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Goods And Services Tax (GST) Offences and Penalties in Malaysia
This chart provides a summary of important Goods And Services Tax (GST) Offences and Penalties in Malaysia. For detail of Offences and Penalties , can refer to the GST Act 2014.
| SECTION | OFFENCES | PENALTY |
| S88. Penalty for incorrect return | Any person who (a) makes an incorrect return by omitting from the return any information; (b) understates any output tax or overstates any input tax in a return; or (c) gives any incorrect information in relation to any matter affecting his own liability to tax or the liability to tax of any other person, | commits an offence and shall, on conviction, be liable — (A) to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both; and (B) to a penalty equal to the amount of tax which has been undercharged or would have been so undercharged if the return or information had been accepted as correct. |
| S89. Penalty for evasion of tax, fraud | Any person who with intent to evade or to assist any other person to evade tax— (a) omits from a return any information in relation to any matter affecting the amount of his or the other person’s chargeability to tax; (b) makes any false statement or entry in any return; (c) gives any false answer whether in writing or otherwise to any question asked or request for information made in accordance with the provisions of this Act; (d) prepares or maintains or authorizes the preparation or maintenance of any false books of account, false invoices or other false records, or falsifies or authorizes the falsification of any books of accounts, invoices or records; or (e) makes, uses or authorizes the use of any fraud, artifice or contrivance. | Commits an offence and shall, on conviction, be liable— (A) for the first offence, to a fine of not less than ten times and not more than twenty times the amount of tax or to imprisonment for a term not exceeding five years or to both; and (B) for a second or subsequent offence, to a fine of not less than twenty times and not more than forty times the amount of tax or to imprisonment for a term not exceeding seven years or to both:Provided that where the amount of tax cannot be ascertained, the person shall be liable to a fine of not less than fifty thousand ringgit and not more than five hundred thousand ringgit or to imprisonment for a term not exceeding seven years or to both. |
| S90. Penalty for improperly obtaining refund, etc | Any person who causes or attempts to cause the refund under subsection 10(4), 17(6), 18(4), 38(3), 57(1), 61(1), 190(1) or 190(2) or entitlement to relief under subsection 58(1) to any person by the Director General of any amount in excess of the amount properly so refundable or relieved to him. | commits an offence and shall, on conviction, be liable— (a) to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both; and (b) to a penalty of two times the amount refunded or entitled as a relief in excess of the amount properly so refundable or so entitled as a relief. |
| S91. Penalty for offences in relation to goods, invoices and receipts | Any person who acquires possession of or deals with any goods, or accepts the supply of any services, having reasonable cause to believe that tax on the supply of goods or services or on the importation of the goods has been or will be evaded | commits an offence and shall, on conviction, be liable— (a) to a fine not exceeding thirty thousand ringgit or to imprisonment for a term not exceeding two years or to both; and (b) to a penalty of two times the amount of the tax. |
| Any person other than a registered person who issues an invoice or a receipt showing an amount as being tax or as being attributable to tax | commits an offence and shall, on conviction, be liable— (a) to a fine not exceeding thirty thousand ringgit or to imprisonment for a term not exceeding three years or to both; and (b) to a penalty of two times the amount of tax so shown. | |
| S92. Penalty for obstructing, etc., officer of goods and services tax | Any person who— (a) in any way assaults, hinders or obstructs the officer of goods and services tax in the performance of his duties under this Act; or (b) fails to give reasonable facilities or assistance to any officer of goods and services tax in the performance of his duties under this Act | commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding seven years or to a fine not exceeding one hundred thousand ringgit or to both. |
| S93. Penalty for refusing to answer question or giving false information | Any person who, being required under this Act to give any information which may reasonably be required by the officer of goods and services tax which it is in his power to give, refuses to give the information or furnishes as true the information which he knows or has reason to believe to be false commits an offence. When any of the information is proved to be untrue or incorrect in whole or in part it shall be no defence to allege that the information or any part of the information was furnished inadvertently or without criminal or fraudulent intent, or was misinterpreted or not fully interpreted by an interpreter provided by the informant. | |
| S96. General penalty | Such as Late submission of GST. | Any person who commits an offence under this Act for which no penalty is expressly provided shall, on conviction, be liable to a fine not exceeding thirty thousand ringgit or to imprisonment for a term not exceeding two years or to both. |
| S21. Notification of liability and registration | A person who is liable to be registered but fails to apply for GST registration should immediately apply for registration. | Tax due will be collected for a period of not more than six (6) years from the effective date of registration. A late registration penalty of not less than one thousand and five hundred ringgit for a period within thirty days and not exceeding an amount of twenty thousand ringgit for a period of more than three hundred and sixty days. |
PENALTY DUE TO FAILURE/LATE PAYMENT OF GOODS AND SERVICES TAX
In accordance with amendments made to Section 41 of the Goods and Services Tax Act 2014, with effect from 1/1/2016 failure to pay the amount of goods and services tax to be paid within the period specified will be penalized. Imposition of penalties will start for the taxable period for which tax payments are due and payable on 31/1/2016.
The calculation of the penalty will be based on the number of days the tax due is not paid as per the table below:-
| NUMBER OF DAYS TAX DUE IS NOT PAID | EXISTING RATES OF PENALTY (%)* | RATES OF PENALTY (%) EFFECTIVE ON 01 JANUARY 2017** |
| 1 – 30 | 5 | 10 |
| 1 – 60 | 15 | 25 |
| 1 – 90 | 25 | 40 |
| > 90 | 25 (maximum) | 40 |
* The penalty rate is charged on the amount of GST due and payable.
** The penalty rate is charged on the amount of GST remained unpaid.
Example:
If you have submitted a wrong GST return and understate your GST output tax, you will be liable for the following penalty
– S88 Penalty for incorrect return – liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both; and to a penalty equal to the amount of tax which has been undercharged or would have been so undercharged if the return or information had been accepted as correct.
– S41 Furnishing of returns and payment of tax – Effective on 01/01/2016 late penalty of 5% to 25% for the GST payable amount and effective on 01/01/2017 late penalty of 10% to 40% for the GST amount remain unpaid.
Remission of penalty
Registered persons who have been imposed late payment penalty may appeal by submitting an application for remission to the controlling station. The application shall be attached with the original payment slip or receipt of payment for online transaction as proof of payment. Remission of penalty is subject to approval by the Director General.
Getting your GST return right at the first time and minimises hassles and reduces penalty. Contact us today if you will like to know more about our GST Services in Malaysia.
Quick Links
Overview of Goods and Services Tax (GST) in Malaysia
GST List of Zero-Rated Supply, Exempted Supply and Relief in Malaysia
Overview of Specific GST Guide in Malaysia
Do I Need to Register For GST in Malaysia?
