*AKTA CUKAI PERKHIDMATAN 2018

) This Act comes into operation on a date to be appointed by the

Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different parts or different provisions of this Act.

) Notwithstanding subsection (2), the Minister may, by notification in the Gazette, appoint the effective date for the charging and levying of service tax under this Act.

Territorial and extra-territorial application

) Notwithstanding subsection (1), this Act and its subsidiary legislation shall apply to any person of whatever nationality or citizenship, beyond the geographical limits of Malaysia and the territorial waters of Malaysia, if the person—

is a foreign service provider; or

is registered under section 56C as a foreign registered person.

Interpretation

makes payment for digital services using credit or debit facility provided by any financial institution or company in

Malaysia;

acquires digital services using an internet protocol address registered in Malaysia or an international mobile phone country code assigned to Malaysia;

resides in Malaysia;

“regulations” means regulations made under section 91;

“taxable service” means any service which is prescribed to be a taxable service under section 8;

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“imported taxable service” means any taxable service acquired by any person in Malaysia from any person who is outside Malaysia;

“digital service” means any service that is delivered or subscribed over the internet or other electronic network and which cannot be obtained without the use of information technology and where the delivery of the service is essentially automated;

“limited liability partnership” has the meaning assigned to it under section 2 of the Limited Liability Partnership Act 2012 [Act 743];

“business” includes any trade, commerce, profession or vocation, or any concern in the nature of trade, commerce, profession or vocation;

“Pulau 1” has the meaning assigned to it under subsection 2(1) of the

Customs Act 1967;

“surcharge” means the surcharge referred to in subsection 32(3);

“effective date” means the date appointed under subsection 1(3);

“taxable period” means any period as determined or provided for under section 25;

“Tioman” means the Island of Tioman and the islands of Soyak,

Rengis, Tumok, Tulai, Chebeh, Labas, Sepoi and Jahat;

“Customs Appeal Tribunal” means the Customs Appeal Tribunal established under section 141B of the Customs Act 1967;

“free zone” has the meaning assigned to it under subsection 2(1) of the Free Zones Act 1990 [Act 438].

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) Subject to the general direction and supervision of the Director

General, a senior officer of service tax shall have and exercise all powers conferred on the Director General by or under this Act, other than those conferred under sections 6, 40, 41 and 90.

) Any person, other than an officer of service tax may be appointed by, or employed with the concurrence of, the Director

General for any duty or service relating to service tax and such person shall be deemed to be an officer of service tax for that duty or service.

) The Director General may, by authorization in writing, confer on any officer of service tax not being a senior officer of service tax all or any of the powers of a senior officer of service tax for a period not exceeding ninety days in respect of any one authorization.

) Any officer of service tax shall have the duties and powers to enforce and ensure due compliance with the provisions of this Act.

Persons appointed or employed to be public servants

) It shall not be an offence for any person to refuse to comply with any request, demand or order made by any officer of service tax acting or purporting to act under this Act if the officer refuses to declare his office and produce his authority card or badge on demand being made by the person.

) Any person, not being an officer of service tax, who unlawfully wears, uses, possesses or displays, otherwise than in the course of a stage play or other theatrical performance—

any uniform prescribed under section 8A of the Customs

Act 1967 or any dress having the appearance of, or bearing the distinctive marks of, such uniform; or

any prescribed authority card or badge, or authority card as approved by the Director General, referred to in subsection (1), commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

Confidentiality of information

) Subject to subsection (4), every person having possession or control over any document, information, return or declaration or copies thereof in relation to the business or the value of the provision of services by any taxable person, who at any time, otherwise than for the purposes of this Act or with the express authority of the Director

General—

communicates or attempts to communicate the information or anything contained in the document, return or declaration or copies thereof to any person; or

suffers or permits any person to have access to any information or to anything contained in the document, return or declaration or copies thereof, commits an offence.

) No person having any official duty or being appointed or employed under this Act or who is referred to in subsection (4) shall be required to produce in any matters or proceedings in any court or tribunal any document, information, return or declaration or to divulge or communicate in the matters or proceedings of any matter or thing, coming under his notice in the performance of his duties under this

Act, except as may be necessary for the purposes of carrying into effect the provisions of this Act or in order to institute a prosecution or in the course of a prosecution for any offence committed under this Act.

) The Director General may, as he deems fit, transmit or communicate any document, information, return or declaration referred to in subsection (1) or anything contained therein, to the Chief

Statistician of the Department of Statistics Malaysia which may be required in the performance of his official duty.

