Malaysian GST Enhancement (1st Phase Implementation)

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Introduction

This section serves as a guide for Malaysian users to the setting up as well as usage of the GST component in AutoCount Accounting. Users from other nations may still wish to read this section as some of the implementation actually modifies the previous tax function that they may have been using before.

For Malaysian users, information regarding GST can be accessed from the following website:
Official Website Malaysia Goods & Services Tax (GST) Royal Malaysian Customs Department
If you have any question regarding about the GST (MSIC Code etc.) please contact the GST Office nearest to you. Auto Count Sdn. Bhd. will only offer support for issues within its software and technical implementation. 

Activating GST Functions

To activate the GST Functions, navigate to the following menu:
Tools > Options > General > Goods & Services Tax

While in this menu, click the checkbox of Use Goods & Services Tax to enable the function. After doing so, please key in the tax rate required which is 6.00 % as specified by the Malaysian Government.

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User must then specify the GST Start Date, which should be set to 04-2015 or later. (For the sake of this guide, a different date will be used). After setting the start date, please specify the taxable period. This period information will be set by the Royal Malaysian Customs Department (RMCD) after you have registered with them.

Activating the GST option will cause a GST menu to show in the main menu. This menu contains the Tax Code Maintenance, Manage A/R Bad Debt, Manage A/P Bad Debt, GST Processor and Tax Transaction Listing Report functions.

GST Menu for Malaysian User

GST Menu for Malaysian User

Note: For users in Singapore, this menu will contain the Tax Code Maintenance, Generate IRAS Audit File and Tax Transaction Listing Report functions whereas users from other nations will have access to only the Tax Code Maintenance and Tax Transaction Listing Report functions.

GST Menu for Singaporean User

GST Menu for Singaporean User

Standard GST Menu

Standard GST Menu

Setting the Company Profile

After activating the GST function from the Options menu, user will be required to modify/create their company profile from the General Maintenance > Company Profile menu. Please fill in the Tax/GST Registration No. and (if applicable) the Self-Billed Approval No. assigned by the RMCD in the fields available.

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Note: Self-Billed Approval No. is the reference number of the RMCD approval for issuing self-billed invoice.

After doing so go to the Logo & Report Header tab and click the ‘Set Default Report Header’ button to create the default report header that will contain the GST registration number in it. User can then modify the report header generated to better suit your needs. User must however remember that the GST ID No. field in the report header must be preserved as it is one of the requirements placed by the RMCD.

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Chart of Account for GST

The next step in setting up for GST is to create/modify the Chart of Account via the Account Maintenance. Below is an example of accounts to be used to support the GST implementation.

Note: The Chart of Account below is an example. For a more complete Chart of Account to fit your need please consult your accountant to set-up the correct accounts.

Account Type Account Number Account Description Note
Sales 500-0000 Sales Apply MSIC Code
Sales 500-1000 Cash Sales Apply MSIC Code
Sales Adjustment 510-0000 Return Inwards Apply MSIC Code
Cost of Goods Sold 614-0000 Customs Duty
Current Liability 450-0000 Output Tax Account To be used in Tax Code Maintenance
Current Asset 350-0000 Input Tax Account To be used in Tax Code Maintenance
Expenses 930-0000 Input Tax – Non Claimable To be used in Tax Code Maintenance
Current Liability 460-0000 AR Bad Debt Relief To be used in Manage AR Bad Debt
Current Asset 360-0000 AP Bad Debt Relief To be used in Manage AP Bad Debt
Expenses 940-0000 Bad and Doubtful Debt To be used in Manage AR Bad Debt
Expenses 960-0000 Rounding Adjustment To be used in Cash Sale documents*

*Note: Rounding adjustment account type will only be used if you have enabled the option ‘Enable 5 cents rounding adjustment in Cash Sale’ in Tools > Options > Invoicing > Cash Sale. If you wish to enable this option please make sure to assign the Rounding Adjustment Account in
Tools > Options > G/L > Default Accounts.

