PRELIMINARY
Short title and commencement
/akn/my/act/act/2018/807
*SERVICE TAX ACT 2018
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- Act
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- Enacted
- 2018
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Quick answer
About this act
*SERVICE TAX ACT 2018 is Malaysia Act, cited as Act 807 2018, currently marked in force and first recorded in 2018.
Opening note
Preamble
- An Act to provide for the charging, levying and collecting of service tax, and for matters connected therewith. [1 September 2018, P.U. (B) 508/2018] ENACTED by the Parliament of Malaysia as follows:
Part I
PART I
Section 1
(2)
This Act comes into operation on a date to be appointed by the
Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different parts or different provisions of this Act.
(3)
Notwithstanding subsection (2), the Minister may, by notification in the Gazette, appoint the effective date for the charging and levying of service tax under this Act.
Territorial and extra-territorial application
Section 1A
(2)
Notwithstanding subsection (1), this Act and its subsidiary legislation shall apply to any person of whatever nationality or citizenship, beyond the geographical limits of Malaysia and the territorial waters of Malaysia, if the person—
(b)
is registered under section 56C as a foreign registered person.
Interpretation
Section 2
(a)
makes payment for digital services using credit or debit facility provided by any financial institution or company in
Malaysia;
(b)
acquires digital services using an internet protocol address registered in Malaysia or an international mobile phone country code assigned to Malaysia;
(c)
resides in Malaysia;
“regulations” means regulations made under section 91;
“taxable service” means any service which is prescribed to be a taxable service under section 8;
Service Tax 15
“imported taxable service” means any taxable service acquired by any person in Malaysia from any person who is outside Malaysia;
“digital service” means any service that is delivered or subscribed over the internet or other electronic network and which cannot be obtained without the use of information technology and where the delivery of the service is essentially automated;
“limited liability partnership” has the meaning assigned to it under section 2 of the Limited Liability Partnership Act 2012 [Act 743];
“business” includes any trade, commerce, profession or vocation, or any concern in the nature of trade, commerce, profession or vocation;
“Pulau 1” has the meaning assigned to it under subsection 2(1) of the
Customs Act 1967;
“surcharge” means the surcharge referred to in subsection 32(3);
“effective date” means the date appointed under subsection 1(3);
“taxable period” means any period as determined or provided for under section 25;
“Tioman” means the Island of Tioman and the islands of Soyak,
Rengis, Tumok, Tulai, Chebeh, Labas, Sepoi and Jahat;
“Customs Appeal Tribunal” means the Customs Appeal Tribunal established under section 141B of the Customs Act 1967;
“free zone” has the meaning assigned to it under subsection 2(1) of the Free Zones Act 1990 [Act 438].
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Part II
PART II
ADMINISTRATION
Functions and powers of Director General and other officers
Section 3
(2)
Subject to the general direction and supervision of the Director
General, a senior officer of service tax shall have and exercise all powers conferred on the Director General by or under this Act, other than those conferred under sections 6, 40, 41 and 90.
(3)
Any person, other than an officer of service tax may be appointed by, or employed with the concurrence of, the Director
General for any duty or service relating to service tax and such person shall be deemed to be an officer of service tax for that duty or service.
(4)
The Director General may, by authorization in writing, confer on any officer of service tax not being a senior officer of service tax all or any of the powers of a senior officer of service tax for a period not exceeding ninety days in respect of any one authorization.
(5)
Any officer of service tax shall have the duties and powers to enforce and ensure due compliance with the provisions of this Act.
Persons appointed or employed to be public servants
Section 4
Every person appointed or employed under subsection 3(3) for any duty or service relating to the service tax shall be deemed to be a public servant within the meaning of the Penal Code [Act 574].
Service Tax 17
Section 5
Recognition of office
(2)
It shall not be an offence for any person to refuse to comply with any request, demand or order made by any officer of service tax acting or purporting to act under this Act if the officer refuses to declare his office and produce his authority card or badge on demand being made by the person.
(3)
Any person, not being an officer of service tax, who unlawfully wears, uses, possesses or displays, otherwise than in the course of a stage play or other theatrical performance—
(a)
any uniform prescribed under section 8A of the Customs
Act 1967 or any dress having the appearance of, or bearing the distinctive marks of, such uniform; or
(b)
any prescribed authority card or badge, or authority card as approved by the Director General, referred to in subsection (1), commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Confidentiality of information
Section 6
(2)
Subject to subsection (4), every person having possession or control over any document, information, return or declaration or copies thereof in relation to the business or the value of the provision of services by any taxable person, who at any time, otherwise than for the purposes of this Act or with the express authority of the Director
General—
(a)
communicates or attempts to communicate the information or anything contained in the document, return or declaration or copies thereof to any person; or
(b)
suffers or permits any person to have access to any information or to anything contained in the document, return or declaration or copies thereof, commits an offence.
(3)
No person having any official duty or being appointed or employed under this Act or who is referred to in subsection (4) shall be required to produce in any matters or proceedings in any court or tribunal any document, information, return or declaration or to divulge or communicate in the matters or proceedings of any matter or thing, coming under his notice in the performance of his duties under this
Act, except as may be necessary for the purposes of carrying into effect the provisions of this Act or in order to institute a prosecution or in the course of a prosecution for any offence committed under this Act.
(4)
The Director General may, as he deems fit, transmit or communicate any document, information, return or declaration referred to in subsection (1) or anything contained therein, to the Chief
Statistician of the Department of Statistics Malaysia which may be required in the performance of his official duty.
(5)
Notwithstanding subsection (4), the Minister may, as he deems fit, allow the Director General to transmit or communicate any document, information, return or declaration referred to in subsection (1) or anything contained therein to any other person.
Service Tax 19
Part III
PART III
IMPOSITION AND SCOPE OF SERVICE TAX
Section 7
A tax to be known as service tax shall be charged and levied on—
(a)
any taxable service provided in Malaysia by a registered person in carrying on his business; or
Section 8
The Minister may prescribe any service to be a taxable service.
Section 9
Determination of value of taxable service
(A)
a person not connected with the taxable person, the actual price for which the goods are sold; or
(B)
a person connected with the taxable person, the price at which the goods would have been sold in the ordinary course of business to a person not connected with the taxable person; or
(ii)
the provision of goods, where the goods are provided for free, the price at which the goods would have been
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sold in the ordinary course of business to a person not connected with the taxable person;
(b)
in the case of taxable service, other than the taxable service specified in paragraph (a)—
(i)
provided by a taxable person to a person not connected with the taxable person—
(B)
in the case of premium for insurance policy, or takaful contribution for takaful certificate, the actual premium or contribution paid;
(ii)
provided by a taxable person to a person connected with the taxable person, the value of the taxable service which would have been provided in the ordinary course of business to a person not connected with the taxable person; or
(iii)
where the taxable service are provided for free, the value of taxable service which would have been provided in the ordinary course of business to a person not connected with the taxable person;
(c)
in the case of betting and gaming which are prescribed to be taxable services, the value of such betting and gaming shall be as prescribed; or
(d)
in the case of imported taxable service, the value of such imported taxable service shall be as prescribed.
(1A)
Notwithstanding paragraphs (1)(a) and (b), where a taxable service is provided by a taxable person and payment for such service is made to any machine or device operated by coins, tokens or the like, the value of such taxable service shall be as prescribed.
Service Tax 21
(2)
For the purpose of this section—
“goods” means goods as prescribed;
“person connected with the taxable person” means a person connected with the taxable person as prescribed.
Rate of service tax
Section 10
(2)
The Minister may, by order published in the Gazette—
Section 11
(a)
in the case of taxable service, at the time when payment is received for the service provided to the customer by the registered person; or
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(b)
in the case of imported taxable service, at the time when the payment is made or invoice is received for the service, whichever is the earlier.
(1A)
The Director General may, upon application in writing by any registered person and subject to such conditions as he deems fit, approve the service tax in respect of the taxable service provided by the registered person to be due at the time the invoice is issued.
(2)
Where the whole or any part of the payment for any taxable service provided by the registered person is not received from the customer within a period of twelve months from the date the taxable service was provided, the service tax shall be due on the day following that period of twelve months.
(3)
Notwithstanding subsection (1)—
(a)
the service tax required to be accounted in any return made under subsection 26(3) shall be due on the day the return is required to be furnished to the Director General;
(aa) where any taxable service is provided by any registered person and payment for such taxable service is made to any machine or device operated by coins, tokens or the like, the service tax required to be accounted shall be due on the day when the coins, tokens or the like are collected from such machine or device;
(b)
the service tax in respect of betting and gaming which are prescribed to be taxable services shall be due at the time as prescribed;
(c)
where an arrangement or agreement for the provision of any taxable service is made by any person, who is a taxable person under this Act, within the period beginning from 1 June 2018 and ending immediately before the effective date, and the taxable service is provided or performed on or after the effective date—
Service Tax 23
(i)
the arrangement or agreement for the provision of such taxable service shall be deemed to have been made on the date such taxable service is provided or performed notwithstanding any payment, wholly or partly, is received or invoice is issued, for such taxable service during such period;
(ii)
any payment received within such period or on or after the effective date, or invoice issued within such period, shall be deemed to have been received or issued on the date such taxable service is provided or performed; and
(iii)
service tax shall be charged and levied on such taxable service and shall become due on the date such taxable service is provided or performed.
(4)
Where the taxable service referred to in paragraph (3)(c) are betting and gaming, the service tax in respect of such betting and gaming shall be due at the time as prescribed under paragraph (3)(b).
(5)
Paragraph (3)(c) shall not apply to a service which is prescribed as a taxable service after 1 September 2018.
Part IV
PART IV
REGISTRATION
Liability to be registered
Section 12
(b)
the total value of taxable services of the person referred to in paragraph (a), for the purpose of registration of the person under this Part.
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(2)
Any person who provides any taxable service is liable to be registered at the following time, whichever is the earlier:
(a)
at the end of any month, where the total value of all his taxable services in that month and the eleven months immediately preceding that month has exceeded the total value of taxable service prescribed under subsection (1); or
(b)
at the end of any month, where there are reasonable grounds for believing that the total value of all his taxable services in that month and the eleven months immediately succeeding that month will exceed the total value of taxable services prescribed under subsection (1).
(3)
Notwithstanding subsection (2), the Minister may prescribe that any person who provides taxable services shall be liable to be registered on the date of the commencement of the business.
(4)
The total value of all taxable services of a person providing taxable services in the month and the eleven months immediately preceding that month referred to in paragraph (2)(a) shall be disregarded if—
(a)
the registration of the person providing the taxable services is cancelled, otherwise than under subsection 20(3), during that period; and
(b)
the Director General is satisfied that before the person’s registration is cancelled, he has given all information required by the Director General in order to determine whether to cancel the registration or not.
(5)
This section shall not apply to a foreign service provider.
Application for registration
Section 13
(2)
Upon receipt of the application under subsection (1), the
Director General may approve the registration, subject to such conditions as he deems fit.
(3)
The Director General shall register the person under subsection (1) with effect from the first day of the month following the month in which the application under subsection (1) is made or from such earlier date as may be agreed between the Director General and the person but such date shall not be earlier than the date the person becomes liable to be registered.
