©CCH Malaysia GST and SST Tracker – 12 April 2022

The Royal Malaysian Customs Department (RMCD) has recently issued sales tax policy no 1/2022 on 5 April 2022 on the conditions to qualify for sales tax exemption on pallets.

The policy is currently only available in the Malay language version. The policy clarifies the following:

  • • Registered manufacturers or agents appointed by a registered manufacturer for import or purchase of pallets used as material packaging in manufacturing are eligible for exemption of sales tax under item 1 or Item 3, Schedule C, Sales Tax Order (Persons Exempted From Tax Payment) 2018.
  • • Pallets imported or purchased with sales tax exemption under item 1 or 3, Schedule C of the Sales Tax Order (Persons Exempted From Tax Payment) 2018 should be:
    • – used as a material packaging of finished goods exported
    • – sold and not returned to the registered manufacturer
    • – should not be the property of the buyer.
  • • Pallets used for the purpose of:
    • – transporting goods
    • – reusable or reinstated to the registered manufacturer are not categorised as packaging material and not eligible for sales tax exemption under item 1 or 3, Schedule C of the Sales Tax Order (Persons Exempted From Tax Payment) 2018. Sales tax should be paid when the pallets are imported or purchased.
  • • Pallets used for the purpose of transporting exported goods and then re-imported are eligible for sales tax exemption under item 39, Schedule A, Sales Tax Order (Person Who Exempted From Tax Payment) 2018 during the pallet re-imported.

Source: ©CCH Asia Pacific, Dasar Cukai Jualan Bil. 1/2022, Royal Malaysian Customs Department Website,5 April 2022, accessed 12 April 2022.