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A new field has been added in the Account Maintenance known as MSIC Code. The MSIC Code is a code (5 digits long) that represents your business nature. You may find the code associated to your industry in the Malaysia Standard Industrial Classifications document which can be downloaded from www.statistics.gov.my or you can use the MSIC Search Engine located at msic.stats.gov.my

Due to the inclusion of the MSIC code into the Account Maintenance, multi-industry company is required to separate the G/L accounts that affect the value of supplies and output tax into their separate industries code. This is because the MSIC code will be used in Form GST-03 in the Breakdown Value of Output Tax in accordance with Major Industries Code item. The MSIC Code(s) will be used in the Major Industries Code portion of the item to show the breakdown of the total GST amount for the respective MSIC Code(s).

Examples of accounts that need to assign MSIC Code(s) are Sales Account, Cash Sale Account, Return Inwards, Discount Allowed and Rental Received.

Tax Code Maintenance

The Tax Code Maintenance has been enhanced to allow for user to have an easier time to set-up the needed tax codes. Instead of manually entering the tax codes needed, the user must use the Configure Malaysia GST function available in the Tax Code Maintenance window to configure the Tax Code(s) they need.

Configure Malaysia GST button

Configure Malaysia GST button

Note: For Singaporean users, the user will have to use the Configure IRAS GST function whereas for other nation, the user will have to manually enter the tax codes they need.

Configure IRAS GST button

Configure IRAS GST button

Clicking the ‘Configure Malaysia GST’ button will start the Tax Code Wizard in which the user will answer 4 simple questions to determine which Tax Code is needed for their company.

Tax Code Wizard

Tax Code Wizard

First 2 questions for Tax Code creation

First 2 questions for Tax Code creation

Last 2 questions for Tax Code creation

Last 2 questions for Tax Code creation

Tax Code Wizard finish

Tax Code Wizard finish

After answering the questions in the wizard, the Configure Malaysia GST dialog will prompt with the relevant tax codes for both Purchase and Supply Tax selected for the user to assign the respective tax account number.

Configure Purchase GST

Configure Purchase GST

Configure Supply GST

Configure Supply GST

After saving all the modification, user will find the tax code automatically added into the Tax Code Maintenance window. If user wishes to edit the Tax Code, they will only need to use the Edit function which functions similarly to previous versions.

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Explanation for the Tax Codes used

Below is a table containing the Tax Codes used in AutoCount Accounting and its equivalent in the required RMCD Tax Codes as well as the details for them.