(4)
Where any person fails to comply with subsection (1), the
Director General shall register that person on the date as the Director
General may determine but not earlier than the date he is liable to be registered under section 12.
(6)
This section shall not apply to a foreign service provider.
Voluntary registration
Section 14
(2)
Upon receipt of the application under subsection (1), the
Director General may approve the registration from such date as he may determine subject to such conditions as he deems fit.
(3)
This section shall not apply to a foreign service provider.
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Direction to treat persons as single taxable person
Section 15
(a)
the persons named in that direction be treated as a single taxable person carrying on the business activities described in that direction with effect from the date as specified in the direction; and
(b)
the single taxable person referred to in paragraph (a) to be registered with effect from the date as specified in the direction.
(2)
For the purposes of subsection (1), in determining whether any separation of business activities is artificial, regard shall be had to the extent to which the different persons carrying on those business activities are closely bound to one another by financial, economic and organizational links.
(3)
The Director General may make a direction under subsection (1)
naming any person if the Director General is satisfied that—
(b)
the activities in the course of which the person provides or has provided those taxable service form only part of certain activities in the business and that the other activities in that business, whether or not that other activities are similar to the activities carried on by that person, are being carried on concurrently or previously, or both, by one or more other persons; and
(c)
if all the taxable services provided in that business were taken into account, the person carrying on that business would, at the time of such direction is made, be required to be registered by virtue of section 12.
Service Tax 27
(4)
Any direction made under subsection (1) shall be served on each of the persons named in it.
(5)
Where, after a direction had been made under subsection (1), it appears to the Director General that any person who has not been named in that direction is providing any taxable services in the course of activities which should be regarded as part of the business activities, the Director General may make and serve on that person a supplementary direction adding that person’s name to those of the persons named in the direction under subsection (1).
(6)
Upon the addition of the person’s name in the direction under subsection (5), that person shall be treated as a single taxable person carrying on the business activities described in the direction under subsection (1) with effect from the date as specified in the direction.
(7)
Where, immediately before any direction including a supplementary direction is made, any person named in the direction has been registered in respect of the taxable service provided by him as specified in subsection (3) or (5), his registration shall be revoked by the Director General with effect from the date the single taxable person is registered under subsection (1).
(8)
Upon the revocation of registration under subsection (7), the person whose registration has been revoked together with all other persons named in the direction under subsection (1) shall be treated as a single taxable person.
(9)
In relation to a business specified in a direction, the persons named in such direction together with any person named in a supplementary direction relating to that business, being the persons who together are to be treated as a single taxable person, are referred to as “the constituent members” in subsections (10) and (11).
(10)
Where any direction is made under subsection (1)—
(a)
the single taxable person carrying on the business specified in the direction shall be registered in such name as the persons named in the direction may jointly nominate by
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notice in writing given to the Director General not later than fourteen days after the date the direction is served on the last of such persons named in the direction or, in default of such nomination, in such name as may be specified in the direction;
(b)
any taxable service provided by one of the constituent members in the course of the activities of the single taxable person shall be treated as being taxable service provided by the single taxable person;
(c)
each of the constituent members shall be jointly and severally liable for any service tax due and payable by the single taxable person;
(d)
without prejudice to paragraph (c), any failure by the single taxable person to comply with any requirement imposed under this Act shall be treated as a failure by each of the constituent members severally; and
(e)
subject to paragraphs (a) to (d), the constituent members shall be treated as a partnership carrying on the business of the single taxable person and any question as to the scope of the activities of that business at any time shall be determined accordingly.
(11)
Where it appears to the Director General that any person who is one of the constituent members should no longer be regarded as such for the purposes of paragraphs (10)(c) and (d) and the Director General gives notice in writing to that effect, that person—
(a)
shall not have any liability by virtue of paragraphs (10)(c)
and (d) for anything done after the date specified in that notice; and
(b)
on the date as specified in the notice, shall be treated as having ceased to be a member of the partnership referred to in paragraph (10)(e).
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(12)
This section shall not apply to a foreign service provider.
Registration of partnership
Section 16
(a)
persons carrying on a business in a partnership as a registered person shall be in the name of the firm; and
(b)
the same persons carrying on separate businesses in a partnership as a registered person shall be in the separate names of the respective firms.
(2)
In determining whether taxable services are provided to or by the persons referred to in subsection (1), no account shall be taken of any change in the partnership.
(3)
Any person who ceases to be a partner in a partnership shall—
(a)
notify the Director General in writing of the date of cessation within thirty days from the date of cessation; and
(b)
pay for the proportion of the partnership’s liability on any service tax due and payable on any taxable services provided by the partnership until the date of cessation.
(4)
Where any person ceases to be a partner in a partnership under subsection (3) during any taxable period, any notice, whether of assessment or otherwise, which is served on the partnership and relates to the taxable period or to any other taxable period during the whole or part of which he was a partner in the partnership, shall be deemed as to have been served also on him.
(5)
Notwithstanding any written law to the contrary, any notice, whether of assessment or otherwise, which is addressed to a partnership by the name in which it is registered under this Act, and is served in accordance with this Act shall be deemed—
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(b)
where subsection (4) applies, as having been properly served on any previous partner.
(6)
Subsections (1) and (3) shall not affect the extent to which a partner is liable for service tax owed by the firm under any other written law.
(7)
Where a person is a partner in a firm during part only of a taxable period, his liability for service tax on any taxable service provided by the firm during the taxable period shall be the proportion of the firm’s liability as may be just.
(8)
Where any notice is required to be given by a partnership under this Act, it shall be the joint and several liabilities of all partners to give the notice, except that if a notice is given by any of the partners, it shall be regarded as sufficient compliance with the requirement.
(10)
For the purposes of this section, a partnership excludes a limited liability partnership.
(11)
This section shall not apply to a foreign registered person.
Registration of branches or divisions
Section 17
(2)
The Director General may approve an application made under subsection (1) subject to such conditions as he deems fit if he is
Service Tax 31
satisfied that the registered person has fulfilled the following requirements:
(a)
it is likely to cause real difficulty for the registered person to submit a single return in respect of all the branches or divisions but for the separate registration;
(b)
each branch or division maintains a separate account in respect of its activities;
(c)
each branch or division is separately identifiable by reference to the nature of the activities carried on by or the location of the branch or division; and
(3)
The Director General may, at any time, by notice in writing to the registered person, cancel the registration approved under subsection (2) in respect of any or all of the branches or divisions if he is satisfied that—
(a)
the registered person has failed to comply with any condition imposed by the Director General under subsection (2);
(c)
the registered person has provided any false, misleading or inaccurate declaration or information in his application under subsection (1); or
(4)
Where the Director General cancels the registration in accordance with subsection (3), the cancellation shall have effect from the date as the Director General may determine.
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(5)
Subject to subsection (6), the registered person may apply in writing to the Director General for any branch or division separately registered under subsection (2) to cease to be so registered, and the
Director General may cancel the separate registration with effect from the date of application or from such later date as the Director General may determine.
(6)
A registered person registered under subsection (2) shall remain registered for a period of not less than two years or such other shorter period as the Director General may determine.
(7)
This section shall not apply to a foreign registered person.
Cessation of liability to be registered
Section 18
(2)
A registered person shall not cease to be liable to be registered by virtue of subsection (1) where the Director General is satisfied that the reason the total value of all his taxable services does not exceed the total value of taxable services prescribed under paragraph 12(1)(b) is that in the period of twelve months referred to in subsection (1) he temporarily ceases providing such taxable services, or suspends providing such taxable services, for a period of thirty days or more.
(3)
This section shall not apply to a foreign registered person.
Notification of cessation of liability
Section 19
(b)
who ceases to be liable to be registered under section 18, as the case may be, shall notify the Director General in writing of that fact and the date of cessation within thirty days from the date of cessation.
(3)
This section shall not apply to a foreign registered person.
Cancellation of registration
Section 20
Service Tax 33
(2)
Where there is no notification made under section 19 and the
Director General is satisfied that a registered person has ceased to provide taxable services or has ceased to be liable to be registered under section 18, the Director General may cancel his registration from the date the registered person ceased to provide taxable services or ceased to be liable to be registered under section 18, as the case may be, or from such later date as the Director General may determine.
(3)
Where the Director General is satisfied that on the day on which a person was registered—
(a)
in the case of a person who was registered under section 13, the person was not liable to be registered under section 12 or has ceased to provide taxable services; or
34
(b)
in the case of a person who was registered under section 14, the person was not providing taxable services or has ceased to provide taxable services, the Director General may cancel the registration of such person with effect from the date as determined by the Director General in the notification in writing to such person.
(4)
The Director General may cancel the registration of a registered person under subsection 14(2) if the registered person is in breach of any conditions imposed in relation to such registration with effect from the date of the breach or from such later date as determined by the
Director General.
(5)
This section shall not apply to a foreign registered person.
Variation of registration
Section 20A
(2)
Where there is no notification made under section 19 and the
Director General is satisfied that a registered person has ceased to provide any taxable service or has ceased to be liable to be registered under section 18, the Director General may vary the person’s registration or the particulars of the person’s registration from the date the registered person ceased to provide any taxable service.
(3)
Where the Director General is satisfied that on the day on which the person was registered⎯
(a)
in the case of a person who was registered under section 13, the person was not liable to be registered under section 12, was not providing any taxable service or has ceased to provide any taxable service; or
Service Tax 35
(b)
in the case of a person who was registered under section 14, the person was not providing any taxable service or has ceased to provide any taxable service, the Director General may vary the registration of such person or the particulars of registration of such person with effect from the date as determined by the Director General in the notification in writing to such person.
Part V
PART V
ACCOUNTING, ASSESSMENT, RECOVERY, ETC.
Invoices
Section 21
(1A)
Notwithstanding subsection (1), the Director General may, upon request in writing by a registered person and subject to such conditions as he deems fit, approve an invoice to not be issued if the
Director General is satisfied that it will not be appropriate for the registered person to issue an invoice.
(2)
No invoice showing an amount which purports to be service tax shall be issued on the provision of services—
(3)
The amount of service tax payable shall be collected by the registered person from the customer in addition to the value and any
36
other amount due and payable by the customer in respect of the taxable services.
(3A)
Notwithstanding subsection (3), where the payment for taxable services are made to any machine or device operated by coins, tokens or the like, the amount of payment shall include the amount of service tax chargeable.
(5)
This section shall not apply to a foreign registered person.
Production of invoices by computer
Section 22
(b)
are produced on any material other than paper and are delivered to the customer.
(2)
This section shall not apply to a foreign registered person.
Credit notes and debit notes
Section 23
(2)
This section shall not apply to a foreign registered person.
Duty to keep records
Section 24
Service Tax 37
(a)
all records of provision of taxable services by or to that taxable person including invoices, receipts, debit notes and credit notes;
(aa) all records of imported taxable service; and
(2)
Any record kept under this section shall be—
(a)
preserved for a period of seven years from the latest date to which the record relates;
(c)
kept in Malaysia, except as otherwise approved by the
Director General and subject to such conditions as he deems fit.
(3)
Where the record is in an electronically readable form, the record shall be kept in such manner as to enable the record to be readily accessible and convertible into writing.
(4)
Where the record is originally in a manual form and is subsequently converted into an electronic form, the record shall be retained in its original form prior to the conversion.
