before the date with effect from which such person was, or was required to be, registered. In short, learned counsel submitted that reg 46(2) sets out the conditions or restrictions applicable to the claim. [24] Learned counsel’s line of argument is this. By implementing the Special Formula, the DG is, in effect, restricting the amount claimable by the appellant based on the number of days the appellant has been GST registered. According to learned counsel, this is not the condition stipulated in reg 46(2). [25] Learned counsel that referred me to the judgment of the High Court in Metrogold Commercial Sdn Bhd v Ketua Pengarah Kastam [2022] MLJU 2556, which held that there is no express provision under reg 46 of the GST Regulations that provides any formula in determining the amount of the Exceptional ITCs’ claim. According to the learned Judge, it is trite that in a taxing Act, one can only look fairly at the language used, what is clearly said, and that nothing is to be read in nor implied. [26] In short, learned counsel submitted that the Special Formula adopted by the DG is not prescribed by reg 46. The attendant consequence is that the DG is not entitled to impose additional requirements without any legal basis. [27] Secondly, learned counsel for the appellant contended that any formula applied by the DG must be expressly provided either under the GST Act or GST Regulations. Learned counsel submitted that the Special Formula adopted by the DG is nowhere to be found in the GST Act, GST Regulations or even the Custom’s Guide. [28] The extension of the argument is that had the Parliament or the Minister of Finance intended to adopt a formula for Exceptional ITCs claim under reg 46, they would have expressly stated so. [29] Thirdly, the appellant contended that the Tribunal had erred in applying regulations 57 to 60 of the GST Regulations relating to Capital Good Adjustments to the instant case, which, according to learned counsel, is completely irrelevant. In para [69] of its grounds of decision, the Tribunal held as follows: Formula khas yang digunakan oleh JKDM Putrajaya dan Pulau Pinang adalah sah berlandaskan peruntukan undang-undang di bawah peraturan 57 hingga 60 PPCBP 2014 terutamanya peraturan 59(8)(i) yang menyatakan: ‘hendaklah termasuk’ cukai input di bawah peraturan 46...” [30] In short, learned counsel submitted that the Capital Goods Adjustment is unrelated to the issue of whether the appellant is entitled to Exceptional ITCs under reg 46. Capital Goods Adjustment under regulations 57 to 60 are inapplicable to wholly taxable suppliers such as the appellant. [31] Finally, learned counsel for the appellant submitted that the appellant has a legitimate expectation that the Customs would honour the representations made in their own Guide. In particular, relying on the Customs’ Guide, the appellant capitalised the costs of constructing the Batu Kawan factory in accordance with the standard accounting principles, applied for GST registration and Exceptional ITCs claim. [32] My attention was drawn to the evidence given by the Customs’ witness, Fartani Jahiku, during cross-examination at the hearing before the Tribunal: Q10: Rujuk muka surat 47, Bundle C: Betulkah dalam perenggan 59 Panduan Kredit Cukai Input, mana-mana perkhidmatan berkaitan harta modal tidak boleh dituntut di bawah Peraturan 46 GSTR melainkan ia dapat dipermodalkan mengikut prinsip perakaunan standard di Malaysia, sebelum tarikh perniagaan itu perlu didaftarkan bagi tujuan GST. Ya atau tidak. A10: Ya. [33] Learned counsel for the appellant contended that the appellant had fulfilled all the conditions required in the Customs’ Guide to claim the Exceptional ITCs with respect to the fees incurred. In the circumstances, the appellant has a legitimate expectation that Customs would act in accordance with the Customs’ Guide. The response from the Customs [34] On behalf of the Customs, the learned Federal Counsel submitted that the Special Formula adopted by the Customs was based on regulations 57 to 60 of the GST Regulations. According to the learned FC, the calculation method in the Regulations is similar to the Special Formula used by the Customs. [35] In any event, the learned FC contended that reg 60 of the GST Regulations provides that the DG may allow another method by which, or may direct the manner in which, the extent to which a capital asset is used in making taxable supplies in any subsequent interval applicable to it shall be ascertained. [36] The learned FC further submitted that reg 46 of the GST Regulations must be read together with ss 38 and 39 of the GST Act. S 39(1) provides that the taxable person’s entitlement to input tax is so much of what is “allowable” and “reasonable”. S 39(1) does not provide any fixed formula on what is reasonable or allowable. The extension of the FC’s argument is that although the Special Formula devised by Customs is not expressly provided for, it does not, ipso facto, render it “not allowable” or “not reasonable” under s 39(1) of the GST Act. [37] As to items (3) and (4) of the appellant’s claim, the learned FC submitted that the installation of electricity by TNB and professional fees are not goods supplied to the appellant. In the circumstances, the learned FC argued that they do not qualify for Exceptional ITCs under reg 46(1) of the GST Regulations. [38] In any event, the learned FC further submitted that the appellant only made a bare claim that they had capitalised those costs according to standard accounting principles. However, according to the learned FC, the appellant failed to prove at the Tribunal that such expenses had been capitalised. The Analysis [39] Let me begin by referring to the judgment of the High Court in Nobuyasu Sdn Bhd v Tribunal Rayuan Kastam Diraja Malaysia & Anor [2020] 11 MLJ 182. In that case, the appellant claimed the input tax pursuant to reg 46(1) of the GST Regulations. Meanwhile, on 1.9.2018, the Act was repealed. The DG then informed the appellant that the appellant was entitled to the input claim but only 3.36% of the total amount incurred by the appellant in constructing the warehouse, which amounted to RM33,963.70. Dissatisfied, the