S/P UD Tax Code RMCD Tax Code Tax  Rate Description Inclusive/ Exclusive GL Acc Note
P TX6_S TX6 6% Input Tax 6% – To Make Taxable Supplies (standard rated) Exclusive, Inclusive Input Tax Account Goods and services purchased from GST registered suppliers and directly attributable to taxable supplies (standard rated). GST incurred at 6%.
P TX6_Z TX6 6% Input Tax 6% – To Make Taxable Supplies (zero rated) Exclusive, Inclusive Input Tax Account Goods and services purchased from GST registered suppliers and directly attributable to taxable supplies (zero rated). GST incurred at 6%.
P TX6_X TX6 6% Input Tax 6% – To Make Exempt Supplies. Exclusive, Inclusive Input Tax – Non Claimable Goods and services purchased from GST registered suppliers and directly attributable to exempt supplies. GST incurred at 6%.
P TX6_I TX6 6% Input Tax 6% – Imported Services. Exclusive Input Tax Account Imported services attributable to taxable supplies.
P TX6_C TX6 6% Input Tax 6% – Capital Goods Acquired To Make Taxable Supplies Exclusive, Inclusive Input Tax Account Capital goods purchased from GST registered suppliers and directly attributable to taxable supplies. GST incurred at 6%.
P TX6_CX TX6 6% Input Tax 6% – Capital Goods Acquired To Make Exempt Supplies. Exclusive, Inclusive Input Tax – Non Claimable Capital goods purchased from GST registered suppliers and directly attributable to exempt supplies. GST incurred at 6%.
P IM6 IM 6% Input Tax 6% – Import of Goods Exclusive Input Tax Account GST of goods imported into Malaysia is calculated on CIF (Cost, Insurance and Freight) + Customs Duty payable. If you are a GST registered company, GST paid to Malaysia Customs on your import can be claimed as Input Tax.
P IS_ATS IS 0% Input Tax 0% – Imports Under Special Scheme (ATS) Exclusive Nil This refers to goods imported under Approved Trader Scheme (ATS), where GST is suspended when the trader imports non-dutiable goods into Malaysia. The scheme is meant to ease the cash flow of related traders who has significant imports.
P IS_ATMS IS 0% Input Tax 0% – Imports Under Special Scheme (ATMS) Exclusive Nil This refers to goods imported under Approved Toll Manufacturer Scheme (ATMS), where GST is suspended on the imports.
P BL6 BL 6% Input Tax 6% – Not Claimable Exclusive Input Tax – Non Claimable GST incurred but input tax claimed is disallowed. Examples are: Import/Hiring of passenger car; club subscription fees; medical expenses or medical/personal accident insurance premiums for the staff…
P NR NR 0% Input Tax 0% – Non-GST supplier Exclusive Nil Goods and services purchased from a non-GST registered supplier/trader who is not allowed to charge and collect GST.
P ZP ZP 0% Input Tax 0% – Zero Rated Exclusive Nil Goods and services purchased from a GST registered supplier where GST is charged at 0%. Refer to Appendix A1 of Budget 2014 Speech.
P EP EP 0% Input Tax 0% – Exempted Exclusive Nil Purchase of residential properties or financial services where GST is exempted. Refer to Appendix A2 of Budget 2014 Speech.
P OP OP 0% Input Tax 0% – Out of Scope Exclusive Nil Purchase of goods that are outside the scope of GST legislation.
P TX6-E43 TX-E43 6% Input Tax 6% – To make Incidental Exempt Supplies Exclusive Input Tax Account Only applicable to GST registered trader (Group and ATS only) that makes both taxable and exempt supplies (or commonly known as partially exempt trader). TX-E43 should be used for transactions involving the payment of input tax that is directly attributable to the making of Incidental Exempt Supplies. Incidental Exempt Supplies include interest income from deposits placed with a financial institution in Malaysia, realized foreign exchange gains or losses, first issue of bonds, first issue of shares through an Initial Public Offering and interest received from loans provided to employees, factoring receivables, money received from unit holders for units received by a unit trust etc.
P TX6-N43 TX-N43 6% Input Tax 6% – To make Non-Incidental Exempt Supplies Exclusive, Inclusive Input Tax Account Only applicable to GST registered trader that makes both taxable and exempt supplies (or commonly known as partially exempt trader). TX-N43 should be used for transactions involving the payment of input tax that is directly attributable to the making of Non-Incidental Exempt Supplies. Non-Incidental Exempt Supplies include sale and rental of residential properties and financial services provided etc.
P TX6-RE TX-RE 6% Input Tax 6% – Residual Input Tax Exclusive, Inclusive Input Tax Account Only applicable to GST registered trader that makes both taxable and exempt supplies (or commonly known as partially exempt trader). It refers to GST incurred that is not directly attributable to the making of taxable or exempt supplies (or commonly known as residual input tax). Example: operation overhead for a development of mixed property (residential & commercial).