) Notwithstanding subsection (4), the Minister may, as he deems fit, allow the Director General to transmit or communicate any document, information, return or declaration referred to in subsection (1) or anything contained therein to any other person.

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any taxable service provided in Malaysia by a registered person in carrying on his business; or

any imported taxable service.

Taxable service

in the case of taxable service for—

the sale of goods by a taxable person to—

a person not connected with the taxable person, the actual price for which the goods are sold; or

a person connected with the taxable person, the price at which the goods would have been sold in the ordinary course of business to a person not connected with the taxable person; or

the provision of goods, where the goods are provided for free, the price at which the goods would have been

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in the case of taxable service, other than the taxable service specified in paragraph (a)—

provided by a taxable person to a person not connected with the taxable person—

the actual value of the taxable service provided;

or

in the case of premium for insurance policy, or takaful contribution for takaful certificate, the actual premium or contribution paid;

provided by a taxable person to a person connected with the taxable person, the value of the taxable service which would have been provided in the ordinary course of business to a person not connected with the taxable person; or

where the taxable service are provided for free, the value of taxable service which would have been provided in the ordinary course of business to a person not connected with the taxable person;

in the case of betting and gaming which are prescribed to be taxable services, the value of such betting and gaming shall be as prescribed; or

in the case of imported taxable service, the value of such imported taxable service shall be as prescribed.

) Notwithstanding paragraphs (1)(a) and (b), where a taxable service is provided by a taxable person and payment for such service is made to any machine or device operated by coins, tokens or the like, the value of such taxable service shall be as prescribed.

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) For the purpose of this section—

“goods” means goods as prescribed;

“person connected with the taxable person” means a person connected with the taxable person as prescribed.

Rate of service tax

) The Minister may, by order published in the Gazette—

fix the rate of service tax to be charged and levied under this

Act; and

vary or amend the rate of service tax fixed under paragraph (a).

) Any order made under subsection (2) shall be laid before the

Dewan Rakyat.

) (Deleted by Act 851).

) (Deleted by Act 851).

) (Deleted by Act 851).

Service tax due

in the case of taxable service, at the time when payment is received for the service provided to the customer by the registered person; or

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in the case of imported taxable service, at the time when the payment is made or invoice is received for the service, whichever is the earlier.

) The Director General may, upon application in writing by any registered person and subject to such conditions as he deems fit, approve the service tax in respect of the taxable service provided by the registered person to be due at the time the invoice is issued.

) Where the whole or any part of the payment for any taxable service provided by the registered person is not received from the customer within a period of twelve months from the date the taxable service was provided, the service tax shall be due on the day following that period of twelve months.

) Notwithstanding subsection (1)—

the service tax required to be accounted in any return made under subsection 26(3) shall be due on the day the return is required to be furnished to the Director General;

the service tax in respect of betting and gaming which are prescribed to be taxable services shall be due at the time as prescribed;

where an arrangement or agreement for the provision of any taxable service is made by any person, who is a taxable person under this Act, within the period beginning from 1 June 2018 and ending immediately before the effective date, and the taxable service is provided or performed on or after the effective date—

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the arrangement or agreement for the provision of such taxable service shall be deemed to have been made on the date such taxable service is provided or performed notwithstanding any payment, wholly or partly, is received or invoice is issued, for such taxable service during such period;

any payment received within such period or on or after the effective date, or invoice issued within such period, shall be deemed to have been received or issued on the date such taxable service is provided or performed; and

service tax shall be charged and levied on such taxable service and shall become due on the date such taxable service is provided or performed.

) Where the taxable service referred to in paragraph (3)(c) are betting and gaming, the service tax in respect of such betting and gaming shall be due at the time as prescribed under paragraph (3)(b).

) Paragraph (3)(c) shall not apply to a service which is prescribed as a taxable service after 1 September 2018.

any person who provides any taxable service; and

the total value of taxable services of the person referred to in paragraph (a), for the purpose of registration of the person under this Part.

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) Any person who provides any taxable service is liable to be registered at the following time, whichever is the earlier:

at the end of any month, where the total value of all his taxable services in that month and the eleven months immediately preceding that month has exceeded the total value of taxable service prescribed under subsection (1); or

at the end of any month, where there are reasonable grounds for believing that the total value of all his taxable services in that month and the eleven months immediately succeeding that month will exceed the total value of taxable services prescribed under subsection (1).

) Notwithstanding subsection (2), the Minister may prescribe that any person who provides taxable services shall be liable to be registered on the date of the commencement of the business.

