SST Treatment in Designated Area and Special Area
Regardless SST Treatment in Designated Area and Special Area, we can refer to the case under the Service Tax Act 2018, service tax will be charged based on any provision of taxable services made in the course or furtherance of any business by a taxable person and in Malaysia. Service tax will not be charged on imported and exported services.
Under the Sales Tax Act 2018, sales tax is charged and levied on taxable goods manufactured in Malaysia by a taxable person and sold, unused or disposed by them, and on taxable goods imported into Malaysia. Sales tax is not charged on goods listed under the Proposed Sales Tax (Exemption from Registration) Order. Above action prompt clearly what is SST Treatment in Designated Area and Special Area
SST Treatment in Designated Areas (DA)
Special designated for SST Treatment in Designated Area which are still within Malaysia will be subjected to special treatment in terms of the SST. These areas in Labuan, Langkawi and Tioman. Under the special treatment in regards to the manufacturing activities carried out in these areas, the proposed sales tax will not apply in these areas except in petroleum.
SST Treatment in Designated Area Services which are provided between and within these designated areas will not be subject to the service tax except if prescribed by the Minister
Exemption from sales tax is applicable except within the following areas when importing to these SST Treatment in Designated Areas:
- The import of petroleum (Labuan)
- Import of petroleum and motor vehicles (Tioman)
- Import of marble, petroleum and anchovies (Langkawi)
In the removal of goods, the following areas are not subjected to sales tax:
- From PCA to Designated Area (deemed export)
- From Designated Area to PCA (deemed export, subject to sales tax)
- To or from Designated Area to Designated Area
- To or from Designed Area to Special Area
In the provisions of services:
- From PCA to Designated Areas will be subjected to service tax except prescribed by Minister
- From Designated Areas to PCA will be subjected to service tax
- To or from the SST Treatment in Designated Areas to Special Areas will not be subjected to service tax.
SST Treatment in Special Areas (SA)
The SST Treatment in Special Areas which are covered by the SST Treatment in Special Area tax exemption include the free zone, licensed warehouse, and licensed manufacturing warehouse and joint development area. Within these areas, the proposed Sales Tax Act does not apply in regards to the manufacturing activities.
Importing into these special areas will not generally be subjected to sales tax except when it comes to goods in the free zone, which may be subjected to sales tax provided in the Proposed Special Area Order.
Services which are provided between and within the SST Treatment in Special Areas will not be subjected to service tax unless prescribed by the Minister.
In the removal of goods, the following areas are not subjected to sales tax:
- From PCA to Special Area (deemed export)
- From Special Area to PCA (deemed export, subject to sales tax)
- To or from Special Area to Special Area
- To or from Special Area to Designated Area
In the provision of services:
- From PCA to Special Areas will not be subjected to service tax except if prescribed by the Minister
- From Special Areas to PCA will be subjected to service tax
- To or from Special Areas to Designated Areas will not be subjected to service tax
- From PCA (other than Special Areas) to Free Zones or License Manufacturing Warehouse will be subjected to service tax
