. That pre-launch content no longer matches the live system. We have rebuilt the page as a current Customs SST guide for 2026.
The stakes have grown since launch day. The standard service tax rate rose from 6% to 8% on 1 March 2024. Low-value goods bought online from abroad have also carried 10% sales tax since 1 January 2024. Businesses quoting 2018 figures risk undercharging customers and underpaying Customs.
Customs has administered the regime since SST replaced the Goods and Services Tax (GST) on 1 September 2018, and the sections below follow its current rules. This guide provides general information only; confirm the current orders and your own treatment before invoicing or filing. Our wider Sales and Services Tax Malaysia hub expands on each topic.
What Role Does the Royal Malaysian Customs Department Play in SST?
RMCD administers both SST laws, registers liable businesses, collects sales tax at the border and audits compliance nationwide.
The Royal Malaysian Customs Department is the border and indirect tax agency under the Ministry of Finance. Its officers assess, collect and enforce the Sales Tax Act 2018 and the Service Tax Act 2018. The same department also processes import declarations, which is why imports and SST sit together.
1. Collecting sales tax at the border
Sales tax is a single-stage tax. Customs collects it when taxable goods enter the country, alongside any import duty; registered manufacturers charge it when taxable goods are sold locally.
2. Registering liable businesses
Manufacturers and service providers register through the MySST portal. RMCD issues a certificate and an SST registration number once the application is approved.
3. Processing SST-02 returns
Registered persons submit Form SST-02 for each taxable period. Customs reviews the returns, refunds overpayments on application and pursues shortfalls.
4. Auditing and enforcing
Customs officers inspect records, visit premises and impose penalties for late or short payments. Serious evasion cases can end in prosecution.
What Are the Current SST Rates and Tax Types?
Sales tax generally runs at 10% or 5%, with specific rates for prescribed goods; service tax is generally 8% or 6%, and low-value online imports carry 10%.
Sales tax applies once in the supply chain — at importation or at the manufacturing stage. Under the Sales Tax (Rate of Sales Tax) Order 2025 and its 2026 amendments, the rate is generally 10%; selected goods carry 5% or a specific rate, and exemption orders cover listed goods.
Service tax applies to prescribed services under the Service Tax Act 2018. The standard rate is 8%, while food and beverage, telecommunications, parking and logistics services remain at 6%. From 1 July 2025, construction, private healthcare and education services are also taxed at 6%, while financial services are taxed at 8%; rental or leasing services are taxed at 6% from 1 January 2026. Credit and charge card services carry RM25 per principal or supplementary card for each year or part of a year.
Low-value goods — eligible online purchases from abroad valued at RM500 or less, excluding prescribed tobacco, alcohol and vape-related goods — attract 10% sales tax under rules in force since 1 January 2024.
Our companion post, 15 Items Exempted from Sales and Services Tax (SST), lists goods that pass without sales tax.
Rates and prescribed services can change with new orders. Confirm the current Customs orders before you invoice.
SST Types and Rates in Malaysia
| Tax component | What it covers | Current rate | Legal basis |
|---|---|---|---|
| Sales tax on imports | Taxable goods brought into Malaysia | 10%, 5% for selected goods or a specific rate | Sales Tax (Rate of Sales Tax) Order 2025, as amended in 2026 |
| Sales tax on manufactured goods | Taxable goods made, sold, used or disposed of by registered manufacturers | 10%, 5% for selected goods or a specific rate, with exemptions | Sales Tax (Rate of Sales Tax) Order 2025, as amended in 2026 |
| Sales tax on low-value goods | Eligible online purchases from abroad valued at RM500 or less, excluding prescribed goods | 10% | LVG rules effective 1 January 2024 |
| Service tax (standard) | Most prescribed taxable services | 8% | Service Tax (Rate of Tax) Order 2024 |
| Service tax (selected) | Food and beverage, telecommunications, parking and logistics services | 6% | Service Tax (Rate of Tax) Order 2024 |
When Must You Register for SST with Customs?