) The total value of all taxable services of a person providing taxable services in the month and the eleven months immediately preceding that month referred to in paragraph (2)(a) shall be disregarded if—

the registration of the person providing the taxable services is cancelled, otherwise than under subsection 20(3), during that period; and

the Director General is satisfied that before the person’s registration is cancelled, he has given all information required by the Director General in order to determine whether to cancel the registration or not.

) This section shall not apply to a foreign service provider.

Application for registration

) Upon receipt of the application under subsection (1), the

Director General may approve the registration, subject to such conditions as he deems fit.

) The Director General shall register the person under subsection (1) with effect from the first day of the month following the month in which the application under subsection (1) is made or from such earlier date as may be agreed between the Director General and the person but such date shall not be earlier than the date the person becomes liable to be registered.

) Where any person fails to comply with subsection (1), the

Director General shall register that person on the date as the Director

General may determine but not earlier than the date he is liable to be registered under section 12.

) Any person who fails to comply with subsection (1) commits an offence.

) This section shall not apply to a foreign service provider.

Voluntary registration

) Upon receipt of the application under subsection (1), the

Director General may approve the registration from such date as he may determine subject to such conditions as he deems fit.

) This section shall not apply to a foreign service provider.

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Direction to treat persons as single taxable person

the persons named in that direction be treated as a single taxable person carrying on the business activities described in that direction with effect from the date as specified in the direction; and

the single taxable person referred to in paragraph (a) to be registered with effect from the date as specified in the direction.

) For the purposes of subsection (1), in determining whether any separation of business activities is artificial, regard shall be had to the extent to which the different persons carrying on those business activities are closely bound to one another by financial, economic and organizational links.

) The Director General may make a direction under subsection (1)

naming any person if the Director General is satisfied that—

the person is providing or has provided any taxable service;

the activities in the course of which the person provides or has provided those taxable service form only part of certain activities in the business and that the other activities in that business, whether or not that other activities are similar to the activities carried on by that person, are being carried on concurrently or previously, or both, by one or more other persons; and

if all the taxable services provided in that business were taken into account, the person carrying on that business would, at the time of such direction is made, be required to be registered by virtue of section 12.

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) Any direction made under subsection (1) shall be served on each of the persons named in it.

) Where, after a direction had been made under subsection (1), it appears to the Director General that any person who has not been named in that direction is providing any taxable services in the course of activities which should be regarded as part of the business activities, the Director General may make and serve on that person a supplementary direction adding that person’s name to those of the persons named in the direction under subsection (1).

) Upon the addition of the person’s name in the direction under subsection (5), that person shall be treated as a single taxable person carrying on the business activities described in the direction under subsection (1) with effect from the date as specified in the direction.

) Where, immediately before any direction including a supplementary direction is made, any person named in the direction has been registered in respect of the taxable service provided by him as specified in subsection (3) or (5), his registration shall be revoked by the Director General with effect from the date the single taxable person is registered under subsection (1).

) Upon the revocation of registration under subsection (7), the person whose registration has been revoked together with all other persons named in the direction under subsection (1) shall be treated as a single taxable person.

) In relation to a business specified in a direction, the persons named in such direction together with any person named in a supplementary direction relating to that business, being the persons who together are to be treated as a single taxable person, are referred to as “the constituent members” in subsections (10) and (11).

) Where any direction is made under subsection (1)—

the single taxable person carrying on the business specified in the direction shall be registered in such name as the persons named in the direction may jointly nominate by

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any taxable service provided by one of the constituent members in the course of the activities of the single taxable person shall be treated as being taxable service provided by the single taxable person;

each of the constituent members shall be jointly and severally liable for any service tax due and payable by the single taxable person;

without prejudice to paragraph (c), any failure by the single taxable person to comply with any requirement imposed under this Act shall be treated as a failure by each of the constituent members severally; and

subject to paragraphs (a) to (d), the constituent members shall be treated as a partnership carrying on the business of the single taxable person and any question as to the scope of the activities of that business at any time shall be determined accordingly.

) Where it appears to the Director General that any person who is one of the constituent members should no longer be regarded as such for the purposes of paragraphs (10)(c) and (d) and the Director General gives notice in writing to that effect, that person—

shall not have any liability by virtue of paragraphs (10)(c)

and (d) for anything done after the date specified in that notice; and

on the date as specified in the notice, shall be treated as having ceased to be a member of the partnership referred to in paragraph (10)(e).

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) This section shall not apply to a foreign service provider.