(5)
A copy of the record shall be admissible in evidence in any proceedings to the same extent as the record itself.
38
(5A)
This section shall also apply to any person other than a taxable person who, in carrying on his business, acquires any imported taxable service.
(6)
Any person who contravenes subsection (1), (2), (3), (4) or (5A)
commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Section 25
(2)
A taxable person may apply in writing to the Director General for a taxable period other than the period as determined under subsection (1).
(3)
The Director General may, upon receiving any application under subsection (2)—
(a)
allow the application and the taxable period shall be the period as applied for;
(b)
refuse the application and the taxable period shall remain as determined under subsection (1); or
(c)
vary the length of the taxable period or the date on which the taxable period begins or ends.
(4)
The Director General may, as he deems fit, reassign the taxable person to any taxable period other than the period to which he has been previously determined under subsection (1) or (3).
Service Tax 39
(5)
This section shall not apply to a foreign registered person.
Furnishing of returns and payment of service tax due and payable
Section 26
(2)
Where a taxable period has been varied under paragraph 25(3)(c) and notwithstanding subsection (1), the return shall be furnished within thirty days from the end of the varied taxable period.
(3)
A registered person who ceases to be liable to be registered under section 18 or ceases to carry on business of providing taxable services under section 19 shall, not later than thirty days after such cessation, or such later date as the Director General may allow, furnish a return containing particulars as the Director General may determine in respect of that part of the last taxable period during which the person was registered.
(4)
Any taxable person who is required to furnish a return under this section shall pay to the Director General the amount of service tax due and payable by him in respect of the taxable period to which the return relates not later than the last day on which he is required to furnish the return.
(5)
The return referred to in subsections (1), (2) and (3) shall be furnished whether or not there is service tax to be paid.
(6)
Any taxable person who—
(b)
furnishes an incorrect return,
40
commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(7)
Where any service tax due and payable is not paid wholly or partly by any taxable person after the last day on which it is due and payable under subsection (4) and no prosecution is instituted, the taxable person shall pay—
(a)
for the first thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (4), a penalty of ten percent of the amount of service tax which remains unpaid;
(b)
for the second thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (4), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid; and
(c)
for the third thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (4), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid.
(8)
Any taxable person who fails to pay to the Director General the amount of service tax due and payable under subsection (4) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(9)
Subject to subsection (11), prosecution for the offence under subsection (8) may be instituted after the expiry of the period specified in paragraph (7)(c).
(10)
In addition to any fine imposed by the court under subsection (8), the court may order that any taxable person who is convicted for the offence under subsection (8) to pay the penalty as specified in subsection (7).
Service Tax 41
(11)
No prosecution for the offence under subsection (8) shall be instituted against any taxable person who has paid the amount of service tax due and payable, and the penalty specified under subsection (7) within the period specified in subsection (7).
(12)
This section shall not apply to a foreign registered person.
Furnishing of declaration and payment of service tax due and payable by person other than taxable person
Section 26A
(a)
account for the service tax due in a declaration in the form and manner as determined by the Director General; and
(b)
pay to the Director General the amount of service tax due and payable by him, not later than the last day of the month following the end of the month in which the payment on the service has been made by him or invoice is received by him.
(2)
Any person referred to in subsection (1) who—
(b)
furnishes an incorrect declaration, commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(3)
Where any service tax due and payable is not paid wholly or partly by any person referred to in subsection (1) after the last day on which it is due and payable under subsection (1) and no prosecution is instituted, the person shall pay—
42
(a)
for the first thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), a penalty of ten per cent of the amount of service tax which remains unpaid;
(b)
for the second thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid; and
(c)
for the third thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid.
(4)
Any person referred to in subsection (1) who fails to pay to the
Director General the amount of service tax due and payable under paragraph (1)(b) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(5)
Subject to subsection (7), prosecution for the offence under subsection (4) may be instituted after the expiry of the period specified in paragraph (3)(c).
(6)
In addition to any fine imposed by the court under subsection (4), the court may order that the person referred to in subsection (1) who is convicted for the offence under subsection (4) to pay the penalty as specified in subsection (3).
(7)
No prosecution for the offence under subsection (4) shall be instituted against any person referred to in subsection (1) who has paid the amount of service tax due and payable, and the penalty specified under subsection (3) within the period specified in subsection (3).
Power to assess
Section 27
(i)
fails to apply for registration under section 13;
(iii)
furnishes a return which appears to the Director
General to be incomplete or incorrect;
(aa) any foreign service provider fails to apply for registration under section 56C;
(ab) any foreign registered person—
(i)
fails to furnish a return under section 56H; or
(ii)
furnishes a return which appears to the Director
General to be incomplete or incorrect; or
(b)
any person other than a taxable person who, in carrying on his business, acquires any imported taxable service—
(i)
fails to furnish a declaration under section 26A; or
(ii)
furnishes a declaration which appears to the Director
General to be incomplete or incorrect, the Director General may assess to the best of his judgment the amount of service tax due and payable, and the penalty payable under subsection 26(7), 26A(3) or 56I(2), as the case may be, if any, by the taxable person or foreign registered person or the person who is referred to in paragraph (1)(b) and shall forthwith notify him of the assessment in writing.
(2)
Where an amount has been paid to any person as being a refund of service tax under this Act which ought not to have been paid to him, the Director General may assess the amount of the refund as being service tax due and payable by him and shall forthwith notify him of the assessment in writing.
44
(3)
The assessment under subsections (1) and (2) shall not be made more than six years from the date on which the service tax was due and payable or from the date on which the refund of service tax was made, as the case may be, except where in the opinion of the Director General any form of fraud or willful default has been committed by or on behalf of any person in relation to the service tax or refund, the Director
General may, for the purposes of making good any loss of service tax or payment of refund of service tax attributable to the fraud or willful default, make an assessment at any time.
(4)
Where—
(a)
the Director General has made an assessment of service tax under subsection (1) in respect of subparagraph (1)(a)(i)
or (ii);
(b)
the service tax assessed under paragraph (a) has been paid but no return has been furnished for the taxable period to which the assessment relates; and
(c)
the taxable person fails to furnish a return for any subsequent taxable period, the Director General may, as he deems fit, assess an amount of service tax greater than that which he otherwise would have considered to be appropriate.
(5)
Where it appears to the Director General that the amount which ought to have been assessed in an assessment under subsection (1), (2)
or (4) exceeds the amount which was so assessed, he may—
(b)
in the case of a taxable person or foreign registered person, within the taxable period during which the assessment could have been made, or in the case of the person referred to in paragraph (1)(b), within the period under subsection 26A(1),
Service Tax 45
make a supplementary assessment of the amount of the excess and shall forthwith notify the person in writing accordingly.
(6)
Where an amount of service tax and penalty, if any, has been assessed and notified pursuant to subsection (1), (2) or (5), it shall be deemed to be an amount of service tax due and payable, and penalty payable, by the person and may be recovered accordingly and the amount of service tax and penalty, if any, shall be paid by the person, whether or not that person appeals against the assessment, to the
Director General unless or except to the extent that the assessment has been withdrawn or reduced by the Director General.
(7)
The Director General may make any alteration in or addition to the assessment made under this section as he deems fit to ensure the correctness of the assessment and shall forthwith notify the person in writing.
Offsetting unpaid tax against refund
Section 27A
Service Tax 43
Notwithstanding any provision of this Act, where any person has failed to pay, in whole or in part—
(a)
any amount of service tax due and payable, any surcharge accruing, or any penalty, fee or other money payable under this Act;
(b)
any amount of service tax due and payable, any surcharge accruing, or any penalty or other money payable under the
*Service Tax Act 1975 [Act 151];
(c)
any amount of sales tax due and payable, any surcharge accruing, or any penalty or other money payable under the
*Sales Tax Act 1972 [Act 64];
*NOTE—The Service Tax Act 1975 [Act 151] and the Sales Tax Act 1972 [Act 64] have since been repealed by the the Goods and Services Act 2014 [Act 762] which comes into operation on 1 July 2014 and 1 April 2012—
see sections 178 and 181 of Act 762 and P.U. (B) 319/2014.
46
(d)
any amount of sales tax due and payable, any surcharge accruing, or any penalty, fee or other money payable under the Sales Tax Act 2018 [Act 806];
(e)
any amount of goods and services tax due and payable, any surcharge accruing, or any penalty or other money payable under the *Goods and Services Tax Act 2014 [Act 762];
(f)
any amount of customs duty, or any surcharge accruing, or any penalty, fee or other money payable under the Customs
Act 1967; or
(g)
any amount of excise duty, or any surcharge accruing, or any penalty, fee or other money payable under the Excise
Act 1976 [Act 176], the Director General may offset, against the unpaid amount referred to in paragraph (a), (b), (c), (d), (e), (f) or (g), any amount or any part of any amount refundable under this Act to that person and the Director
General shall treat the amount offset as payment or part payment received from that person.
Recovery of service tax, etc., as civil debt
Section 28
(2)
Where an invoice shows a provision of taxable service or digital service as having taken place with service tax chargeable on the service, there shall be recoverable from the person who issued the invoice an amount equals to—
(a)
that which is shown in the invoice as service tax; or
*NOTE—The Goods and Services Act 2014 [Act 762] has since been repealed by the Goods and Services Tax
(Repeal) Act 2018 [Act 805] which comes into operation on 1 September 2018—see section 3 of Act 805.
Service Tax 47
(b)
so much of the total amount shown as payable as is to be taken as representing service tax, if service tax is not separately shown in the invoice, for the provision of such taxable service or digital service.
(3)
Subsection (2) shall apply whether or not—
(b)
the provision of taxable service or digital service shown on the invoice actually takes or has taken place or the amount shown as service tax or any amount of service tax is or was chargeable on the provision of the taxable service or digital service; or
(c)
the person issuing the invoice is a registered person or foreign registered person, and any amount recoverable from the person under subsection (2) shall be recoverable as such and shall otherwise be recoverable as a civil debt due to the Government.
(4)
In any proceedings to recover the service tax, surcharge, penalty, fee or other money under subsection (1), the production of a certificate signed by the Director General—
(a)
stating that any service tax, surcharge, penalty, fee or other money and the amount shown in the certificate as due and payable, accruing or payable, in any return, assessment or notice made under this Act from a person named in the certificate; and
(b)
giving the address of the person and purporting to be a copy of or an extract from any notice of assessment, shall be conclusive evidence of the service tax, surcharge, penalty or other money and the amount as due and payable, accruing or payable, in any return, assessment or notice and shall be sufficient authority for
48
the court to give judgement for that amount.
(5)
Any penalty imposed under this Act shall, for the purposes of this Act and the Limitation Act 1953 [Act 254], the Limitation
Ordinance of Sabah [Sabah Cap. 72] or the Limitation Ordinance of
Sarawak [Sarawak Cap. 49], as the case may be, be recoverable as if the penalty were service tax due and payable under this Act and accordingly subsection 6(4) of the Limitation Act 1953, section 3 of the Limitation Ordinance of Sabah or section 3 of the Limitation
Ordinance of Sarawak, as the case may be, shall not apply to that penalty.
