The Ministry of Finance (MOF) has, in a letter to the Director General of the Customs and Excise, dated 14 November 2011, invoked Section 6 of the Service Tax Act, 1975 to exempt Service Tax under the following circumstances:
(a) Exemption of Service Tax with effect from 1 January 2012
(i) All taxable services provided by persons in Free Zones and supplied to persons in Free Zones
(ii) All taxable services provided by persons in Free Zones and supplied to persons in Principal Customs Area
(iii) All taxable services provided by persons in Principal Customs Area and supplied to persons in Free Zones
(iv) All taxable services provided by persons in Principal Customs Area or Free Zones in relation to matters in Langkawi, Tioman, Labuan and Joint Development Areas.
(b) Refund of Service Tax Paid
In connection with (a) above, where the tax charged has been paid before 1 January 2012, any application for service tax refund will not be approved.
(c) Remission of Service Tax Uncollected
Any service tax, in respect of the services mentioned in (a) above, which has not been collected before 1 January 2012, is remitted under Section 22 of the Service Tax Act, 1975
(d) Services Not Subject to Service Tax
(i) All taxable services provided by persons in Free Zones and supplied to persons in Langkawi, Tioman, Labuan and Joint Development Areas, and
(ii) All taxable services provided by persons in Principal Customs Area and supplied to persons in Langkawi, Tioman, Labuan and Joint Development Areas
(e) Exemption Granted Until the Introduction of Goods and Services Tax.
Meanwhile, members view the MOF letter on our website. You may also get further information on the matter from the Royal Malaysian Customs website soon.
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