Registration of partnership

persons carrying on a business in a partnership as a registered person shall be in the name of the firm; and

the same persons carrying on separate businesses in a partnership as a registered person shall be in the separate names of the respective firms.

) In determining whether taxable services are provided to or by the persons referred to in subsection (1), no account shall be taken of any change in the partnership.

) Any person who ceases to be a partner in a partnership shall—

notify the Director General in writing of the date of cessation within thirty days from the date of cessation; and

pay for the proportion of the partnership’s liability on any service tax due and payable on any taxable services provided by the partnership until the date of cessation.

) Where any person ceases to be a partner in a partnership under subsection (3) during any taxable period, any notice, whether of assessment or otherwise, which is served on the partnership and relates to the taxable period or to any other taxable period during the whole or part of which he was a partner in the partnership, shall be deemed as to have been served also on him.

) Notwithstanding any written law to the contrary, any notice, whether of assessment or otherwise, which is addressed to a partnership by the name in which it is registered under this Act, and is served in accordance with this Act shall be deemed—

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as having been properly served on the partnership; and

where subsection (4) applies, as having been properly served on any previous partner.

) Subsections (1) and (3) shall not affect the extent to which a partner is liable for service tax owed by the firm under any other written law.

) Where a person is a partner in a firm during part only of a taxable period, his liability for service tax on any taxable service provided by the firm during the taxable period shall be the proportion of the firm’s liability as may be just.

) Where any notice is required to be given by a partnership under this Act, it shall be the joint and several liabilities of all partners to give the notice, except that if a notice is given by any of the partners, it shall be regarded as sufficient compliance with the requirement.

) Any person who contravenes paragraph (3)(a) or (b) commits an offence.

) For the purposes of this section, a partnership excludes a limited liability partnership.

) This section shall not apply to a foreign registered person.

Registration of branches or divisions

) The Director General may approve an application made under subsection (1) subject to such conditions as he deems fit if he is

Service Tax 31

satisfied that the registered person has fulfilled the following requirements:

it is likely to cause real difficulty for the registered person to submit a single return in respect of all the branches or divisions but for the separate registration;

each branch or division maintains a separate account in respect of its activities;

each branch or division is separately identifiable by reference to the nature of the activities carried on by or the location of the branch or division; and

each branch or division has the same taxable period.

) The Director General may, at any time, by notice in writing to the registered person, cancel the registration approved under subsection (2) in respect of any or all of the branches or divisions if he is satisfied that—

the registered person has failed to comply with any condition imposed by the Director General under subsection (2);

any of the requirements referred to in subsection (2) has ceased to apply;

the registered person has provided any false, misleading or inaccurate declaration or information in his application under subsection (1); or

it is necessary for the protection of the revenue.

) Where the Director General cancels the registration in accordance with subsection (3), the cancellation shall have effect from the date as the Director General may determine.

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) Subject to subsection (6), the registered person may apply in writing to the Director General for any branch or division separately registered under subsection (2) to cease to be so registered, and the

Director General may cancel the separate registration with effect from the date of application or from such later date as the Director General may determine.

) A registered person registered under subsection (2) shall remain registered for a period of not less than two years or such other shorter period as the Director General may determine.

) This section shall not apply to a foreign registered person.

Cessation of liability to be registered

) A registered person shall not cease to be liable to be registered by virtue of subsection (1) where the Director General is satisfied that the reason the total value of all his taxable services does not exceed the total value of taxable services prescribed under paragraph 12(1)(b) is that in the period of twelve months referred to in subsection (1) he temporarily ceases providing such taxable services, or suspends providing such taxable services, for a period of thirty days or more.

) This section shall not apply to a foreign registered person.

Notification of cessation of liability

who ceases to carry on business of providing any taxable services; or

who ceases to be liable to be registered under section 18, as the case may be, shall notify the Director General in writing of that fact and the date of cessation within thirty days from the date of cessation.

) Any person who contravenes subsection (1) commits an offence.

) This section shall not apply to a foreign registered person.

Cancellation of registration

) Where there is no notification made under section 19 and the

Director General is satisfied that a registered person has ceased to provide taxable services or has ceased to be liable to be registered under section 18, the Director General may cancel his registration from the date the registered person ceased to provide taxable services or ceased to be liable to be registered under section 18, as the case may be, or from such later date as the Director General may determine.

) Where the Director General is satisfied that on the day on which a person was registered—

in the case of a person who was registered under section 13, the person was not liable to be registered under section 12 or has ceased to provide taxable services; or

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in the case of a person who was registered under section 14, the person was not providing taxable services or has ceased to provide taxable services, the Director General may cancel the registration of such person with effect from the date as determined by the Director General in the notification in writing to such person.