Power to collect service tax, etc., from person owing money to taxable person or foreign registered person
Section 29
(a)
any person by whom any money is due or accruing or may become due and payable to the taxable person or foreign registered person;
(b)
any person who holds or may subsequently hold money for or on account of the taxable person or foreign registered person;
(c)
any person who holds or may subsequently hold money for or on account of any person for payment to the taxable person or foreign registered person; or
(d)
any person having authority from any other person to pay money to the taxable person or foreign registered person, to pay to the Director General forthwith, or within such time as the
Director General allows, such money, not being salary or wages due or accruing to the taxable person or foreign registered person, or so
Service Tax 49
much of such money as is sufficient to pay the sum due and payable, accruing or payable by the taxable person or foreign registered person as aforesaid.
(2)
A copy of the notice under subsection (1) shall be forwarded to the taxable person or foreign registered person at his last known address.
(3)
All payments made pursuant to a notice under this subsection (1) shall be deemed to be made on behalf of the taxable person or foreign registered person and with the authority of the taxable person or foreign registered person and all other persons concerned.
(4)
For the purposes of this section, the Director General may require any person to give him information—
(a)
as to any money, fund or asset which may be held by the person for any other person; or
(b)
of any money due and payable by him to any other person.
Recovery of service tax before payable from persons about to leave
Malaysia
Section 30
If the Director General has reason to believe that any person is about or is likely to leave Malaysia before any service tax due by him becomes payable in accordance with the provisions of this Act, the service tax shall, if the Director General deems fit, be payable on such earlier date as the Director General determines and the person shall be notified accordingly.
Recovery of service tax, etc., from persons about to leave Malaysia without paying service tax, etc.
Section 31
(e)
any other money recoverable from him under this Act, the Director General may issue to the Director General of Immigration a notice containing particulars of the person and the offence committed with a request that the person be prevented from leaving Malaysia unless he pays the service tax, surcharge, penalty, fee or other money, or furnishes security to the satisfaction of the Director General for its payment.
(2)
Subject to any order issued or made under any written law for the time being in force relating to immigration, the Director General of
Immigration who receives a request under subsection (1) in respect of a person shall exercise all measures which may include the removal and retention of any certificate of identity, passport, exit permit or other travel documents in relation to that person as may be necessary to give effect to the request.
(3)
The Director General shall cause the notice under subsection (1)
to be served personally or by registered post on the person to whom the notice relates.
(4)
The non-receipt of the notice under subsection (1) by the person referred to in subsection (3) shall not invalidate anything done under this section.
(5)
Where the person in respect of whom a notice has been issued under subsection (1) produces, on or after the date of the notice, a written statement signed by the Director General stating that all the service tax, surcharge, penalty, fee or other money specified in the
Service Tax 51
notice have been paid, or that security has been furnished for its payment, that statement shall be sufficient authority for allowing that person to leave Malaysia.
(6)
No legal proceedings shall be instituted or maintained against the Federal Government, a State Government or any other public officer in respect of anything lawfully done under this section.
Payment by instalments
Section 32
(2)
Where the service tax is allowed to be paid by instalments, the penalty under subsection 26(7) or 26A(3) shall cease to be calculated from the date the Director General allows the payment by instalments.
(3)
Where there is a default in payment of any instalment under subsection (1) on its due date for payment of the balance of the amount due and payable, the whole outstanding balance shall become due and payable on that date and shall, without any further notice being served on the person liable to pay the amount due, be subject to a surcharge equals to ten per cent of that balance and the surcharge shall be recoverable as if it were due and payable under this Act.
(4)
This section shall not apply to a foreign registered person.
Liability of directors, etc.
Section 33
(b)
the compliance officer who is appointed amongst the partners of the limited liability partnership or if no compliance officer is appointed as such, any one or all of the partners of the limited liability partnership;
(e)
the persons responsible for the management of the body of persons, as the case may be, shall together with the company, limited liability partnership, firm, society or other body of persons be jointly and severally liable for the service tax, surcharge, penalty, fee or other money.
(2)
In relation to a company that is being wound up, the directors of the company shall only be liable where the assets of the company are insufficient to meet the amount due, after paying any sum having priority under the Companies Act 2016 [Act 777] in relation to the application of the assets of the company in the winding-up over the service tax, surcharge, penalty, fee or other money.
Part VI
PART VI
EXEMPTION, REFUND AND REMISSION
Power of Minister to exempt and refund
Section 34
(3)
The Minister may, in any particular case and subject to such conditions as he deems fit—
(a)
exempt any person or class of persons from payment of the whole or any part of the service tax which may be charged and levied on any taxable service or digital service provided or any imported taxable service acquired; or
(b)
direct the Director General to make a refund to any person or class of persons of the whole or any part of the service tax or penalty paid by such persons or class of persons.
(4)
Where a registered person provides any taxable service or a foreign registered person provides any digital service to a person or class of persons exempted under subsection (1) or paragraph (3)(a), the registered person or the foreign registered person shall be exempted from charging and collecting service tax due and payable on such taxable service or digital service.
(5)
Where any person who is exempted under subsection (1) or paragraph (3)(a) fails to comply with any conditions to which the exemption relates, any service tax that has been the subject of the exemption shall become due and payable by the person on the date on which any of the conditions failed to be complied with.
(6)
Where a person who has been granted exemption under subsection (1) or paragraph (3)(a) has paid any of the service tax to which the exemption relates and has been granted approval by the
Minister for a refund of the amount of service tax which has been paid, the person shall be entitled to such refund.
Refund by deduction of service tax
Section 34A
Service Tax 53
(2)
Where after the deduction has been made under subsection (1), there is any balance in the amount of refund, the balance shall be refunded to the registered person by the Director General.
(3)
Notwithstanding subsection (2), the Director General may withhold the whole or any part of any amount refundable under subsection (2) to be credited to any following or subsequent taxable period and the Director General shall treat the amount credited as payment or part payment received from the registered person.
Claim for refund of service tax in relation to bad debt
Section 35
(a)
the whole or any part of the service tax payable to such person has been written off in his accounts as bad debts; and
(b)
the Director General is satisfied that all reasonable efforts have been made by such person to recover the service tax.
(2)
Where the person who makes a claim for a refund under subsection (1) in relation to a bad debt—
(a)
has not received any payment in respect of the provision of taxable services, such person may make a claim for a refund of the whole of the service tax paid; or
(b)
has received any payment in respect of the provision of taxable services, such person may make a claim for the difference between the service tax paid and amount calculated in accordance with the following formula:
Service Tax 55
A x C
B where A is the payment received in respect of the provision of such taxable services;
B is the value of such taxable services plus service tax payable on such taxable services; and
C is the service tax payable on such taxable services.
(3)
The person referred to in subsection (1) may make a claim for a refund of the whole or any part of any service tax in relation to the bad debt within six years from the date the service tax is paid by him and the Director General may refund the whole or any part of the service tax after being satisfied that the person has properly established the claim.
(4)
For the purposes of this section, “bad debt” means the outstanding amount of the payment in respect of the provision of taxable services including the service tax which is due to a person who is, or has ceased to be, a registered person but has not been paid to, and is irrecoverable by, the person.
(5)
This section shall not apply to a foreign registered person.
Repayment of service tax in relation to bad debt
Section 36
(2)
This section shall not apply to a foreign registered person.
Payment of service tax, etc., short paid or erroneously refunded
Section 37
(a)
the whole or any part of any service tax due and payable, surcharge accrued, or penalty, fee or other money payable, under this Act has not been paid by a person; or
(b)
the whole or any part of any service tax due and payable, surcharge accrued, or penalty, fee or other money payable, after having been paid, has been erroneously refunded to a person, the Director General shall demand from the person to pay the service tax, surcharge, penalty, fee or other money, or the deficient service tax, surcharge, penalty, fee or other money, or to repay the refund erroneously paid to him.
(2)
The demand under subsection (1) shall be made within six years from the date on which—
Service Tax 57
(a)
the service tax, surcharge, penalty, fee or other money was payable, or the deficient service tax, surcharge, penalty, fee or other money was paid; or
(3)
Upon receipt of the demand under subsection (1), the person shall—
(a)
pay the service tax, surcharge, penalty, fee or other money, or the deficient service tax, surcharge, penalty, fee or other money; or
(b)
repay the refund erroneously paid to him.
Refund of service tax, etc., overpaid or erroneously paid
Section 38
(a)
has overpaid or erroneously paid any service tax, surcharge, penalty, fee or other money; or
(b)
is entitled to the refund under subsection 34(6) or 40(3), may make a claim for refund in the form and manner as determined by the Director General.
(2)
A claim for refund under subsection (1) shall be made to the
Director General within one year from the time—
(3)
The Director General may make such refund in respect of the claim under subsection (1) after being satisfied that the person has properly established the claim.
58
(4)
The Director General may reduce or disallow any refund due in respect of the claim under subsection (1) to the extent that the refund would unjustly enrich the person referred to in subsection (1).
(5)
A claim for refund under this section shall be supported by such evidence as required by the Director General.
Refund of service tax, etc., to a foreign registered person
Section 38A
(2)
The Director General shall treat the amount credited as payment or part payment received from the foreign registered person.
Deduction from return of refunded service tax
Section 39
(2)
The registered person shall make the deduction referred to in subsection (1) within one year after the payment was made, or such extended period as may be approved by the Director General.
(3)
This section shall not apply to a foreign registered person.
Service Tax 59
Remission of service tax, etc.
Section 40
(2)
The Director General may remit the whole or any part of the surcharge accrued, or penalty, fee or other money payable, under this
Act where he deems fit.
(3)
Where a person who has been granted remission under subsection (1) or (2) has paid any of the service tax, surcharge, penalty, fee or other money to which the remission relates, he shall be entitled to a refund of the amount of service tax, surcharge, penalty, fee or other money which had been remitted.
Part VII
PART VII
RULING
Non-application of Part VII
Section 40A
This Part shall not apply to a foreign registered person.
Section 41
Public ruling
(2)
The Director General may withdraw, either wholly or partly, any public ruling made under this section.
(3)
Notwithstanding any provision of this Act, where a public ruling under subsection (1) applies to any person in relation to a business activity and the person applies the provision in the manner stated in the
60
ruling, the Director General shall apply the provision in relation to the person and the business activities in accordance with the ruling.
Customs ruling
Section 42
(c)
the principles to be adopted for the purposes of determination of value of taxable service;
(2)
An application for a customs ruling under subsection (1) may be made—
(3)
An applicant may withdraw his application at any time before a customs ruling is made and any payment made relating to the application for the customs ruling shall be forfeited by the Director
General.
Making of customs ruling
Section 43
(2)
Any customs ruling made under subsection (1) may be subject to such conditions as the Director General deems fit.
(3)
The Director General may decline to make a customs ruling if, in his opinion—
(c)
any pending appeal under section 81 involves the subject matter referred to in the application.
Amendment, modification or revocation of customs ruling
Section 44
Service Tax 61
(d)
there is a change in the material fact or circumstances on which the customs ruling was based.
(2)
The Director General shall, immediately after making the amendment, modification or revocation, give a notice in writing to the applicant referred to in section 42 of the amendment, modification or revocation and, such amended, modified or revoked customs ruling shall take effect from the date stated in the notice.
