LAWS OF MALAYSIA REPRINT Act 151 SERVICE TAX ACT 1975 Incorporating all amendments up to 1 January 2006 PUBLISHED BY THE COMMISSIONER OF LAW REVISION, MALAYSIA UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968 IN COLLABORATION WITH PERCETAKAN NASIONAL MALAYSIA BHD 2006 Laws of Malaysia 2 ACT 151 SERVICE TAX ACT 1975 Date of Royal Assent ... ... ... ... 30 January 1975 Date of publication in the Gazette ... 30 January 1975 PREVIOUS REPRINTS First Reprint ......... ... ... 1997 Second Reprint ......... ... ... 2001 Service Tax 3 LAWS OF MALAYSIA Act 151 SERVICE TAX ACT 1975 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title, application and commencement 2. Interpretation PART II CHARGE TO TAX 3. Charge to tax 4. Determination of charge and value 5. Rate of tax 6. Powers of Minister to exempt and refund PART III TAXABLE PERSONS--LICENSING 7. Person chargeable to tax 7A. Direction to treat persons as a single taxable person Application for licence, issue, etc. 8. 8A. Voluntary licensing 9. Surrender and revocation of licences PART IV INVOICES, RECORDS, RETURNS AND ASSESSMENT 10. Invoices and receipts Laws of Malaysia 4 ACT 151 Section 10A. Production of invoices or receipt by computer 11. Duty to keep records 12. Furnishing of returns 13. Assessment of tax PART V COLLECTION, RECOVERY, REFUND AND REMISSION 14. When tax becomes due and payable 15. Recovery of tax 16. Penalty for late payment of tax Joint and several liability of directors, etc. 17. 18. Persons about to leave Malaysia 18A. Recovery of service tax, etc., from persons leaving Malaysia Power to collect service tax, etc., from person owing money to taxable 19. person Payment of service tax, etc., short paid or erroneously refunded and 20. payment by instalments 21. Return of service tax or penalty overpaid or erroneously paid 21A. Deduction from return of refunded service tax 21B. Refund for bad debt 21C. Repayment of refund 22. Remission PART VI INSPECTION, SEARCH, SEIZURE AND ARREST 23. Persons bound to give information Access to buildings, places, books, etc. 24. 25. Magistrate may issue search warrant 26. When search may be made without warrant 26A. Access to recorded information or computerized data Seizure of books, documents, etc. 27. 28. Power of arrest Service Tax 5 PART VII OFFENCES Section Failure to comply with notice, etc. 29. 30. Penalty for incorrect return 31. Penalty for charging or collecting service tax by non-taxable person 32. Penalty for evasion of service tax 33. Attempts and abetments 34. General penalty 35. Offences by corporate bodies PART VIII PROVISIONS AS TO TRIALS AND PROCEEDINGS (Deleted) 36. 37. Sessions Court to have jurisdiction 37A. Obligation of secrecy 38. Protection of informers from discovery 39. Compounding of offences 40. Conviction under other law 40A. Court order PART IX REGULATIONS 41. Regulations PART X ADMINISTRATION AND MISCELLANEOUS MATTERS 42. Functions and powers of Director General and other officers 43. Officers to be public servants Authority cards, etc., to be produced 44. 45. No costs or damages arising from seizure to be recoverable unless seizure without reasonable or probable cause Laws of Malaysia 6 ACT 151 Section Service of notices, etc. 46. 47. Clerks and servants may transact business 47A. Transaction of business on behalf of taxable person 48. Rewards 49. Forms to be used 50. Disputes and appeal 51. Liquidator of company to give notice of winding up, and set aside tax 52. Appointment of receiver to be notified to the Director General Service Tax 7 LAWS OF MALAYSIA Act 151 SERVICE TAX ACT 1975 An Act to make provision for the charging, levying and collecting of service tax. [1 March 1975, P.U. (B) 52/1975] BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows: PART I PRELIMINARY Short title, application and commencement 1. (1) This Act may be cited as the Service Tax Act 1975 and shall apply throughout Malaysia excluding Langkawi, Labuan and Tioman. (1A) This Act shall not apply to the area known as the Joint Development Area. (2) This Act shall come into force on such date as the Minister may by notification in the Gazette appoint. Interpretation 2. (1) In this Act, unless the context otherwise requires-- "calendar month" means a month reckoned according to the Gregorian calendar; "computer" has the meaning assigned thereto in section 3 of the Evidence Act 1950 [Act 56]; "Customs" means the Royal Customs and Excise Department; Laws of Malaysia 8 ACT 151 "Director General" means the Director General of Customs and Excise, appointed under subsection 3(1) of the Customs Act 1967 [Act 235]; "document" has the meaning assigned thereto in section 3 of the Evidence Act 1950; "electronic data interchange" means the transfer, from computer to computer, of commercial and administrative transactions using an agreed message standard to structure the data pertaining to a transaction; "goods" includes every kind and type of food, drink or thing whatsoever; "Joint Development Area" has the meaning assigned thereto in section 2 of the Malaysia-Thailand Joint Authority Act 1990 [Act 440]; "Labuan" means