) The Director General may cancel the registration of a registered person under subsection 14(2) if the registered person is in breach of any conditions imposed in relation to such registration with effect from the date of the breach or from such later date as determined by the

Director General.

) This section shall not apply to a foreign registered person.

Variation of registration

) Where there is no notification made under section 19 and the

Director General is satisfied that a registered person has ceased to provide any taxable service or has ceased to be liable to be registered under section 18, the Director General may vary the person’s registration or the particulars of the person’s registration from the date the registered person ceased to provide any taxable service.

) Where the Director General is satisfied that on the day on which the person was registered⎯

in the case of a person who was registered under section 13, the person was not liable to be registered under section 12, was not providing any taxable service or has ceased to provide any taxable service; or

Service Tax 35

in the case of a person who was registered under section 14, the person was not providing any taxable service or has ceased to provide any taxable service, the Director General may vary the registration of such person or the particulars of registration of such person with effect from the date as determined by the Director General in the notification in writing to such person.

) Notwithstanding subsection (1), the Director General may, upon request in writing by a registered person and subject to such conditions as he deems fit, approve an invoice to not be issued if the

Director General is satisfied that it will not be appropriate for the registered person to issue an invoice.

) No invoice showing an amount which purports to be service tax shall be issued on the provision of services—

which are not taxable services; or

by a person who is not a registered person.

) The amount of service tax payable shall be collected by the registered person from the customer in addition to the value and any

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) Notwithstanding subsection (3), where the payment for taxable services are made to any machine or device operated by coins, tokens or the like, the amount of payment shall include the amount of service tax chargeable.

) Any person who contravenes subsection (1), (2) or (3) commits an offence.

) This section shall not apply to a foreign registered person.

Production of invoices by computer

are transmitted or made available to the customer by electronic means; or

are produced on any material other than paper and are delivered to the customer.

) This section shall not apply to a foreign registered person.

Credit notes and debit notes

) This section shall not apply to a foreign registered person.

Duty to keep records

all records of provision of taxable services by or to that taxable person including invoices, receipts, debit notes and credit notes;

all other records as the Director General may determine.

) Any record kept under this section shall be—

preserved for a period of seven years from the latest date to which the record relates;

in the national language or English language; and

kept in Malaysia, except as otherwise approved by the

Director General and subject to such conditions as he deems fit.

) Where the record is in an electronically readable form, the record shall be kept in such manner as to enable the record to be readily accessible and convertible into writing.

) Where the record is originally in a manual form and is subsequently converted into an electronic form, the record shall be retained in its original form prior to the conversion.

) A copy of the record shall be admissible in evidence in any proceedings to the same extent as the record itself.

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) This section shall also apply to any person other than a taxable person who, in carrying on his business, acquires any imported taxable service.

) Any person who contravenes subsection (1), (2), (3), (4) or (5A)

commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

) This section shall not apply to a foreign registered person.

Taxable period

) A taxable person may apply in writing to the Director General for a taxable period other than the period as determined under subsection (1).

) The Director General may, upon receiving any application under subsection (2)—

allow the application and the taxable period shall be the period as applied for;

refuse the application and the taxable period shall remain as determined under subsection (1); or

vary the length of the taxable period or the date on which the taxable period begins or ends.

) The Director General may, as he deems fit, reassign the taxable person to any taxable period other than the period to which he has been previously determined under subsection (1) or (3).

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) This section shall not apply to a foreign registered person.

Furnishing of returns and payment of service tax due and payable

) Where a taxable period has been varied under paragraph 25(3)(c) and notwithstanding subsection (1), the return shall be furnished within thirty days from the end of the varied taxable period.

) A registered person who ceases to be liable to be registered under section 18 or ceases to carry on business of providing taxable services under section 19 shall, not later than thirty days after such cessation, or such later date as the Director General may allow, furnish a return containing particulars as the Director General may determine in respect of that part of the last taxable period during which the person was registered.

) Any taxable person who is required to furnish a return under this section shall pay to the Director General the amount of service tax due and payable by him in respect of the taxable period to which the return relates not later than the last day on which he is required to furnish the return.

) The return referred to in subsections (1), (2) and (3) shall be furnished whether or not there is service tax to be paid.

) Any taxable person who—

contravenes subsection (1), (2) or (3); or

furnishes an incorrect return,

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) Where any service tax due and payable is not paid wholly or partly by any taxable person after the last day on which it is due and payable under subsection (4) and no prosecution is instituted, the taxable person shall pay—

for the first thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (4), a penalty of ten percent of the amount of service tax which remains unpaid;

for the second thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (4), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid; and

for the third thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (4), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid.

