Malaysia’s government abolished the GST Act, and from September 2018, the new Sales & Service Tax (SST) regulation is in force. In line with the new regulation requirements, organizations need to submit (quarterly) returns. Recently, MySST introduced new tax reporting requirements for the submitting the ‘sales tax exemption’ report (Schedule C) for all the raw pack items used in the manufacturing process for which organizations claim tax exemptions.

The government prescribed it in a specific format listing down the inventory flow of such items starting from Name of Supplier, Opening stock (Qty & Value), Local purchase, Imported purchase, Used in Mfg, Sold/Others, and finally the closing stock. To comply with these tax rules, company’s often implemented a time-consuming manual process. Not meeting the requirements could result in substantial tax penalties.

KGT developed a fully automated SAP add-on solution to manage these ‘sales tax exemption’ between the various stakeholders. The SAP add-on arranges that whenever any new product comes in, the warehouse personnel notify the business to get the exempt certificate. Upon receiving the notification, business users check whether the certificate is applicable or not. When appropriate, relevant data is collected, and information is filed in the MySST portal to get the exempt certificate. If the warehouse users do not notify, it becomes a tiresome process for the business to get the exempt certificate, and the tax authorities could levy substantial tax penalties. That is what the SAP add-on avoids.

The SAP add-on facilitates the process of viewing and assessing the certificate details effectively. The user can add, via a straightforward process, new certification details. The warehouse personnel does no longer need to send the details of the ‘goods receipt’. If the certificate details are not maintained, the add-on will automatically notify the business. The timely involvement avoids substantial tax penalties.

Source: KGT