Manufacturers of taxable goods and providers of prescribed services must register when the applicable threshold is met; importing goods alone does not trigger SST registration.
The RM500,000 figure is often quoted as one blanket SST threshold. That reading is too broad. Who must register for SST depends on which tax applies, and sector-specific treatment can change the trigger.
1. Manufacturers of taxable goods
A manufacturer must apply for registration by the last day of the month following the month in which taxable-goods sales exceed RM500,000 in 12 months.
2. Providers of prescribed services
The service tax threshold is prescribed by service category rather than a universal rule. RM500,000 applies to many services, while food and beverage, construction work and private healthcare categories can use a RM1,500,000 threshold; some prescribed services have no threshold. Check the current MySST category before relying on the headline figure.
3. Importers of taxable goods
Importing taxable goods alone does not require sales tax registration. Customs collects the applicable sales tax at the entry point instead; an importer that also manufactures taxable goods or provides prescribed services must assess registration separately.
4. Online sellers and marketplaces
Overseas sellers of low-value goods and registered marketplaces follow the low-value goods (LVG) registration rules. They collect the 10% LVG sales tax at checkout.
SST Registration Triggers at a Glance
| Who | Registration trigger | Key point |
|---|---|---|
| Manufacturers of taxable goods | Annual sales value of taxable goods exceeds RM500,000 | Apply by the last day of the month after crossing the trigger |
| Providers of prescribed services | Annual sales value of taxable services exceeds RM500,000 | Sector-specific thresholds can differ from the general figure |
| Importers of taxable goods | No SST registration required | Customs collects sales tax at the point of entry |
| Online sellers and marketplaces | LVG rules for goods valued at RM500 or less | Collect 10% sales tax on low-value goods sold online |
How Does Customs Collect Sales Tax on Imported Goods?
An ordinary importer pays sales tax at the entry point, on top of any import duty. Importing alone does not require SST registration or an SST-02 return, but separate manufacturing or service activities can.
When taxable goods arrive, the importer declares them to Customs and settles the sales tax before release. Customs calculates sales tax on the customs value plus any import duty and excise duty payable.
Importers range from sole traders to multinational companies in Malaysia bringing in components and machinery. The obligation is identical at any scale: declare, pay and document.
Marketplace sellers should also reconcile payouts and tax lines every month. Our guide, Malaysia E-Commerce Accounting: A Month-End Marketplace Payout Reconciliation Guide (2026), shows the routine step by step.
1. Declare and pay at entry
File the customs declaration for the consignment and pay the sales tax quoted. Customs releases the goods once the account is settled.
2. Check exemptions before you pay
Exemption orders relieve sales tax on many essentials. Special schemes can also relieve tax on imported production inputs for qualifying manufacturers, so confirm eligibility with RMCD first.
3. Apply the LVG rules online
Since 1 January 2024, low-value goods sold online into Malaysia carry 10% sales tax. Registered marketplaces and sellers collect it at checkout.
Customs SST Obligations and Deadlines
| Obligation | Who owes it | Deadline |
|---|---|---|
| SST registration | Liable manufacturers and service providers | By the last day of the month after the threshold is exceeded |
| Sales tax on imports | Importers of taxable goods | At the point of importation |
| Form SST-02 and payment | Registered persons | Last day of the month after each two-month taxable period |
| Record keeping | Registered persons and importers | Seven years |
How and When Do Registered Persons File and Pay SST?
Registered persons file Form SST-02 for each two-month taxable period and pay by the last day of the following month.
The default taxable period covers two calendar months, such as January and February. Bi-monthly SST filing through the MySST portal keeps the account current.
The return and the payment are due no later than the last day of the month after the taxable period ends. E-payment through the portal issues an instant receipt for your records.
1. Log in to MySST
Open your SST account and confirm the taxable period listed on the dashboard.
2. Complete Form SST-02
Declare the sales tax or service tax due for the period. SST generally does not allow a general input-tax-credit deduction; apply a specific sales-tax deduction only where eligible.