) Any taxable person who fails to pay to the Director General the amount of service tax due and payable under subsection (4) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

) Subject to subsection (11), prosecution for the offence under subsection (8) may be instituted after the expiry of the period specified in paragraph (7)(c).

) In addition to any fine imposed by the court under subsection (8), the court may order that any taxable person who is convicted for the offence under subsection (8) to pay the penalty as specified in subsection (7).

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) No prosecution for the offence under subsection (8) shall be instituted against any taxable person who has paid the amount of service tax due and payable, and the penalty specified under subsection (7) within the period specified in subsection (7).

) This section shall not apply to a foreign registered person.

Furnishing of declaration and payment of service tax due and payable by person other than taxable person

account for the service tax due in a declaration in the form and manner as determined by the Director General; and

pay to the Director General the amount of service tax due and payable by him, not later than the last day of the month following the end of the month in which the payment on the service has been made by him or invoice is received by him.

) Any person referred to in subsection (1) who—

contravenes subparagraph (1)(a); or

furnishes an incorrect declaration, commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

) Where any service tax due and payable is not paid wholly or partly by any person referred to in subsection (1) after the last day on which it is due and payable under subsection (1) and no prosecution is instituted, the person shall pay—

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for the first thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), a penalty of ten per cent of the amount of service tax which remains unpaid;

for the second thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid; and

for the third thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid.

) Any person referred to in subsection (1) who fails to pay to the

Director General the amount of service tax due and payable under paragraph (1)(b) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

) Subject to subsection (7), prosecution for the offence under subsection (4) may be instituted after the expiry of the period specified in paragraph (3)(c).

) In addition to any fine imposed by the court under subsection (4), the court may order that the person referred to in subsection (1) who is convicted for the offence under subsection (4) to pay the penalty as specified in subsection (3).

) No prosecution for the offence under subsection (4) shall be instituted against any person referred to in subsection (1) who has paid the amount of service tax due and payable, and the penalty specified under subsection (3) within the period specified in subsection (3).

Power to assess

any taxable person—

fails to apply for registration under section 13;

fails to furnish a return under section 26; or

furnishes a return which appears to the Director

General to be incomplete or incorrect;

fails to furnish a return under section 56H; or

furnishes a return which appears to the Director

General to be incomplete or incorrect; or

any person other than a taxable person who, in carrying on his business, acquires any imported taxable service—

fails to furnish a declaration under section 26A; or

furnishes a declaration which appears to the Director

General to be incomplete or incorrect, the Director General may assess to the best of his judgment the amount of service tax due and payable, and the penalty payable under subsection 26(7), 26A(3) or 56I(2), as the case may be, if any, by the taxable person or foreign registered person or the person who is referred to in paragraph (1)(b) and shall forthwith notify him of the assessment in writing.

) Where an amount has been paid to any person as being a refund of service tax under this Act which ought not to have been paid to him, the Director General may assess the amount of the refund as being service tax due and payable by him and shall forthwith notify him of the assessment in writing.

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) The assessment under subsections (1) and (2) shall not be made more than six years from the date on which the service tax was due and payable or from the date on which the refund of service tax was made, as the case may be, except where in the opinion of the Director General any form of fraud or willful default has been committed by or on behalf of any person in relation to the service tax or refund, the Director

General may, for the purposes of making good any loss of service tax or payment of refund of service tax attributable to the fraud or willful default, make an assessment at any time.

) Where—

the Director General has made an assessment of service tax under subsection (1) in respect of subparagraph (1)(a)(i)

or (ii);

the service tax assessed under paragraph (a) has been paid but no return has been furnished for the taxable period to which the assessment relates; and

the taxable person fails to furnish a return for any subsequent taxable period, the Director General may, as he deems fit, assess an amount of service tax greater than that which he otherwise would have considered to be appropriate.

) Where it appears to the Director General that the amount which ought to have been assessed in an assessment under subsection (1), (2)

or (4) exceeds the amount which was so assessed, he may—

under the same provision as that assessment was made; and

in the case of a taxable person or foreign registered person, within the taxable period during which the assessment could have been made, or in the case of the person referred to in paragraph (1)(b), within the period under subsection 26A(1),

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make a supplementary assessment of the amount of the excess and shall forthwith notify the person in writing accordingly.