(3)
Notwithstanding subsection (2) and subject to section 38, if the amendment, modification or revocation of a customs ruling has the effect of decreasing any service tax liability in respect of any taxable
62
services, any higher service tax that has been paid shall be treated as if the higher service tax has been paid in error.
Director General to declare customs ruling to be null, etc.
Section 45
The Director General shall, by a notice, declare a customs ruling made under section 43 to be null, void and of no effect if the ruling has been obtained by the applicant referred to in section 42 by way of fraud, misrepresentation or falsification of facts.
Section 46
Different customs rulings on same subject matter
Where an applicant referred to in section 42 receives two or more different customs rulings on the same subject matter, such rulings shall be treated as being null and void, and such applicant shall immediately notify the Director General who shall, within thirty days from the date of notification, make a new customs ruling.
Part VIII
PART VIII
SPECIAL PROVISIONS RELATING TO DESIGNATED AREAS
Non-application of Part VIII
Section 46A
This Part shall not apply to a foreign registered person.
Section 47
Interpretation
In this Part, “Malaysia” excludes the designated areas and special areas.
Service Tax 63
Section 48
Taxable service provided within or between designated areas, etc.
Notwithstanding section 7, no service tax shall be charged and levied on any taxable service provided within or between designated areas or between designated areas and special areas unless the Minister otherwise prescribes by order under section 51.
Taxable service provided by person whose principal place of business located in designated areas
Section 49
Service tax shall be charged by any person whose principal place of business is located in a designated area on any taxable service provided by him within Malaysia.
Taxable service provided to designated areas by registered person whose principal place of business located in Malaysia
Section 50
Service tax shall be charged by any registered person whose principal place of business is located in Malaysia who provides any taxable service to a designated area.
Section 51
Power of Minister to impose service tax
The Minister may, by order published in the Gazette, prescribe any service provided within or between designated areas or between designated areas and special areas to be chargeable to service tax.
Part IX
PART IX
SPECIAL PROVISIONS RELATING TO SPECIAL AREAS
Non-application of Part IX
Section 51A
This Part shall not apply to a foreign registered person.
64
Section 52
Interpretation
In this Part, “Malaysia” excludes the special areas and designated areas.
Section 53
Taxable service provided within or between special areas, etc.
Notwithstanding section 7, no service tax shall be charged and levied on any taxable service provided within or between special areas or between special areas and designated areas unless the Minister otherwise prescribes by order under section 56.
Taxable service provided by person whose principal place of business located in special areas
Section 54
Service tax shall be charged by any person whose principal place of business is located in a special area on any taxable service provided by him within Malaysia.
Taxable service provided to special areas by registered person whose principal place of business located in Malaysia
Section 55
Service tax shall be charged by any registered person whose principal place of business is located in Malaysia who provides any taxable service to a special area.
Section 56
Power of Minister to impose service tax
The Minister may, by order published in the Gazette, prescribe any service provided within or between special areas or between special areas and designated areas to be chargeable to service tax.
Section 56A
(2)
The value of digital services on which the service tax is payable shall be the value charged by the foreign registered person.
(3)
Service tax on digital services shall be charged and levied at the rate fixed in accordance with subsection 10(2) by reference to the value charged by the foreign registered person.
(4)
The service tax charged on the digital service provided to the consumer shall be due at the time when the payment for the digital service is received by the foreign registered person.
(4A)
The Director General may, upon application in writing by any foreign registered person and subject to such conditions as he deems fit, approve service tax on any digital service provided by the foreign registered person to be due at the time the invoice is issued.
(4B)
Where a foreign registered person ceases to be liable to be registered under section 56D, the service tax shall be due and payable on the day the return is furnished to the Director General under subsection 56H(4A).
(5)
Any foreign registered person who contravenes subsection (1)
commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
66
Liability to be registered
Section 56B
(2)
Any foreign service provider who provides any digital service to a consumer is liable to be registered at the following time, whichever is the earlier:
(a)
at the end of any month, where the total value of all digital services provided by him in that month and the eleven months immediately preceding that month has exceeded the total value of the digital service prescribed under subsection (1); or
(b)
at the end of any month, where there are reasonable grounds for believing that the total value of all digital services provided by him in that month and the eleven months immediately succeeding that month will exceed the total value of the digital service prescribed under subsection (1).
(3)
The total value of all digital services provided by a foreign service provider to a consumer in the month and the eleven months immediately preceding that month referred to in paragraph (2)(a) shall be disregarded if—
(a)
the registration of the foreign service provider was cancelled, otherwise than under subsection 56F(3), during that period; and
(b)
the Director General is satisfied that before the registration of the foreign service provider was cancelled, the foreign service provider had given all information required by the
Director General in order to determine whether or not to cancel the registration.
Service Tax 67
Application for registration of foreign service provider
Section 56C
(2)
Upon receipt of the application under subsection (1), the
Director General may approve the registration from such date as he may determine and subject to such conditions as he deems fit.
(3)
The Director General shall register the foreign service provider under subsection (1) with effect from the first day of the month following the month in which the application under subsection (1) is made or from such earlier date as the Director General may determine but such date shall not be earlier than the date the foreign service provider becomes liable to be registered.
(4)
Any foreign service provider who contravenes subsection (1)
commits an offence and 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.
Cessation of liability to be registered
Section 56D
Any foreign registered person shall cease to be liable to be registered where—
(a)
the Director General is satisfied that he ceases to provide digital services;
(aa) the Director General is satisfied that the total value of all digital services provided by him in that month and the eleven months immediately preceding that month does not exceed the total value of digital services prescribed under subsection 56B(1); or
68
(b)
he has been registered under subsection 13(2) or (4).
Notification of cessation of liability
Section 56E
(a)
ceases to provide digital services;
(aa) ceases to be liable to be registered under paragraph 56D(aa);
or
(b)
has been registered under subsection 13(2) or (4), shall notify the Director General in writing of that fact and the date of cessation within thirty days from the date of cessation.
(2)
Any foreign registered person who contravenes subsection (1)
commits an offence and 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.
Cancellation of registration
Section 56F
(2)
Where there is no notification made under section 56E and the
Director General is satisfied that a foreign registered person has ceased to be liable to be registered under section 56D, the Director General may cancel the registration of the foreign registered person from the date the foreign registered person ceased to be liable to be registered
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under section 56D or from such later date as the Director General may determine.
(3)
Where the Director General is satisfied that on the day on which a foreign service provider was registered, such foreign service provider was not liable to be registered under section 56C or has ceased to be liable to be registered under section 56D, the Director General may cancel the registration of such foreign service provider with effect from the date as determined by the Director General in the notification in writing to such foreign service provider.
Issuance of invoice
Section 56G
(2)
The invoice or document referred to in subsection (1) may be issued electronically or in paper form.
(3)
Any foreign registered person who contravenes subsection (1)
commits an offence and 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.
Credit notes and debit notes
56GA. Where any digital service is provided by any foreign registered person which involves the issuance and receipt of credit notes or debit notes under the prescribed circumstances and conditions, such foreign registered person shall make deduction or addition of service tax in his returns accordingly, and the credit notes and debit notes shall contain the prescribed particulars.
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Taxable period and accounting for service tax
Section 56H
(2)
A foreign registered person may apply in writing to the Director
General for a taxable period other than the period as determined under subsection (1).
(3)
The Director General may, upon receiving any application under subsection (2)—
(a)
allow the application and the taxable period shall be the period as applied for;
(b)
refuse the application and the taxable period shall remain as determined under subsection (1); or
(3A)
The Director General may, as he thinks fit, re-determine any taxable period other than the period as determined under subsection (1)
or (3) for the foreign registered person.
(4)
A foreign registered person shall, in respect of his taxable period, account for the service tax due, in a return, as may be determined by the Director General and the return shall be furnished to the Director General in the manner as determined by the Director
General not later than the last day of the month following the end of his taxable period to which the return relates.
(4A)
A foreign registered person who ceases to be liable to be registered under section 56D shall furnish a return not later than thirty days or such later date containing particulars as the Director General may determine in respect of that part of the last taxable period during which the foreign registered person was registered.
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(4B)
Subject to subsections (4) and (4A), a return shall be deemed to be furnished upon receiving by the Director General in the form and manner as determined by the Director General.
(5)
Where a taxable period has been varied under paragraph (3)(c)
and notwithstanding subsection (4), the return shall be furnished not later than the last day of the month following the end of the varied taxable period.
(6)
The return referred to in subsections (4), (4A) and (5) shall be furnished whether or not there is service tax to be paid.
(7)
Any foreign registered person who—
(b)
furnishes an incorrect return, commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Payment of service tax
Section 56I
(2)
Where any service tax due and payable is not paid wholly or partly by the foreign registered person after the last day on which it is due and payable under subsection (1) and no prosecution is instituted, the foreign registered person shall pay—
(a)
for the first thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), a penalty of ten per cent of the amount of service tax remains unpaid;
72
(b)
for the second thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax remains unpaid; and
(c)
for the third thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax remains unpaid.
(3)
Any foreign registered person who fails to pay the Director
General the amount of service tax due and payable under subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(4)
Subject to subsection (6), prosecution for the offence under subsection (3) may be instituted after the expiry of the period specified in paragraph (2)(c).
(5)
In addition to any fine imposed by the court under subsection (3), the court may order that any foreign registered person who is convicted for the offence under subsection (3) to pay the penalty as specified in subsection (2).
(6)
No prosecution for the offence under subsection (3) shall be instituted against the foreign registered person who has paid the amount of service tax due and payable and the penalty specified under subsection (2) within the period specified in subsection (2).
Duty to keep records
Section 56J
(a)
all records of provision of digital service by the foreign registered person including invoices and receipts; and
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(2)
Any record kept under this section shall be preserved for a period of seven years from the latest date to which the record relates.
(3)
Where the record is in an electronically readable form, the record shall be kept in such manner as to enable the record to be readily accessible and convertible in writing.
(4)
A copy of the record shall be admissible in evidence in any proceedings to the same extent as the record itself.
(2)
or (3) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Service of notice, etc., on foreign registered person
Section 56K
Every notice, direction or any other document required by this
Act to be served on a foreign registered person may be served by electronic service under section 87.
Part X
PART X
ENFORCEMENT
Persons bound to give information
Section 57
(2)
Every person required by the proper officer of service tax to produce any goods, documents, articles or things which are within the power of such person to produce, and which are—
74
(a)
goods, documents, articles or things used in any transaction or other matter relating to service tax; or
(b)
goods, documents, articles or things into which it is the duty of the proper officer of service tax to inquire under this Act, shall produce such goods, documents, articles or things.
(3)
Where any information, goods, documents, articles or things are not in the national language or English language, any proper officer of service tax may by notice in writing require the person or any other person to produce within a reasonable period a translation of the information, goods, documents, articles or things in the national language or English language as the proper officer of service tax may determine.
(4)
Any person—
(b)
who fails to produce a translation as required under subsection (3), commits an offence.
Access to places or premises
Section 58
(2)
Where any senior officer of service tax exercises his powers under subsection (1), the person who carries on his business or any other person present at the place or premises at that time of entry shall provide to the officer all reasonable facilities and assistance for the exercise of his duties under this section.