appellant eventually filed an appeal to the Tribunal. The Tribunal dismissed the appeal. Hence, the appellant appealed to the High Court. [40] At the High Court, Nordin Hassan J (now FCJ) held that the words in reg 46(1) of the GST Regulations were plain and unambiguous that the applicant was entitled to the ITCs’ claim, which was admitted by the DG and the Tribunal. According to the learned Judge, there was nothing in reg 46(1) or any other provisions in the GST Act that expressly provided for the reduction and apportionment of the ITC including the formula for the said reduction or apportionment. Here, the respondents’ reliance on ss 2, 38 and 39 of the GST Act and reg 39 of the GST Regulations was misconceived and untenable. [41] The learned Judge further held there were no express provisions under the law for the DG to reduce the appellant’s ITC nor any formula prescribed for the said reduction and apportionment of the ITC. If the law does not prescribe any formula or give any power for the said reduction or apportionment, it simply means that it cannot be done. There was no reason for the appellant not to receive the amount claimed as the claim was allowable under the law and reasonable as the appellant had justified it. [42] With respect, I am entirely in agreement with the aforesaid proposition. [43] The judgment of the High Court in Metrogold Commercial was affirmed by the Court of Appeal in Ketua Pengarah Kastam v Metrogold Commercial Sdn Bhd [2024] 2 MLRA 468 CA. Mohd Nazlan JCA, in delivering the judgment of the Court held that: For the above reasons, we are of the view that the decision of the appellant not to allow any refund under s 38 of the GST Act despite the clear provisions authorising the same, and its decision to invoke reg 46 to apportion the respondent's ITC Claim which allowed only the reduced amount of RM2,320,472.55 and disallowed the rest are not only erroneous, but also ultra vires, in excess of the appellant's authority, unreasonable as well as an illegality, the net effect of which more than justified the learned HCJ to have allowed the judicial review of the said impugned decision, against the appellant. [44] To summarise, the attempt made by the DG in the instant case in apportioning the entitlement of the appellant to RM117,028.46 has no basis in law. In the circumstances and with respect, the Tribunal had erred in affirming the Special Formula made by the DG purportedly under s 39 of the GST Act and reg 57(2) of the GST Regulations. In short, the DG is not allowed under the law to come up with a Special Formula against the appellant as in this case. [45] The learned FC then referred me to the recent judgment of the Court of Appeal in Ketua Pengarah Kastam, Jabatan Kastam Diraja Malaysia v Jimah East Power Sdn Bhd [2024] MLJU 419. [46] Azizah Nawawi JCA, in delivering the judgment of the Court, held that: The Respondent’s first taxable period was between 1 August 2016 to 31 August 2018. However, the operations of the power plant in generating electricity supply only started on 10 December 2018, after the abolishment of the GST. Therefore, the DG is not statutorily authorised to allow the Respondent to treat as input tax the GST amount of RM45,873,669.66 under Regulation 46(1) of the GST Regulations because the amount incurred by the Respondent is not attributable to the taxable supply made by the Respondent and therefore cannot be treated as an input tax. [47] In contrast, the appellant in the instant case, had completed the construction of its factory in March 2018 and had been supplying plastic products to its customers since April 2018, well before the abolishment of the GST Act, which was repealed with effect from 1.9.2018. In the circumstances, Jimah East Power is distinguished. [48] In any event, the Court of Appeal in Jimah East Power never held that the DG is entitled to use Special Formula in his attempt to apportion the Exceptional ITCs under reg 46 of the GST Regulations. [49] Secondly, on items (3) and (4), learned counsel for the appellant referred me to para 59 of the Customs’ Guide, which made it clear that any supply of services is claimable as Exceptional ITCs so long as the services (in the instant case items (3) and (4)) are capitalised as part of the capital asset in accordance to the standard accounting principle. [50] It is to be noted that the appellant’s Audited Financial Report for the year ended 2018 showed capitalisation of Items (3) and (4) in Years 2017 and 2018 under “property, plant and equipment”. [51] During the oral submissions before me, learned counsel conceded that the Customs’ Guide has no force of law. But learned counsel invited this Court to address the issue from the perspective of the legitimate expectation. [52] The law can be traced in the judgment of the Court of Appeal in Zakiah bte Ishak v Majlis Daerah Hulu Selangor Darul Ehsan [2005] 6 MLJ 517 CA where it was held that for legitimate expectation to arise, there must be evidence of a promise or undertaking made by the respondent to that effect. Arifin Zakaria FCJ (as the former Chief Justice then was) remarked as follows: In law for legitimate expectation to arise there must be evidence of a promise or undertaking made by the respondent to that effect. [53] Admittedly, the Customs’ Guidelines were issued not pursuant to any power given by law. They are what they are – mere guidelines and have no force of law. At best, they are of advisory character; see for e.g. Ho Kok Cheong Sdn Bhd & Anor v Lim Kay Tiong & Ors [1979] 2 MLJ 224. [54] However, by issuing the Guidelines, the Customs are representing to the taxpayer, who, relying on the said representation, had acted on it. It would, therefore be inequitable for the Customs to now say that they are not bound by the same when a taxpayer has acted on it. [55] I therefore hold that the appellant had established that it had capitalised the installation of electricity by TNB and professional fees as part of the capital asset in accordance with the standard accounting principle. It is therefore entitled to claim for Exceptional ITCs. Findings [56] For the reasons aforesaid, my findings on the issues raised are as follows: