MIDA Tax Exemption Under Section 14 (2) Customs Act 1967 & Related SST Rules

29 Sep, 2021, Virtual Classroom Training

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P. Nadaraja was formerly with the Royal Malaysia Customs (1981-1997) as a Senior Officer of Customs having served in various units and his key areas of focus includes customs administration, import and export procedures, classification, valuation, licensing and compliance matters. He possesses an in-depth knowledge of various customs legislations including Customs Act, Sales Tax Act, Service Tax Act, Excise Act and other subsidiary legislations. He has vast experience in Customs matters and has been a guest lecturer at the Royal Malaysia Customs Academy in Malacca on various occasions to deliver lectures on various aspects of Customs laws and procedures.

 

In 1997 he left the Customs Department on optional retirement for private practice as an Advocate and Solicitor. He is now involved in legal practice and at the same a time is actively involved in conducting seminars and workshops on customs matters. He has also conducted in house training for various companies including government and statutory bodies and has advised and consulted upon by companies on issues such as customs and sales tax valuation, classification, service tax matters, drawback, refunds, exemptions and others. He was officially appointed by the Customs Department to conduct Basic Customs Course for forwarding agents during the year 2005 – 2007.

 

He is also an Associate of the Malaysia Institute of Chartered Secretaries and Administrators and an Associate Member of Chartered Tax Institute of Malaysia (ACTIM) and is currently involved in customs litigation in subordinate and High Courts and renders consultancy and advisory services on Customs matters to various companies.

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Juliany,
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juliany@ipa.com.my

Michelle,
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michelle@ipa.com.my 

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Yvonne,
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yvonne@ipa.com.my

ADDRESS 
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FOCUSING ON
  • Overview Of Tax Incentives / Exemptions Under Customs Legislations
  • Introduction To MIDA Exemption And Sectors Eligible For MIDA Tax Exemption
  • Person Qualified For Exemption
  • Guidelines On Tax Exemption For Manufacturing Sector:
  • Changes In Tax Exemption Policy
  • Types Of Tax Exemption
  • Application Procedures For Tax Exemption (Form SPM / SPM1)
  • Conditions Imposed By MIDA And RMCD On Tax Exemptions
  • Implementation, Enforcement & Supervisions By RMCD
  • Responsibilities Of Exemption Holders
  • Common Mistake Of Non-Compliance By Exemption Holders
  • Claims For Tax Exemptions Under Customs Duties (Exemption) Order 2017 And Sales Tax (Persons Exempted From Payment Of Tax) Order 2018
  • Miscellaneous Treatment By Exemption Holders
  • Brief Outline On Sales Tax Concept
  • Application For Sales Tax Exemption
  • Sales Tax Exemption On Subcontract Works & Related Procedures
  • Offences & Penalties Related To Exemptions
  • Remission Of Customs Duty And Sales Tax
  • Review And Appeal Procedures Under Customs And Sales Tax Act
OBJECTIVES

The Royal Malaysian Customs Department (RMCD) provides various tax incentives to the business community to lower their cost of doing business in Malaysia and in order to be competitive globally. The manufacturing sector in particular is granted tax exemptions under the Customs Act 1967 and Sales Tax Act 2018 on imported and locally purchased raw materials / components, packing / packaging materials, manufacturing aids, machineries, equipment & spare parts used in the manufacturing process.

 

This course caters primarily for manufacturers registered under the Sales Tax Act 2018 and non-registered manufacturers located in Free Industrial Zone (FIZ), Licensed Manufacturing Warehouse (LMW) and manufacturers of non-taxable products. Participants will be updated on the latest customs and sales tax amendments in particular on sales tax exemptions.

AFTER ATTENDING THIS COURSE YOU WILL RETURN TO YOUR JOB…
  1. Understanding the guidelines, regulations and procedures related to duty / tax exemption on raw materials / components and machinery / equipment;
  2. Knowing the self-declaration mechanism applicable to sales tax exemption on purchase of machinery, equipment and spare parts used in manufacturing.
  3. Understanding the application of Approved Major Exporter Scheme (AMES) on acquisition of raw materials, components, packing and packaging materials by non- registered manufacturers.
  4. Understanding claiming of tax exemptions under Customs Duties (Exemption) Order 2017 (CDEO 2017) and Sales Tax (Persons Exempted From Payment of Tax) Order 2018.
  5. Learning the treatment of sales tax on sales to PCA / LMW / FIZ / DA / Overseas under Sales Tax Act 2018;
  6. Knowing the application for sales tax exemption under Schedule A, B & C of the Sales Tax (Persons Exempted From Payment of Tax) Order 2018 (STEO 2018).
WHO SHOULD ATTEND
This course is suitable for Manufacturers (Registered And Non-Registered), Forwarding Agents, Logistics Companies And Accounting / Finance Managers.
METHODOLOGY
Interactive Lectures, Discussions and Q & A Sessions.
COURSE OUTLINE
9:00

