Update of GST General Guide for Goods written-off

Goods may expire or may be damaged and subsequently written-off and destroyed in the course of business. Input tax credit is allowable for these goods and supporting documents need to be furnished to RMCD upon request.

If the written-off goods are sold as scrap, it is subject to GST 6% and the company has to issue a tax invoice.

For written-off goods which are disposed off other than by sale, GST registered person is required to keep the related documents as proof that the goods has been written-off and disposed. For example, if such goods has been destroyed, then a certificate of destruction has to be signed by the company’s chairman or director which is to be kept for audit purpose.

Documents that are required to be kept by GST registered person for the written-off goods are as follow:
(a) audited report / financial statement and management report;
(b) audited accounts reporting the written-off goods;
(c) evidence that the asset has no commercial value;
(d) evidence that the asset is spoiled / unusable / expired;
(e) approved letter by relevant body for disposal / destruction (if any) e.g.: Certificate from Ministry of Health Malaysia, Environmental Department or Department of Chemistry Malaysia;
(f) destruction certificate signed by company’s chairman / director (refer to Appendix 1);
(g) other documents as proof the asset has been disposed / destroyed.