the Island of Labuan and its dependent islands, namely, Rusukan Besar, Rusukan Kecil, Keraman, Burong, Papan and Daat; "Langkawi" means Langkawi Island and all adjacent islands lying nearer to Langkawi Island than to the mainland; " M i n i s t e r " means the Federal Minister charged with the responsibility for finance; "penalty" means any charge due and payable under section 16; "person" includes an individual, a firm, a society, an association, a company and every other juridical person; "prescribed" means prescribed by regulations made under this Act; "proper officer" means any officer acting in the fulfilment of his duties under this Act, whether such duties are assigned to him specially or generally, or expressly or by implication; "regulations" means regulations made under this Act; "senior officer of customs" means any senior officer of customs as defined in subsection 2(1) of the Customs Act 1967; Service Tax 9 "surcharge" means any charge that is due and payable under subsection 20(3); "taxable period" means, subject to subsection 12(2), two calendar months or part thereof ending on the last day of the second calendar month; "taxable person" means any person who is prescribed to be a taxable person; "taxable service" means any service which is prescribed to be a taxable service; "Tioman" means the Island of Tioman and the islands of Soyak, Rengis, Tumok, Tulai, Chebeh, Labas, Sepoi and Jahat. (2) (Deleted by Act A1182). 2A. For the purposes of this Act, a free zone shall be deemed to be a place outside Malaysia. In this section, the expression "free zone" has the same meaning a s s i g n e d to it under section 2 of the Free Zones Act 1990 [Act 438]. PART II CHARGE TO TAX Charge to tax 3. Service tax shall be charged and levied in accordance with this Act on any taxable service provided by any taxable person. Determination of charge and value 4. For the purposes of this Act, the charge, premium or value on which service tax is payable shall be ascertained as follows: (a) in the case of taxable service for the-- (i) sale of goods by a taxable person to-- (A) a person independent of the taxable person, the actual price for which the goods are sold; or Laws of Malaysia 10 ACT 151 (B) a person not independent of the taxable person, the price at which the goods would have been sold in the ordinary course of business to a person independent of the taxable person; (ii) provision of goods, where no charge is levied for the provision of the goods, the price at which the goods would have been sold in the ordinary course of business to a person independent of 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 independent of the taxable person-- (A) the charge levied or collected; or (B) the premium for insurance coverage, for the taxable service; (ii) provided by a taxable person to a person not independent of the taxable person, the charge or premium levied or collected for the taxable service which would have been provided in the ordinary course of business to a person independent of the taxable person; (iii) where no charge or premium is levied or collected, the charge or premium which would have been levied or collected in the ordinary course of business for providing taxable service to a person independent of the taxable person. Rate of tax 5. (1) The Minister may by order published in the Gazette fix the rate of service tax to be charged and levied under this Act. (2) The Minister may from time to time by order published in t h e Gazette vary or amend the rate of tax fixed under subsection (1). Service Tax 11 (3) Any order made under subsections (1) and (2) shall at the next meeting of the House of Representatives be laid on the table of that House and shall, at the expiration of one hundred and twenty days of being so laid or of such extended period as the House of Representatives may by resolution direct, cease to have effect if and insofar as it is not confirmed by resolution passed by the House of Representatives within the said one hundred and twenty days or, if such period has been extended, within such extended period. (4) Where an order ceases to have effect in whole or in part as provided in subsection (3), then any service tax levied in pursuance of such order or, as the case may be, of such part thereof as ceases to have effect shall, subject to the provisions of subsection (5), be repayable to the person by whom such service tax was paid. (5) Except otherwise directed by the Minister no service tax repayable under the provisions of subsection (4) shall be repaid, unless the person entitled to such repayment makes a claim thereof to the Director General within one year from the date on which the order ceases to have effect in whole or in part as provided by subsection (3); and such claim shall be made in writing and shall contain such particulars as the Director General may by order require. Powers of Minister to exempt and refund 6. The Minister may, in any particular case, subject to such conditions as he may deem fit to impose-- (a) exempt any person or class of persons from the payment