OVERVIEW OF TAX INCENTIVES / EXEMPTIONS UNDER CUSTOMS LEGISLATIONS

 

INTRODUCTION TO MIDA EXEMPTION AND SECTORS ELIGIBLE FOR MIDA TAX EXEMPTIO

 

PERSON QUALIFIED FOR EXEMPTION

  • Manufacturers registered under the Sales Tax Act 2018
  • Non registered manufacturers (LMW, FIZ and manufacturers of non-sales taxable goods)
 

GUIDELINES ON TAX EXEMPTION FOR MANUFACTURING SECTOR:

  • Raw materials / Components & Machinery / Equipment eligible for tax exemption
  • Criteria for Tax Exemption
 

CHANGES IN TAX EXEMPTION POLICY

  • Drawback facilities for export oriented industries
  • Exemption for Iron & Steel Industry
  • Tax Exemption for non-registered manufacturers under Schedule B, Sales Tax (Persons Exempted From Tax) Order 2018
10.45

TYPES OF TAX EXEMPTION:

  • Import duty exemption on raw materials / components granted by Ministry of Finance/ (MIDA)
  • Import duty exemption on machinery / equipment approved by RMCD based on Letter of Confirmation from MIDA.
  • Drawback Facility for export orientated industry.
  • Import duty exemption on importation of raw materials listed in Item 105 & 106, CDEO 2017 for manufacturer licensed under Industrial Coordination Act 1975
  • Import Duty Exemption under Item 99 CDEO 2017 for Iron & Steel Products.
  • Category of manufacturers qualified under Schedule B, Sales Tax (Persons Exempted From Payment of Tax) Order 2018
 

APPLICATION PROCEDURES FOR TAX EXEMPTION (FORM SPM / SPM1)

 

CONDITIONS IMPOSED BY MIDA AND RMCD ON TAX EXEMPTIONS

 

IMPLEMENTATION, ENFORCEMENT & SUPERVISIONS BY RMCD

  • Visit & surprise check by senior officer of customs
  • Auditing of records & documents
  • Control of Importation pending MIDA exemption / Bank Guarantee.
  • Compliance with MIDA conditions.
  • Procedures as to Disposal of Scrap / Destruction Certificate.
 

RESPONSIBILITIES OF EXEMPTION HOLDERS

  • Submission of quarterly returns
  • Maintenance of Machinery & Equipment Inventory List
  • Maintenance of Records / Documents on Raw Material / Components and Finished Goods
1:00 Lunch
2.00

COMMON MISTAKE OF NON-COMPLIANCE BY EXEMPTION HOLDERS

 

CLAIMS FOR TAX EXEMPTIONS UNDER CUSTOMS DUTIES (EXEMPTION) ORDER 2017 AND SALES TAX (PERSONS EXEMPTED FROM PAYMENT OF TAX) ORDER 2018

  • Temporary Import / Export of Machineries / Equipment
  • Temporary Import / Export of Defective Goods
  • Compliance with Conditions
 

MISCELLANEOUS TREATMENT BY EXEMPTION HOLDERS

  • Winding up / Receivership / Liquidation of Exemption Holders
  • Accounting for Losses by Floods, Fire and Theft
  • Accounting for Subcontract
  • Drawback Facility under Customs Act 1967 and Sales Tax Act 2018
 

BRIEF OUTLINE ON SALES TAX CONCEPT

  • Single Stage Taxation
  • Concept of manufacture
  • Facilities / Incentives under Sales Tax Legislations
  • Treatment of Special Areas & Designated Areas
 

APPLICATION FOR SALES TAX EXEMPTION

  • Schedule A, Sales Tax (Persons Exempted From Payment of Tax) Order 2018
  • Schedule B, Sales Tax (Persons Exempted From Payment of Tax) Order 2018
  • Schedule C, Sales Tax (Persons Exempted From Payment of Tax) Order 2018
  • Sales Tax Exemption For Traders & Manufacturers under Approved Major Exporter Scheme (AMES)
3.45

SALES TAX EXEMPTION ON SUBCONTRACT WORKS & RELATED PROCEDURES

 

OFFENCES & PENALTIES RELATED TO EXEMPTIONS

  • Section 15, Customs Act 1967
  • Section 138, Customs Act 1967
  • Section 86 (1), Sales Tax Act 2018
  REMISSION OF CUSTOMS DUTY AND SALES TAX
  • Remission of duty / tax by the Director General of Customs
  • Remission of duty / tax by the Minister of Finance
  • Related provisions under Customs Act and Sales Tax Act
  REVIEW AND APPEAL PROCEDURES UNDER CUSTOMS AND SALES TAX ACT
  • Appeal to Director General of Customs
  • Appeal to Minister of Finance
  • Appeal to Customs Appeal Tribunal
  • Prescribed Forms – JKDM 4 and SST 04
5:00 End of Course