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(3)
Where any senior officer of service tax enters upon any place or premises in accordance with this section, he may—
(a)
require the person providing services who carries on his business at such place or premises or any other person present at such place or premises, as the case may be, to produce any goods, documents, articles or things, which such person is required to keep under the provisions of this
Act, or which relates to any taxable service;
(b)
examine any goods, documents, articles or things and take copies of any documents;
(c)
seize and detain any goods, documents, articles or things which, in his opinion, may afford evidence of the commission of any offence under this Act;
(d)
require the person providing services who carries on his business at such place or premises or any other person present at such place or premises, or any person employed by such person to answer questions relating to any goods, documents, articles or things, or any entry in any documents, or any taxable service;
(e)
require any container, envelope or other receptacle in such place or premises to be opened; or
(f)
at the risk and expense of the person providing services who carries on his business at such place or premises or any other person present at such place or premises, open and examine any package, or any goods or materials, in such place or premises.
(4)
Where the senior officer of service tax acting under this section is unable to obtain access to any place or premises where a person providing services carries on his business, or to any receptacle contained in the place or premises, he may, at any time, enter such place or premises, and open such receptacle in such manner, if necessary by force, as he may think necessary.
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(5)
Any person who contravenes subsection (2) commits an offence.
Access to recorded information or computerized data
Section 59
(2)
In addition, a senior officer of service tax exercising his powers under sections 58, 60 and 61—
(a)
may inspect the operation of any computer and any associated apparatus or material which he has reasonable cause to suspect is or has been used in connection with the information or data; and
(i)
the person by whom or on whose behalf the senior officer of service tax has reasonable cause to suspect the computer is or has been so used in connection with the information or data; or
(ii)
the person having charge of, or is otherwise concerned with, the operation of the computer, apparatus or material in connection with the information or data, to provide the officer with such reasonable assistance as he may require for the purpose of this section.
(3)
For the purposes of subsection (1), “access” includes being provided with the necessary password, encryption code, decryption code, software or hardware and any other means required to enable comprehension of recorded information or computerized data.
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Magistrate may issue search warrant
Section 60
(a)
to enter the place, premises or conveyance and to search for and seize the goods, documents, articles or things; and
(b)
to arrest any person being in the place, premises or conveyance in whose possession the goods, documents, articles or things are found or who may reasonably be suspected as having concealed or deposited such goods, documents, articles or things.
(2)
The senior officer of service tax authorized under subsection (1) may, if it is necessary so to do—
(a)
break open any outer or inner door of the place, premises or conveyance and enter every part thereof, if necessary forcibly;
(b)
remove by force any obstruction to the entry to search or to seize as he is empowered to effect; and
(c)
detain every person found in the place, premises or conveyance until the search has been completed.
Search may be made without warrant
Section 61
Whenever it appears to the senior officer of service tax that there is reasonable cause to believe that in any place, premises or conveyance there are concealed or deposited any goods, documents,
78
articles or things which may afford evidence of the commission of any offence under this Act and if he has reasonable grounds for believing that by reason of the delay in obtaining a search warrant the goods, documents, articles or things are likely to be removed, he may exercise in, upon and in respect of the place, premises or conveyance, all the powers under section 60 in the same manner as if he was empowered so to do by a warrant issued under that section.
Section 62
Seizure of goods, etc.
(a)
all goods, documents, articles or things in respect of which the proper officer of service tax has reasonable cause to suspect that there has been committed any offence under this Act, any violation of any of the provisions of this Act, or any breach of any condition subject to which a registration has been approved under sections 13 and 14;
and
(b)
any other goods, documents, articles or things which may reasonably be believed to have a bearing on the offence, violation or breach referred to in paragraph (a).
(2)
Whenever any goods, documents, articles or things are seized under this Act, the proper officer of service tax shall forthwith give notice in writing of such seizure and the grounds of the seizure to the owner of the goods, documents, articles or things, if known, either by delivering such notice to him personally or by post at his place of abode.
(3)
The provisions of this section relating to the seizure of any goods, documents, articles or things shall apply to all contents of any receptacles, packages or conveyance in which the goods, documents, articles or things are found, and to any articles used to conceal the goods, documents, articles or things.
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(4)
Where a senior officer of service tax is satisfied that the goods, documents, articles or things seized are not required for the purposes of investigation, prosecution or any proceedings under this Act, he may release the goods, documents, articles or things to—
(b)
the person from whose possession, custody or control, the goods, documents, articles or things were seized.
Power to seal
Section 62A
(2)
A person who, without lawful authority, breaks, tampers with or damages the seal referred to in subsection (1) or removes the goods, documents, articles, things, receptacles, packages or conveyances under seal, or attempts to do so, commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding one hundred thousand ringgit or to both.
Power of arrest
Section 63
(a)
any person found committing or attempting to commit, or employing or aiding any person to commit, or abetting the commission of, an offence under this Act;
80
(b)
any person whom he may reasonably suspect to have in his possession any goods, documents, articles or things liable to seizure under this Act; or
(c)
any person whom he may reasonably suspect to have committed an offence under this Act.
(2)
The proper officer of service tax may search or cause to be searched any person arrested under subsection (1) provided that—
(a)
any person who requests that his person be searched in the presence of a senior officer of service tax shall not be searched except in the presence of and under the supervision of such senior officer of service tax, but such person may be detained until the arrival of such senior officer of service tax, or taken to any office or police station where such senior officer of service tax may be found;
(b)
the goods and baggage of the person who requests to be present when the goods and baggage are searched and so presents himself within a reasonable time shall not be searched except in his presence; and
(c)
no person shall be searched except by another person of the same gender, and such search shall be conducted with strict regard to decency.
(3)
Any proper officer of service tax making an arrest under subsection (1) shall, without unnecessary delay, bring the person arrested to the nearest police station, and thereafter the person shall be dealt with in accordance with the law relating to criminal procedure for the time being in force.
(4)
If any person liable to be arrested under this Act is not arrested at the time of committing the offence for which he is so liable, or after arrest makes his escape, he may at any time thereafter be arrested and dealt with as if he had been arrested at the time of committing such offence.
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(5)
Any proper officer of service tax may cause to be taken photographs, finger and thumb impressions and any other form of identification that may be required under any other written law of any person charged with an offence against this Act.
(6)
Every person so arrested may be released from custody—
(a)
on his depositing such reasonable sum of money as the proper officer of service tax may require;
(b)
on his executing a bond, with such surety or sureties, as the proper officer of service tax may require; or
(c)
on his depositing such reasonable sum of money as the proper officer may require and his executing a bond, with such surety or sureties, as the proper officer of service tax may require.
(7)
Any person who has been released from custody under subsection (6) may be arrested without warrant by any proper officer of service tax—
(a)
if such officer has reasonable grounds for believing that any conditions subject to which such person was released or otherwise admitted to bail has been or is likely to be breached; or
(b)
on being notified in writing by the surety of such person that such person is likely to breach any conditions subject to which such person was released and that the surety wishes to be relieved of his obligation as surety.
Additional powers
Section 63A
(2)
For the purposes of this Act –
(a)
where an order, a certificate or any other act is required to be given, issued or done by an officer in charge of a Police
District under any written law, such order, certificate or act may be given, issued or done by a senior officer of service tax, and for such purpose, the place where the order, certificate or act was given, issued or done shall be deemed to be a Police District under his charge; and
(b)
a proper officer of service tax shall have all the powers conferred on an officer in charge of a police station under any written law, and for such purpose the office of such officer shall be deemed to be a police station.
Powers of enforcement, inspection and investigation
Section 63B
For the purposes of this Act, a senior officer of service tax shall have all the powers of a police officer of whatever rank as provided for under the Criminal Procedure Code [Act 593] in relation to enforcement, inspection and investigation, and such powers shall be in addition to the powers provided for under this Act and not in derogation thereof.
Part XI
PART XI
TRIALS AND PROCEEDINGS
Jurisdiction to try offences
Section 64
Notwithstanding any written law to the contrary, a Sessions Court shall have jurisdiction to try any offence under this Act and to impose punishment under this Act for any such offence.
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Section 65
Evidence by certificate, etc.
(b)
any return or declaration has not been furnished or had not been furnished on any date;
(c)
any service tax shown as due and payable in any return, declaration or assessment has not been paid;
(d)
any penalty and the amount of the penalty shown as due from a person named in the certificate; or
(e)
any public ruling is made under section 41 or customs ruling is made under section 43, shall be prima facie evidence of the facts stated in the certificate without proof of the signature to the certificate.
Evidence of agent provocateur admissible
Section 65A
(2)
Notwithstanding any rule of law or the provisions of this Act or any other written law to the contrary, and that the agent provocateur is a police officer of whatever rank or an officer of service tax, any statement, whether oral or in writing made to an agent provocateur by any person who subsequently is charged with an offence under this Act shall be admissible as evidence at his trial.
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Obligation of secrecy
Section 66
(2)
Any person who contravenes subsection (1) 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.
Protection of informers from discovery
Section 67
(2)
If any documents which are produced in evidence or liable to inspection in any civil or criminal proceedings contain any entry in which any informer is named or described or which might lead to his discovery, the court shall cause all the passages to be concealed from view or to be obliterated so far only as may be necessary to protect the informer from discovery.
(3)
If in the trial for any offence under this Act, the court, after full enquiry into the case, believes that the informer wilfully made in his complaint a material statement which he knew to be false or did not believe to be true, or if in any other proceedings the court is of the opinion that justice cannot fully be done between the parties thereto without the discovery of the informer, it shall be lawful for the court to
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require the production of the original complaint, if in writing, and permit enquiry and require full disclosure concerning the informer.
Burden of proof
Section 68
Where any dispute arises in any prosecution as to whether—
(b)
any provision of service is not liable to service tax chargeable under this Act;
(ba) any service acquired by any person in Malaysia from any person who is outside Malaysia is not liable to service tax chargeable under this Act;
(d)
any amount of service tax chargeable under this Act is subject to any deduction, the burden of proof of such dispute shall lie on the accused.
Court order
Section 69
(2)
In addition to subsection (1), the court has civil jurisdiction to the extent of the amount of service tax due and payable or penalty
86
payable and the order is enforceable in all respects as a final judgement of the court in favour of the Director General.
(3)
Where any person is found not guilty of an offence under this
Act, and if he has paid the amount of service tax due and payable or penalty payable under this Act pursuant to section 85 in respect of the offence charged, the court may order the amount paid to be refunded to such person where no notice of appeal is filed.
Imprisonment for non-payment of fine
Section 69A
Notwithstanding sections 283 and 284 of the Criminal Procedure
Code, the period of imprisonment imposed by any court in respect of the non-payment of any fine under this Act, or in respect of the default of a sufficient distress to satisfy any such fine, shall be such period of such description, as in the opinion of the court will satisfy the justice of the case, but shall not exceed in any case the maximum period as follows:
(a)
where the fine does not exceed five thousand ringgit, the maximum period shall be two months;
(b)
where the fine exceeds five thousand ringgit but does not exceed ten thousand ringgit, the maximum period shall be four months;
(c)
where the fine exceeds ten thousand ringgit but does not exceed twenty thousand ringgit, the maximum period shall be six months, with two additional months for every ten thousand ringgit after the first twenty thousand ringgit of the fine.