P GP GP 0% Input Tax 0% – Disregarded Exclusive Nil Purchases that are disregarded under GST legislation. Example: purchases within GST group registration, purchases made within a Warehouse Scheme etc.
P AP6_BD AP 6% Input Tax 6% – Adjustment Increase: AR Bad Debt Relief or AP Bad Debt Recovery Exclusive Input Tax Account Adjustment on input tax (increase) as a result of AR Bad Debt Relief or AP Bad Debt Recovery.
P AP6_CN AP 6% Input Tax 6% – Adjustment Reduce: AP Credit Note Exclusive Input Tax Account Adjustment on input tax (reduce) as a result of AP Credit Note.
P AP6_DN AP 6% Input Tax 6% – Adjustment Increase: AP Debit Note Exclusive Input Tax Account Adjustment on input tax (increase) as a result of AP Debit Note.
P AP6_O AP 6% Input Tax 6% – Adjustment: Others Exclusive Input Tax Account Adjustment on input tax as a result of other events.
P AP6_C AP 6% Input Tax 6% – Adjustment: Capital Goods Exclusive Input Tax Account Adjustment on input tax related to capital goods.
P AP6_A AP 6% Input Tax 6% – Adjustment: Annual Exclusive Input Tax Account Adjustment on input tax as a result of annual adjustments.
S SR6_S SR 6% Output Tax 6% – Standard Rated Supplies Exclusive, Inclusive Output Tax Account Supply of goods and services made in Malaysia that accounted for standard rated GST.
S SR6_I SR 6% Output Tax 6% – Imported Services Exclusive Output Tax Account Imported services account for standard rate GST.
S SR6_D SR 6% Output Tax 6% – Disposal of business assets Exclusive Output Tax Account Disposal of business assets.
S ZR ZR 0% Output Tax 0% – Zero Rated Supplies Exclusive Nil Supply of goods and services that qualify for zero-rating. Example: provide services fall within the description of international services etc.
S ZR_E ZR 0% Output Tax 0% – Zero Rated Supplies (Exports) Exclusive Nil Export of goods and services.
S ES43 ES43 0% Output Tax 0% – Incidental Exempt Supplies Exclusive Nil Only applicable to GST registered trader that makes both taxable and exempt supplies (or commonly known as partially exempt trader). Incidental Exempt Supplies include interest income from deposits placed with a financial institution in Malaysia, realized foreign exchange gains or losses, first issue of bonds, first issue of shares through an Initial Public Offering and interest received from loans provided to employees, factoring receivables, money received from unit holders for units received by a unit trust etc.
S ESN43 ESN43 0% Output Tax 0% – Non-Incidental Exempt Supplies Exclusive Nil Only applicable to GST registered trader that makes both taxable and exempt supplies (or commonly known as partially exempt trader). Non-Incidental Exempt Supplies include sale and rental of residential properties and financial services provided etc.
S DS6 DS 6% Output Tax 6% – Deemed Supplies Inclusive Output Tax Account A supply is deemed has taken place even though no goods/services are provided or no consideration is paid. Example: free gifts (more than RM 500), disposal of business assets without consideration.
S OS OS 0% Output Tax 0% – Out Of Scope Supplies Exclusive Nil Supplies that are outside the scope of the proposed GST model and GST is therefore not chargeable. Example: transfer of business as a going concern, private transactions, third country sales (sale of goods from a place outside Malaysia to another place outside Malaysia).
S ES ES 0% Output Tax 0% – Exempt Supplies Exclusive Nil Supplies that are exempted under GST. Example: residential properties, public transportation etc. Refer to Appendix A2 of Budget 2014 Speech.
S RS RS 0% Output Tax 0% – Relief Supplies Exclusive Nil Supplies that are given relief from GST.
S GS GS 0% Output Tax 0% – Disregarded Supplies Exclusive Nil Supplies that are disregarded under GST legislation. Example: supply within GST group registration, sales made within a Warehouse Scheme etc.
S AS6_BD AS 6% Output Tax 6% – Adjustment Increase: AR Bad Debt Recovery or AP Bad Debt Relief Exclusive Output Tax Account Adjustment on output tax (increase) as a result of AR Bad Debt Recovery or AP Bad Debt.
S AS6_CN AS 6% Output Tax 6% – Adjustment Reduce: AR Credit Note Exclusive Output Tax Account Adjustment on output tax (reduce) as a result of AR Credit Note.
S AS6_DN AS 6% Output Tax 6% – Adjustment Increase: AR Debit Note Exclusive Output Tax Account Adjustment on output tax (increase) as a result of AR Debit Note.
S AS6_O AS 6% Output Tax 6% – Adjustment: Others Exclusive Output Tax Account Adjustment on output tax as a result of other events.
S AS6_C AS 6% Output Tax 6% – Adjustment: Capital Goods Exclusive Output Tax Account Adjustment on output tax related to capital goods
S AS6_A AS 6% Output Tax 6% – Adjustment: Annual Exclusive Output Tax Account Adjustment on output tax as a result of annual adjustment.

Assigning Default Tax Code

There are 3 places available for you to define the default tax code to be used in all transaction/entries. The list below is ordered to their sequence of priority:

  1. Debtor Maintenance (for A/R) or Creditor Maintenance (for A/P) (first priority)
  2. Stock Item Maintenance (second priority)
  3. Tax Code Maintenance (third priority)

The system will first examine the setting in Debtor/Creditor Maintenance to see if that particular debtor/creditor has a default tax code assigned to it. If there is no default tax code assigned, the system will then check on the Items itself before moving on to the Tax Code Maintenance. If none of the previously mentioned places is assigned with a default tax code, no tax code will be automatically displayed during transaction/entries.

To assign a default tax code at the Debtor/Creditor Maintenance, navigate to the desired debtor/creditor account and select the ‘Others’ tab. In the GST field select the desired tax code you wish to apply to the debtor/creditor.

Assign GST Tax Code to Debtor

Assign GST Tax Code to Debtor

Assign GST Tax Code to Creditor

Assign GST Tax Code to Creditor

To assign a default tax code at the Item Maintenance, select the desired Item and edit the Supply Tax Type and Purchase Tax Type fields to enter the default tax code for supply and purchase of the item.

Assign GST Tax Code to an Item

Assign GST Tax Code to an Item

To assign a default tax code at Tax Code Maintenance, select and edit the Tax Code you wish to set as default tax code but checking the Default box.

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Reminder: You can only assign one default tax code for Purchase and one for Supply when assigning the default tax code via Tax Code Maintenance.

Managing Bad Debt

To help in managing the bad debt relief portion of the GST implementation, AutoCount Accounting provides with the Manage A/R Bad Debt Relief function as well as the Manage A/P Bad Debt Relief function. These 2 features can only be used when the status of the GST Processed Report for the related entries is Submitted.

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Before using these 2 features, please navigate to the Options > Settings menu of both Manage A/R Bad Debt Relief and Manage A/P Bad Debt Relief window  to set the default G/L accounts for the purpose of auto posting.

Settings menu for A/R Bad Debt Relief

Settings menu for A/R Bad Debt Relief

Set the accounts number for posting purposes.

Set the accounts number for posting purposes.

After setting up the accounts, you may begin managing the bad debt relief by first searching any outstanding invoice (or purchase invoice for A/P) documents that by filtering the date and debtor information.

The Date search option will show all documents before and during the date. For example if an outstanding invoice with GST paid has a date of 02/06/2014, setting the Date to 01/06/2014 will cause the document not to show out, however if the date is 02/06/2014 or 03/06/2014, the document will show out in the search result.

Date Selected 02/06/2014

Date Selected 02/06/2014

If the ‘> 6 months’ option is ticked, the selected date filter will only show outstanding documents of after 6 months of the date selected. For example if the selected date is 02/06/2014, when the ‘> 6 months’ option is ticked then documents with the date before 02/12/2013 will be shown.

Same Date selected but with >6 months option enabled

Same Date selected but with >6 months option enabled

After searching the needed outstanding document, highlight the document and click on the ‘Create Bad Debt Relief’ button. You will be prompted with a dialog screen requesting you to specify the Journal Entry information for the Bad Debt Relief you are trying to create.

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After supplying the information and pressing ‘Ok’, the status of the document will change to Bad Debt Relief. If however the status does not change in the Manage window, just re-do the search and you will see the change.

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Highlighting the document that has the status Bad Debt Relief will change the buttons below it. If you click the Undo Bad Debt Relief, it will cancel the journal entry document generated when you created the bad debt relief. Clicking the View Journal Doc. will serve to open the Journal Entry of the created bad debt relief document.