) Where an amount of service tax and penalty, if any, has been assessed and notified pursuant to subsection (1), (2) or (5), it shall be deemed to be an amount of service tax due and payable, and penalty payable, by the person and may be recovered accordingly and the amount of service tax and penalty, if any, shall be paid by the person, whether or not that person appeals against the assessment, to the

Director General unless or except to the extent that the assessment has been withdrawn or reduced by the Director General.

) The Director General may make any alteration in or addition to the assessment made under this section as he deems fit to ensure the correctness of the assessment and shall forthwith notify the person in writing.

Offsetting unpaid tax against refund

any amount of service tax due and payable, any surcharge accruing, or any penalty, fee or other money payable under this Act;

any amount of service tax due and payable, any surcharge accruing, or any penalty or other money payable under the

*Service Tax Act 1975 [Act 151];

any amount of sales tax due and payable, any surcharge accruing, or any penalty or other money payable under the

*Sales Tax Act 1972 [Act 64];

*NOTE—The Service Tax Act 1975 [Act 151] and the Sales Tax Act 1972 [Act 64] have since been repealed by the the Goods and Services Act 2014 [Act 762] which comes into operation on 1 July 2014 and 1 April 2012—

see sections 178 and 181 of Act 762 and P.U. (B) 319/2014.

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any amount of sales tax due and payable, any surcharge accruing, or any penalty, fee or other money payable under the Sales Tax Act 2018 [Act 806];

any amount of goods and services tax due and payable, any surcharge accruing, or any penalty or other money payable under the *Goods and Services Tax Act 2014 [Act 762];

any amount of customs duty, or any surcharge accruing, or any penalty, fee or other money payable under the Customs

Act 1967; or

any amount of excise duty, or any surcharge accruing, or any penalty, fee or other money payable under the Excise

Act 1976 [Act 176], the Director General may offset, against the unpaid amount referred to in paragraph (a), (b), (c), (d), (e), (f) or (g), any amount or any part of any amount refundable under this Act to that person and the Director

General shall treat the amount offset as payment or part payment received from that person.

Recovery of service tax, etc., as civil debt

) Where an invoice shows a provision of taxable service or digital service as having taken place with service tax chargeable on the service, there shall be recoverable from the person who issued the invoice an amount equals to—

that which is shown in the invoice as service tax; or

*NOTE—The Goods and Services Act 2014 [Act 762] has since been repealed by the Goods and Services Tax

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so much of the total amount shown as payable as is to be taken as representing service tax, if service tax is not separately shown in the invoice, for the provision of such taxable service or digital service.

) Subsection (2) shall apply whether or not—

the invoice is an invoice issued under section 21, 22 or 56G;

the provision of taxable service or digital service shown on the invoice actually takes or has taken place or the amount shown as service tax or any amount of service tax is or was chargeable on the provision of the taxable service or digital service; or

the person issuing the invoice is a registered person or foreign registered person, and any amount recoverable from the person under subsection (2) shall be recoverable as such and shall otherwise be recoverable as a civil debt due to the Government.

) In any proceedings to recover the service tax, surcharge, penalty, fee or other money under subsection (1), the production of a certificate signed by the Director General—

stating that any service tax, surcharge, penalty, fee or other money and the amount shown in the certificate as due and payable, accruing or payable, in any return, assessment or notice made under this Act from a person named in the certificate; and

giving the address of the person and purporting to be a copy of or an extract from any notice of assessment, shall be conclusive evidence of the service tax, surcharge, penalty or other money and the amount as due and payable, accruing or payable, in any return, assessment or notice and shall be sufficient authority for

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) Any penalty imposed under this Act shall, for the purposes of this Act and the Limitation Act 1953 [Act 254], the Limitation

Ordinance of Sabah [Sabah Cap. 72] or the Limitation Ordinance of

Sarawak [Sarawak Cap. 49], as the case may be, be recoverable as if the penalty were service tax due and payable under this Act and accordingly subsection 6(4) of the Limitation Act 1953, section 3 of the Limitation Ordinance of Sabah or section 3 of the Limitation

Ordinance of Sarawak, as the case may be, shall not apply to that penalty.

Power to collect service tax, etc., from person owing money to taxable person or foreign registered person

any person by whom any money is due or accruing or may become due and payable to the taxable person or foreign registered person;

any person who holds or may subsequently hold money for or on account of the taxable person or foreign registered person;

any person who holds or may subsequently hold money for or on account of any person for payment to the taxable person or foreign registered person; or

any person having authority from any other person to pay money to the taxable person or foreign registered person, to pay to the Director General forthwith, or within such time as the

Director General allows, such money, not being salary or wages due or accruing to the taxable person or foreign registered person, or so

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much of such money as is sufficient to pay the sum due and payable, accruing or payable by the taxable person or foreign registered person as aforesaid.