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No costs or damages arising from seizure to be recoverable unless seizure without reasonable or probable cause
Section 70
No person shall, in any proceedings before any court in respect of the seizure of any goods, documents, articles or things in exercise or the purported exercise of any power conferred under this Act, be entitled to the costs of the proceedings or to any damages or other relief, other than an order for the return of such goods, documents, articles or things or the payment of the value of such goods, documents, articles or things, unless such seizure was made without reasonable or probable cause.
Part XII
PART XII
GENERAL
Evasion of service tax
Section 71
(a)
omits from a return any information in relation to any matter affecting the amount of service tax chargeable by him or other person;
(b)
makes a false statement or entry in any return, declaration, claim or application;
(c)
gives any false answer, whether in writing or otherwise, to any question asked or request for information made under this Act;
(d)
prepares or maintains, or authorizes the preparation or maintenance of, any false book of accounts, false invoices or other false records, or falsifies or authorizes the falsification of any book of accounts, invoices or records;
or
88
(e)
makes, uses or authorizes the use of any fraud, artifice or contrivance, commits an offence.
(2)
Any person who commits an offence under subsection (1) shall, on conviction—
(a)
for the first offence, be liable to a fine of not less than ten times and not more than twenty times the amount of service tax or to imprisonment for a term not exceeding five years or to both; and
(b)
for a second or subsequent offence, be liable to a fine of not less than twenty times and not more than forty times the amount of service tax or to imprisonment for a term not exceeding seven years or to both.
(3)
For the purposes of subsection (2), where the amount of service 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.
(4)
Any person who assists in, or advises with respect to, the preparation of any return or declaration, as the case may be, which results in an understatement of the liability for service tax of another person, unless he satisfies the court that the assistance or advice was given with reasonable care, commits an offence and shall, on conviction, be liable to a fine of not less than two thousand ringgit and not more than twenty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(5)
Any reference in paragraph (1)(e) in relation to a person who makes, uses or authorizes the use of any fraud, artifice or contrivance includes a reference to a person who, without the authority of the officer of service tax—
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(a)
destroys, damages, erases, alters or manipulates data stored in, or used in connection with, a computer;
(b)
introduces into, or records or stores in, a computer by any means data for the purpose of—
(i)
destroying, damaging, erasing, altering or manipulating other data stored in that computer; or
(ii)
interfering with, interrupting or obstructing the lawful use of that computer, or the data stored in that computer; or
(c)
otherwise uses a computer, the purpose or effect of which is to evade service tax.
(6)
For the purposes of subsection (5), “data” includes any computer programme or part of a computer programme.
(7)
In any prosecution under this section, any evasion of service tax shall be deemed to be with the knowledge of the accused unless the contrary be proved by the accused.
Giving incorrect information relating to liability to service tax
Section 72
Without prejudice to any other liability incurred under this Act, any person who gives any incorrect information in relation to any matter affecting his own liability to service tax or the liability of any other person to service tax commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding fifty thousand ringgit or to both.
Section 73
Improperly obtaining refund
Director General under subsection 10(4), 35(1) or 38(1) to himself or
90
to any other person of any amount in excess of the amount properly so refundable to him or to that 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 of two times the amount refunded in excess of the amount properly so refundable.
Improperly obtaining deduction of service tax
Section 73A
Any person who causes or attempts to cause the deduction of service tax under subsection 23(1), 34A(1) or 39(2) for himself or for any other person of any amount in excess of the amount properly so deductible for him or for that 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 of two times the amount deducted in excess of the amount properly so deductible.
Employee may transact business
Section 74
(2)
A proper officer of service tax may refuse to transact business with such employee unless the person referred to under subsection (1)
identifies such employee to such proper officer of service tax as empowered to transact.
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Transaction of business on behalf of any person
Section 75
(2)
The person who transacts business on any of the matters stated in subsection (1) on behalf of the person referred to in that subsection shall—
(b)
produce any thing in the form and manner as determined by the Director General which is required to be submitted for the purposes of the matter being transacted.
(3)
Any person who contravenes subsection (1) commits an offence.
Offences by authorized and unauthorized persons
Section 76
Any person—
(a)
being an employee of a taxable person or foreign registered person or a person authorized under section 75 who—
(i)
withholds for his own use or otherwise any portion of the amount of service tax or penalties collected under this Act;
(ii)
otherwise than in good faith, demands from any person an amount in excess of any assessment of service tax due and payable, or penalties payable, under this Act;
92
(iii)
submits any false return, statement or report, whether in writing or otherwise, of the amount of service tax or penalty collected or received by him under this
Act; or
(iv)
defrauds any person, embezzles any money, or otherwise uses his position so as to deal wrongfully either with the Director General or any other individual; or
(b)
not being authorized under this Act who collects or attempts to collect any service tax or penalty under this Act, commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Obstruction
Section 77
Any person who in any way obstructs, assaults or hinders any proper officer of service tax in the discharge of his functions under this
Act commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding one hundred thousand ringgit or to both.
Section 78
Offences by company, etc.
(a)
may be charged severally or jointly in the same proceedings with the company, limited liability partnership, firm, society or other body of persons; and
(b)
if the company, limited liability partnership, firm, society or the body of persons is found guilty of the offence, shall be deemed to be guilty of that offence unless, having regard to the nature of his functions in that capacity and to all circumstances, he proves—
(i)
that the offence was committed without his knowledge; or
(ii)
that the offence was committed without his consent or connivance and that he had taken all reasonable precautions and exercised due diligence to prevent the commission of the offence.
(2)
Where any person is liable under this Act to any punishment or penalty for any act, omission, neglect or default, such person shall be liable to the same punishment or penalty for every such act, omission, neglect or default of the person’s employee or agent, or of the employee of the person’s agent, if the act, omission, neglect or default was committed—
(c)
by the employee of that person’s agent when acting in the course of his employment by the person’s agent or otherwise on behalf of the person’s agent acting on behalf of that person.
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General penalty
Section 79
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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.
Section 80
Compounding of offences
(a)
any offence under this Act or any regulations made under this Act as an offence which may be compounded;
(2)
Any senior officer of service tax may, with the consent in writing of the Public Prosecutor, at any time before a charge is being instituted, compound any offence prescribed as an offence which may be compounded by making a written offer to the person reasonably suspected of having committed the offence to compound the offence upon payment to the Director General of a sum of money not exceeding fifty per centum of the amount of the maximum fine to which the person would have been liable to if he had been convicted of the offence, within such time as may be specified in the written offer.
(3)
An offer under subsection (2) may be made at any time after the offence has been committed but before any prosecution for it has been instituted, and where the amount specified in the offer is not paid within the time specified in the offer, or such extended time as the
Director General may grant, prosecution for the offence may be instituted at any time after that against the person to whom the offer was made.
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(4)
Where an offence has been compounded under subsection (2), no prosecution shall be instituted in respect of the offence against the person to whom the offer to compound was made, and any document or thing seized in connection with the offence may be released by the
Director General, subject to such terms as the Director General thinks fit.
(5)
All sums of moneys received by the Director General under this section shall be paid into and form part of the Consolidated Fund.
Review and appeal
Section 81
(2)
An application for review under subsection (1) shall be made in the form and manner as determined by the Director General.
(3)
Where an application for review has been made under subsection (1), the Director General shall make the review and notify the decision of the review to the person, where practicable, within sixty days from the date of the receipt of such application.
(5)
Any person aggrieved by any decision of the Director General under subsection (3) or any other provision of this Act, except any matter relating to compound, may appeal to the Customs Appeal
Tribunal in writing within thirty days from the date of notification of the decision to the aggrieved person.
(6)
Any service tax due and payable under this Act shall be paid notwithstanding any review or appeal has been made under this section.
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(7)
This section shall not apply to a foreign registered person.
Liquidator of company to give notice of winding-up, and set aside service tax
Section 82
(a)
give notice of the winding up of the company to the Director
General within fourteen days after the resolution is effective or order is made;
(b)
before disposing of any of the assets of the company, set aside such sum out of the assets as appears to the Director
General to be sufficient to provide for any service tax that is or will thereafter become due and payable in respect of the company; and
(2)
A liquidator of any company referred to in subsection (1) who fails to give notice to the Director General within the time specified in paragraph (1)(a) or fails to provide for payment of the service tax as required under paragraph (1)(c) shall be personally liable for any service tax that is or will become due and payable as aforesaid.
(3)
Any liquidator who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit.
(4)
Where two or more persons are appointed as liquidators or are required by law to carry out the winding-up of the company referred to in subsection (1), the obligations and liabilities attaching to a liquidator under this section shall attach to all such persons jointly and severally, subject to a right of contribution between themselves as in cases of contract.
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(5)
This section shall not apply to a foreign registered person.
Appointment of receiver to be notified to Director General
Section 83
(2)
Any receiver appointed under subsection (1) who fails to give notice to the Director General within the time specified in subsection (1) or fails to provide for the payment of the taxable service tax as required under that subsection shall be personally liable for any service tax that is or will become due and payable as aforesaid.
(3)
Any receiver who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit.
(4)
Where two or more persons are appointed receivers, the obligations and liabilities attaching to a receiver under this section shall attach to all such persons jointly and severally, subject to a right of contribution between themselves as in cases of contract.
(5)
This section shall not apply to a foreign registered person.
Registered person to submit audit certificate
Section 84
(2)
This section shall not apply to a foreign registered person.
Service tax, etc., to be payable notwithstanding any proceedings, etc.
Section 85
The institution of proceedings or the imposition of a penalty, fine or term of imprisonment under this Act or the compounding of an offence under section 80 shall not relieve any person from the liability to pay for any service tax, surcharge, penalty, fees or other money under this Act.
Section 86
Service of notices, etc.
(2)
The notice, direction or other document sent by registered post to a person shall be deemed to have been served on that person at the time at which it would have been delivered to that person in the ordinary course of the post if such notice, direction or other document was addressed—
(a)
in the case of a company, limited liability partnership, firm, society or other body of persons—
(i)
to its registered office;
(3)
Where a person has given his consent for a notice to be served on him through the electronic service, the notice shall be deemed to have been served at the time when the electronic notice is transmitted to his account through the electronic service.
(4)
This section shall not apply to a foreign registered person.
Service of summons
Section 86A
Act to be served on any person may be served—
(a)
by delivering the summons to the person or any adult member of his family or any of his servants residing with him at his usual or last-known place of residence;
(b)
by leaving the summons at his usual or last-known place of residence or business in an envelope addressed to the person;
(c)
by sending the summons by registered post addressed to the person at his usual or last-known place of residence or business; or
(d)
where the person is a company, a limited liability partnership, a firm, a society, an association or other body of persons—
(i)
by delivering the summons to the secretary or other like officer of the company, limited liability partnership, firm, society, association or other body
100
of persons at its registered office or principal place of business; or
(ii)
by sending the summons by registered post addressed to the company, limited liability partnership, firm, society, association or other body of persons at its registered office or principal place of business.
(2)
Any summons sent by registered post to any person in accordance with subsection (1) or by delivering the summons to the person or to any adult member of his family or any of his servant residing with him shall be deemed to be duly served on the person.
(3)
When a summons issued by a court is served, an affidavit of the service purporting to be made before an officer duly authorized to administer an oath shall be admissible in evidence.