If you had undone the bad debt relief and then re-create the bad debt relief of the invoice document, you will be prompted with the following dialog:

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Selecting ‘Yes’ will just remove the cancelled status of the earlier created journal entry while selecting ‘No’ will create a new journal entry for the bad debt relief.

If you click on Create Bad Debt on a document with Bad Debt Relief status, it will change the status to Bad Debt. The Bad Debt Relief status means that the bad debt is not being written off and can still be recovered. If however the status has been changed to Bad Debt, it means that the bad debt was written off.

How to do A/R Bad Debt Recovery for Supplier

For A/R Bad Debt Recovery for Supplier (Customer pays us after we have claimed A/R Bad Debt Relief), if the debt was not written off (Bad Debt Relief status) when receiving payment from customer, the supplier will just have to do a normal A/R Payment as usual. If the debt had been written off and the A/R Bad Debt Relief was claimed earlier, when receiving payment, create an A/R Debit Note document crediting to A/R Bad Debt Relief account with the taxable amount before doing the A/R Payment as usual.

How to do A/P Bad Debt Recovery for Customer

For  A/P Bad Debt Recovery for Customer (We as the customer pay to the supplier after accounted for A/P Bad Debt Relief), if the debt was not written off, when doing the payment , just create an A/P Payment document as usual. If the debt had been written off and A/P Bad Debt Relief was claimed earlier, when doing the payment, create an A/P Debit Note document debiting to the A/P Bad Debt Relief account with the taxable amount before doing the A/P Payment as usual.

GST Processor

AutoCount Accounting contains a feature in it GST function that will help to gather all information related to the GST entries and provide the summary reports that can be use for submission. This feature is called the GST Processor.

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To access this function is simple, just navigate to the GST menu and select GST Processor. To begin the process of collecting the information needed, press the ‘New’ button to start the GST Processor Wizard.

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This Wizard will examine the database of the active tax period and display:

o    Any unapplied amount in the A/R and A/P Credit Note as well as allowing for drill down to document level to knock off the document accordingly.

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o    Manage A/R Bad Debt and Manage A/P Bad Debt which will allow you to add the entries needed before processing the GST information of the active tax period.

Manage A/R Bad Debt

Manage A/R Bad Debt

Manage A/P Bad Debt

Manage A/P Bad Debt

After you have finished managing the unapplied A/R and A/P Credit Note as well as A/R Bad Debt and A/P Bad Debt, click on the ‘Finish’ button to proceed to process the GST details.

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Preview To view, export and print GST related reports.
Generate GAF Generate the GST Audit File in XML or Text format via the option ‘Generate As’.
Generate GST Return File Generate a GST Return File in Text format usable for uploading purposes.
Save Temporarily save the processed result. This is to allow for any entries/transaction used in the result to be modified. Users just need to delete the processed record and restart the process again to obtain the updated result.
Save & Submit (or Submit if already saved earlier) Do this if you have submitted the GST return form (GST-03). The related periods will be locked (the lock will be visible in the Tools > Manage Fiscal Year > Manage Period Lock) and you are not supposed to delete/modify the processed entries of the affected tax period which have been submitted. Any adjustment will have to be done in the following tax period which has not been submitted.

Documents & Reports Example

Below are some of examples of the new document and report formats with GST

Tax Invoice

Tax Invoice

Simplified Invoice

Simplified Invoice

Credit Note

Credit Note

Debit Note

Debit Note

Self-Billed Invoice

Self-Billed Invoice

GST Summary Sheet for Input Tax (Under Tax Summary All in One)

GST Summary Sheet for Input Tax (Under Tax Summary All in One)

GST Summary Sheet for Output Tax (Under Tax Summary All in One)

GST Summary Sheet for Output Tax (Under Tax Summary All in One)

GST Summary Sheet for Additional Information (Under Tax Summary All in One)

GST Summary Sheet for Additional Information (Under Tax Summary All in One)

CN/DN Listing

CNDN Listing

Purchase Listing by Tax Code

Purchase Listing by Tax Code

Supply Listing by Tax Code

Supply Listing by Tax Code