Sales Tax Act 2018 · Updated to 1 Jan 2025 · Part VI · Exemption, Refund, Drawback, Remission and Deduction
36. Claim for refund of sales tax in relation to bad debt
Feedback & supportAny person who is, or has ceased to be, a registered manufacturer may make a claim to the Director General for a refund of the whole or any part of any sales tax paid by him in respect of taxable goods if—
registered manufacturer
“registered manufacturer” means a manufacturer registered under section 13 or 14;
the whole or any part of the sales tax payable to such person has been written off in his accounts as bad debts; and
the Director General is satisfied that all reasonable efforts have been made by such person to recover the sales tax.
Where the person who makes a claim for a refund under subsection (1) in relation to bad debt—
has not received any payment in respect of the sale of taxable goods, such person may make a claim for a refund of the whole of the sales tax paid; or
has received any payment in respect of the taxable goods, such person may make a claim for the difference between the sales tax paid and the amount calculated in accordance with the following formula:
52 Laws of Malaysia ACT 806
A x C
B where
A is the payment received in respect of the sale of such taxable goods;
B is the sale value of such taxable goods plus sales tax payable on such taxable goods; and
C is the sales tax payable on such taxable goods.
The person referred to in subsection (1) may make a claim for a refund of the whole or any part of any sales tax in relation to the bad debt within six years from the date the sales tax is paid by him and the
Director General may refund the whole or any part of the sales tax after being satisfied that the person has properly established the claim.
Director General
“Director General” means the Director General of Customs and Excise appointed under subsection 3(1) of the Customs Act 1967;
For the purposes of this section, “bad debt” means an outstanding amount of the payment in respect of the sale of taxable goods including the sales tax which is due to a person who is, or has ceased to be, a registered manufacturer but has not been paid to, and is irrecoverable by, the person.
sale
“sale” includes barter, disposal of goods with a right of purchase or on terms providing that the seller retains an interest in the goods, and delivery of goods under any conditions as to future payment;