Use of electronic service
Section 87
(a)
the filing or furnishing of any application, return, declaration or any other document; and
(b)
the service of any notice, direction, order, permit, receipt or any other document.
(2)
Where an electronic notice is made and transmitted to the
Director General, the Director General shall not be liable for any loss or damage suffered by the registered user by reason of any error or omission of whatever nature or however arising appearing in any electronic notice obtained by the registered user under the electronic service if the error or omission was made in good faith and in the ordinary course of the discharge of the duties of the Director General or occurred or arose as a result of any defect or breakdown in the
Service Tax 101
electronic service or in the equipment used for the provision of the electronic service.
(3)
Any electronic notice made and transmitted by the registered user shall be deemed to have been filed, furnished or served at the time the electronic notice is received by the Director General.
(4)
For the purposes of this section, “registered user” means any person who is authorized in writing by the Director General to gain access to and use the electronic service.
Protection of officer of service tax from liability
Section 88
No officer of service tax or other person employed by the
Government in the course of carrying out his duties under this Act shall be liable to make good any loss sustained in respect of any goods, documents, articles or things by fire, theft, damage or other causes while the goods, documents, articles or things in the lawful custody or control of the officer or other person employed by the Government in the course of carrying out his duties under this Act unless the loss is caused by his wilful neglect or default.
Section 89
Rewards
The Director General may order such rewards as he may deem fit to be paid to any officer of service tax or other person for services rendered in connection with the detection of any offences against this
Act.
Section 90
Power of Director General to charge fees
The Director General may charge such fee as he may consider reasonable in respect of any service rendered by him or any officer of service tax—
Section 90A
Where, by this Act, a period is specified within which an act or thing is to be done by a person, and the Minister is satisfied that the act or thing could not be completed in that period due to the occurrence of public emergency or public health crisis, the Minister may, upon such terms and conditions as the Minister thinks fit, extend the period for the completion of the act or thing before the expiration of the period.
Section 90B
Power to modify terms and conditions
(2)
Before modifying the terms and conditions, notice must be given to the person bound by the terms and conditions stating—
(3)
The modified terms and conditions shall not take effect in less than fourteen days from the date the notice is issued under subsection (2).
(4)
For the purposes of this section, “modify” means add to, delete or vary.
Service Tax 103
Power to make regulations
Section 91
(2)
Without prejudice to the generality of subsection (1), Minister may prescribe—
(d)
all matters relating to furnishing returns, declarations and payment of service tax;
(3)
Any regulations made under this section may prescribe an act or omission in contravention of the regulations to be an offence and may prescribe penalties of a fine not exceeding thirty thousand ringgit or to imprisonment for a term not exceeding two years or both for such offence.
Part XIII
PART XIII
SAVINGS AND TRANSITIONAL
Registration on the commencement date
Section 92
(2)
The Director General shall register the person referred to in subsection (1) with effect from the first day of the month following the month in which the application is made and the person shall charge the service tax on the taxable service provided by the person with effect from such day.
(3)
Any person who provides services before the effective date which services are taxable services on the effective date and has made an application before the effective date to the Director General to be registered as a registered person under this Act—
(a)
shall be deemed to have been registered in accordance with section 13 on the effective date, if there are reasonable grounds for believing that the total value of his taxable services provided in the month of the effective date and eleven months immediately succeeding that month will
Service Tax 105
exceed the amount of total value of taxable services as prescribed in subsection 12(1); and
(b)
shall charge the service tax on the taxable services provided by the person with effect from the effective date.
(4)
Any person who is registered under the Goods and Services Tax
Act 2014 before the effective date and provides taxable services on the effective date—
(a)
shall be deemed to have been registered in accordance with section 13 on the effective date, if there are reasonable grounds for believing that the total value of his taxable services provided in the month of the effective date and eleven months immediately succeeding that month will exceed the amount of total value of taxable services as prescribed in subsection 12(1); and
(b)
shall charge the service tax on the taxable services provided by the person with effect from the effective date.
Progressive or periodic agreement
Section 93
(2)
The services provided under subsection (1) shall be taken to be made continuously and uniformly throughout the period of that agreement.
(3)
Where the services referred to in subsection (1) is provided under a warranty whether expressed, implied or required by law and the value of the warranty is included in the value of the services
106
provided, no service tax shall be charged on the services provided under such warranty.
(4)
Subsections (1) and (2) shall not apply to a provision of services where goods and services tax under the Goods and Services Tax
Act 2014 has been paid on the services to the extent covered by the invoice.
Rights granted for life
Section 94
(a)
a registered person, who is a club or other similar body, provides taxable services under an agreement;
(b)
the agreement provides whether expressly or implicitly that a right is to be granted or exercisable for the rest of the person’s life or for a period of not less than thirty years; and
(2)
Where any payment for rights granted or exercisable for the rest of the person’s life or for a period of not less than thirty years is paid by existing or new members of a club or other similar body for any rights to use facilities of the club or other similar body, the provision of services on which any payment is made—
(b)
on or after the effective date, shall be chargeable to service tax.
Service Tax 107
Things done in anticipation of the enactment of this Act
Section 95
All acts and things done by or on behalf of the Director General in preparation for or in anticipation of the enactment of this Act and any expenditure incurred in relation thereto shall be deemed to have been authorized under this Act, provided that the acts and things done are consistent with the general intention and purposes of this Act, and all rights and obligations acquired or incurred as a result of the doing of those acts or things including any expenditure incurred in relation thereto shall upon the coming into operation of this Act be deemed to be the rights and obligations of the Director General.
108
Act 807
LIST OF AMENDMENTS
Amending law
Short title
In force from
Act 812
Finance Act 2018 01-01-2019
Act A1579
Service Tax (Amendment) Act 2018 02-01-2019
Service Tax (Amendment) Act 2019
Section 1
Para.
3(b), sections 4, 5 and 6, para. 16(a), (b) and
(e)
, sections 22, 23, 24
and 27, para. 28(a), sections 38, 39, 40,
41, 42, 43 and 49, and para. 50(a)—
01-09-2019;
Section 2
Section 2, para.
3(c), (e), and (f), sections 7, 8, 9, 10,
11, 12, 13, 14 and 15, para. 16(d), sections 17, 18, 19, and 20, para. 21(f), section 25
and 26, para. 28(b), sections 29, 30, 31,
32, 33, 34, 35, 36, 44,
45, 46, 47, and 48, para. 50(b), (c), and
(d)
, sections 51 and 52—01-10-2019;
Service Tax 109
Amending law
Short title
In force from
Section 3
Para. 3(a) and 3(d), and section 37—
01-01-2020
Service Tax (Amendment) Act 2020 01-01-2021
Act A1672
Service Tax (Amendment) Act 2022 01-01-2023
Act 851
Finance (No. 2) Act 2023 01-01-2024
exc. s.127;
30-12-2023
Act A1719
Service Tax (Amendment) Act 2024 01-12-2024
110
Act 807
LIST OF SECTIONS AMENDED
Section
Amending authority
In force from 1A
Act A1597 01-10-2019 2
Act 812
Act A1719 01-01-2019 01-09-2019;
01-10-2019;
01-01-2020 01-01-2021 01-01-2024 7
Act 812 01-01-2019 9
Act 812
Act A1597 01-01-2019 01-09-2019 10
Act 851 01-09-2019 30-12-2023 11
Act 812
Act A1597 01-01-2019 01-09-2019 12
Act A1597 01-10-2019 13
Act 851 01-10-2019 01-01-2024 14
Act 851 01-10-2019 01-01-2024 15
Act A1597 01-10-2019 16
Act A1597 01-10-2019 17
Act 851 01-10-2019 01-01-2024 18
Act A1632 01-10-2019 01-01-2021
Service Tax 111
Section
Amending authority
In force from 19
Act A1632 01-10-2019 01-01-2021 20
Act A1597 01-10-2019 20A
Act A1632 01-01-2021 21
Act A1597 01-09-2019;
01-10-2019 22
Act A1597 01-10-2019 23
Act A1597 01-10-2019 24
Act 812
Act A1597 01-01-2019 01-10-2019 25
Act A1597 01-10-2019 26
Act 851 01-09-2019;
01-10-2019 01-01-2024 26A
Act 812
Act 851 01-01-2019 01-09-2019 01-01-2024 27
Act 812
Act A1632 01-01-2019 01-09-2019 01-01-2021 27A
Act A1597 01-09-2019 28
Act A1597 01-10-2019 29
Act A1597 01-10-2019 31
Act A1632 01-09-2019 01-01-2021 32
Act A1632 01-09-2019;
01-10-2019 01-01-2021 34
Act A1597 01-10-2019 34A
Act A1632 01-01-2021 35
Act A1597 01-10-2019 36
Act A1597 01-10-2019 38
Act 851 01-01-2024 38A
Act A1672 01-01-2023
112
Section
Amending authority
In force from 39
Act 851 01-10-2019 01-01-2024 40
Act A1632 01-10-2019 01-01-2021 40A
Act A1597 01-10-2019 42
Act 851 01-01-2024 46A
Act A1597 01-10-2019 51A
Act A1597 01-01-2019
Part IXA
Act A1597 01-01-2020 56A
Act A1579
Act A1672 02-01-2019 01-01-2020 01-01-2021 01-01-2023 56B
Act A1597 01-01-2020 56C
Act 851 01-01-2020 01-01-2024 56D
Act A1672 01-01-2020 01-01-2023 56E
Act A1672 01-01-2020 01-01-2023 56F−56K
Act A1597 01-01-2020 56GA
Act A1632 01-01-2021 56H
Act 851 01-01-2021 01-01-2024 62
Act A1632 01-01-2021 62A
Act A1632 01-01-2021 63A
Act A1632 01-01-2021 63B
Act A1632 01-01-2021 65
Act A1597 01-09-2019 65A
Act A1632 01-01-2021 68
Act A1597 01-09-2019 69A
Act A1597 01-09-2019 71
Act A1597 01-09-2019
Service Tax 113
Section
Amending authority
In force from 73A
Act A1632 01-01-2021 75
Act 851 01-09-2019 01-01-2024 76
Act A1597 01-09-2019 81
Act 851 01-10-2019 01-01-2024 82
Act A1632 01-10-2019 01-01-2021 83
Act A1632 01-10-2019 01-01-2021 84
Act A1597 01-10-2019 86
Act A1597 01-10-2019 86A
Act A1597 01-09-2019 90A
Act A1672 01-01-2023 90B
Act A1672 01-01-2023 91
Act 851 01-09-2019;
01-10-2019 01-01-2024
Common questions
- What is SERVICE TAX ACT 2018?
- *SERVICE TAX ACT 2018 is Malaysia Act, cited as Act 807 2018, currently marked in force and first recorded in 2018.
- Is SERVICE TAX ACT 2018 still in force?
- Yes — SERVICE TAX ACT 2018 is currently in force.
- When did SERVICE TAX ACT 2018 take effect?
- SERVICE TAX ACT 2018 was first recorded in 2018.
- How many sections does SERVICE TAX ACT 2018 have?
- SERVICE TAX ACT 2018 contains 127 sections.
- Where can I read the official version of SERVICE TAX ACT 2018?
- The official text of SERVICE TAX ACT 2018 is published at lom.agc.gov.my.