3. Pay by the deadline
Settle the balance by the last day of the following month and save the e-receipt.
4. Archive the submission
File the return, receipt and working papers with your SST records for seven years.
What Records Must You Keep for Customs SST?
Keep every SST record — invoices, import entries, returns and accounting books — for seven years.
RMCD expects registered persons and importers to keep proper records of every taxable transaction. Records must generally be kept for seven years from the latest date to which they relate.
Digital records must stay complete and readable. Produce them promptly when Customs audits, because missing documents can trigger penalties on their own.
Key SST Compliance Records
| Record | What it evidences | Retention period |
|---|---|---|
| Sales invoices and credit notes | Sales tax charged on taxable goods and services | Seven years |
| Import declarations and receipts | Sales tax paid at the border | Seven years |
| Accounting and stock records | Movement of taxable goods and inputs | Seven years |
| SST-02 returns and payment receipts | Filing and payment history | Seven years |
What Happens If You Miss an SST Deadline?
Late registration, late filing and late payment each attract penalties, with fines and prosecution for serious offences.
Customs imposes percentage penalties on unpaid or late SST and fines for incorrect returns. For late payment, the penalty is 10% of the unpaid tax for the first 30 days, followed by an additional 15% for the second 30 days and a further 15% for the third 30 days, up to a maximum of 40% after 90 days. Failure to keep records for seven years, or submitting an incorrect or incomplete return, can result in a fine of up to RM50,000, imprisonment of up to three years, or both.
We help clients regularise late filings and respond to Customs audit findings. Fixing a gap early can reduce the time and disruption involved in resolving it.
Separately, our SST service-package fees are a compliance-support option, not part of the Customs penalty regime.
SST Service Package Fees
| Packages Available | Fee (RM) subjected to Service Tax |
|---|---|
| E-Filing of SST * | Free |
| SST Registration [Compulsory / Voluntary] | From RM500 |
| SST Filings and Reviews [Bi-Monthly] | From RM800 |
Conclusion
Customs SST in Malaysia is now a mature regime. Service tax is generally 8%, with 6% rates for specified services. Sales tax is generally 10% or 5%, with specific rates for some goods; low-value imports carry 10%, and SST-02 returns fall due every two months.
Compliance becomes routine once the registration trigger, the filing calendar and the record files are in order. That is where we come in. 3E Accounting Malaysia registers clients for SST, files bi-monthly returns and handles Customs correspondence, with SST service packages covering free e-filing, registration from RM500 and filing reviews from RM800.
Malaysia keeps drawing regional investment, as our earlier post Alibaba's Investments in Malaysia Continues showed. Every new entrant meets Customs eventually.
If you searched for Customs SST guidance in Malaysia, this guide gives you a practical starting point, but your treatment can vary by prescribed category and exemption. Book a consultation with our team to register, file or repair an SST account before the next deadline.
Keep Your Malaysia SST Account Compliant
Our team handles SST registration, bi-monthly SST-02 filings and Customs queries so nothing slips past a deadline.
Frequently Asked Questions
Customs SST is the sales and service tax administered by the Royal Malaysian Customs Department under the Sales Tax Act 2018 and the Service Tax Act 2018. It replaced the GST on 1 September 2018.
Importing taxable goods alone does not require SST registration. Customs collects the applicable sales tax at the point of entry, alongside any import duty; an importer that also manufactures taxable goods or provides prescribed services must assess registration separately.
For sales tax, taxable-goods manufacturers generally register when taxable-goods sales exceed RM500,000 in 12 months. For service tax, the threshold depends on the prescribed service: RM500,000 is common, while food and beverage, construction work and private healthcare categories can have a RM1,500,000 threshold.
For each two-month taxable period, the SST-02 return and payment are due no later than the last day of the following month, filed through the MySST portal.
Keep invoices, import entries, returns and supporting financial records for seven years from the latest date to which they relate, and produce them when RMCD audits.
Abigail Yu
Director
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.
