Understanding SST

What is SST?

Replacing Goods and Services Tax (GST), Sales and Service Tax (SST) has been implemented since September 2018. The SST comprises of these two key elements, which are

  • Sales Tax, a single stage tax levied on imported and locally manufactured goods, either at the time of importation or at the time the goods are sold or otherwise disposed of by the manufacturer.
  • Service Tax, Service tax that is a tax charged and levied on taxable services provided by any taxable person in Malaysia in the course and furtherance of business.

Who can be taxed?

The businesses that perform their activities in Malaysia and internationally will have to pay SST if they exceed a particular annual income threshold. The current threshold is set at an amount of RM500,000.

The threshold for operators of restaurants, cafes, bars, canteens, or any food and beverage business is subject to RM 1,500,000.

The businesses already registered with the GST don't need to register again for SST(Sales and Service Tax). Their data will be transferred to create the SST Malaysia registration. The overall registration process is straightforward as it is an online procedure.

How to know if my business is liable to register for SST? 

To be liable to register for SST, your business should fulfil these few criteria :

  • For Sales tax, your business is categorized under the manufacturing industry for taxable goods and total sales value of taxable goods in the past 12 months exceeds RM500,000.
  • For Service Tax, your business involved in service provider of taxable services and total value of your taxable services in the past 12 months exceeds RM500,000 with some exceptions. 
Click here to see if you are eligible for SST.

SST Rates

In general, Sales Tax is an ad valorem tax (based on the assessed value) and different rates apply based on group of taxable goods while Service Tax's rate is 6% for all taxable services except for the provision of charge or credit card services.

What are the different types of  SST rates in Malaysia

Sales tax @ 5 %

Products charged with a tax rate of 5% are petroleum oils, construction materials, timepieces, cod liver oil, telecommunications, foodstuffs, IT, and printing materials and hardware. The tax rate for petroleum and oil are subject to high quantity-based rates.

Sales Tax @ 10% 

On any taxable goods and imported taxable goods in Malaysia, a single-stage sales tax is charged by the registered manufacturers. In Malaysia the sales tax charged at 10% is the default sales tax rate.

Service Tax @ 6%

The services include car hire, accommodation, hotel, repair rental, domestic flight, insurance, restaurants, electricity, legal accounting, telecoms, business consulting services, and digital supplies.


The main difference between zero-rated and exempted goods is that the zero-rated are taxable supplies taxed at the SST 0% rate, whereas exempted goods are non-taxable and not subject to SST.

For any listed products as zero-supplies, the company can claim an input tax credit for the materials used to build the supplies. Examples of zero-rated supplies are raw food, sugar, water, and utilities. 

Click here to see Proposed Sales Tax for Various Goods.

Please note that services that are imported and exported are exempted.

However, digital services provided but foreigners to consumers in Malaysia exceeding RM 500,000 per year will have to register for Service Tax from the start of 1 January 2020. 

What is the Tariff Code

A tariff code is a code where each product is tagged that is involved in global trading. It is a product-specific code, as stated in the Harmonised System(HS) maintained by the World Customs Organisation(WCO).

For tax purposes, the tariff codes are required on all official shipping documents to ensure a worldwide product classification uniform.

The complete tariff code length is no less than six digits and can be up to ten also. When there are more digits in a tariff code string, the more specific it identifies the product. In the HS (Harmonised System), a series of fewer than six digits is considered a partial tariff code representing a broad category of product or chapter.

Click here to get the Tariff codes as per product classification.

SST Registration

You can complete the registration the Sales and Service Tax registration via online on the MySST website. The dateline for SST registration is the last date of the month, following the month in which the total sales value has exceeded or estimated to exceed the threshold.

31 July 2021 – Total sales value of taxable goods or services exceed the threshold
31 August 2021 – Due date for registration
1 September – Effective date to register

Note: if you are not liable from Sales Tax Order 2018, an application for exemption should be made as well through MySSM website

How to make SST payment

There are two possible ways to pay SST, which are:
  • Via electronic banking
  • Check / bank draft (posted to Customs Processing Centre)
Note: Post-dated check are not allowed. 

When and How to file SST return

Since the taxable period of SST is bi-monthly (period of 2 calendar months), you should file SST returns every two months even though there is no tax to paid during those months. You should also make payment within 30 days from the end of taxable period.

To file the SST return, you can do it online (CJP system or you can directly download the SST-02 form from MySST portal and mail it to the Customs Processing Centre (CPC). 

What are the possible SST penalties

In the case of failure or late SST registration

As the SST can no longer be collected from the customers, business owners must pay the SST according to the due date.

Failure to file SST returns

A fine of maximum RM50,000 or imprisonment up to 3 years or both, can be imposed to the taxable person upon conviction.

Failure to make SST payment 

A fine of maximum RM50,000 or imprisonment up to 3 years, or both can be imposed to the taxable person once convicted.

Note: Failure to file SST returns and Failure to make SST payment are two separate offences. 

Evasion of Tax

For premier offence: The taxable person can be fined up to 20 times of the Sales Tax amount and imprisonment for a maximum of 5 years, or both.
For subsequent offence: A fine of minimum of 20 times and maximum of 40 times of the Sales Tax amount can be faces by the taxable person, imprisonment up to 7 years or both. 

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