) A copy of the notice under subsection (1) shall be forwarded to the taxable person or foreign registered person at his last known address.

) All payments made pursuant to a notice under this subsection (1) shall be deemed to be made on behalf of the taxable person or foreign registered person and with the authority of the taxable person or foreign registered person and all other persons concerned.

) For the purposes of this section, the Director General may require any person to give him information—

as to any money, fund or asset which may be held by the person for any other person; or

of any money due and payable by him to any other person.

Recovery of service tax before payable from persons about to leave

Malaysia

any service tax due and payable by him under subsection 26(4) or 26A(1);

any penalty payable by him under subsection 26(7)

or 26A(3);

any surcharge accrued by him under subsection 32(3);

any fee payable by him under this Act; or

any other money recoverable from him under this Act, the Director General may issue to the Director General of Immigration a notice containing particulars of the person and the offence committed with a request that the person be prevented from leaving Malaysia unless he pays the service tax, surcharge, penalty, fee or other money, or furnishes security to the satisfaction of the Director General for its payment.

) Subject to any order issued or made under any written law for the time being in force relating to immigration, the Director General of

Immigration who receives a request under subsection (1) in respect of a person shall exercise all measures which may include the removal and retention of any certificate of identity, passport, exit permit or other travel documents in relation to that person as may be necessary to give effect to the request.

) The Director General shall cause the notice under subsection (1)

to be served personally or by registered post on the person to whom the notice relates.

) The non-receipt of the notice under subsection (1) by the person referred to in subsection (3) shall not invalidate anything done under this section.

) Where the person in respect of whom a notice has been issued under subsection (1) produces, on or after the date of the notice, a written statement signed by the Director General stating that all the service tax, surcharge, penalty, fee or other money specified in the

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notice have been paid, or that security has been furnished for its payment, that statement shall be sufficient authority for allowing that person to leave Malaysia.

) No legal proceedings shall be instituted or maintained against the Federal Government, a State Government or any other public officer in respect of anything lawfully done under this section.

Payment by instalments

) Where the service tax is allowed to be paid by instalments, the penalty under subsection 26(7) or 26A(3) shall cease to be calculated from the date the Director General allows the payment by instalments.

) Where there is a default in payment of any instalment under subsection (1) on its due date for payment of the balance of the amount due and payable, the whole outstanding balance shall become due and payable on that date and shall, without any further notice being served on the person liable to pay the amount due, be subject to a surcharge equals to ten per cent of that balance and the surcharge shall be recoverable as if it were due and payable under this Act.

) This section shall not apply to a foreign registered person.

Liability of directors, etc.

the directors of the company;

the compliance officer who is appointed amongst the partners of the limited liability partnership or if no compliance officer is appointed as such, any one or all of the partners of the limited liability partnership;

the partners of the firm;

the office-bearers of the society; or

the persons responsible for the management of the body of persons, as the case may be, shall together with the company, limited liability partnership, firm, society or other body of persons be jointly and severally liable for the service tax, surcharge, penalty, fee or other money.

) In relation to a company that is being wound up, the directors of the company shall only be liable where the assets of the company are insufficient to meet the amount due, after paying any sum having priority under the Companies Act 2016 [Act 777] in relation to the application of the assets of the company in the winding-up over the service tax, surcharge, penalty, fee or other money.

) Any order made under subsection (1) shall be laid before the

Dewan Rakyat.

) The Minister may, in any particular case and subject to such conditions as he deems fit—

exempt any person or class of persons from payment of the whole or any part of the service tax which may be charged and levied on any taxable service or digital service provided or any imported taxable service acquired; or

direct the Director General to make a refund to any person or class of persons of the whole or any part of the service tax or penalty paid by such persons or class of persons.

) Where a registered person provides any taxable service or a foreign registered person provides any digital service to a person or class of persons exempted under subsection (1) or paragraph (3)(a), the registered person or the foreign registered person shall be exempted from charging and collecting service tax due and payable on such taxable service or digital service.

) Where any person who is exempted under subsection (1) or paragraph (3)(a) fails to comply with any conditions to which the exemption relates, any service tax that has been the subject of the exemption shall become due and payable by the person on the date on which any of the conditions failed to be complied with.

) Where a person who has been granted exemption under subsection (1) or paragraph (3)(a) has paid any of the service tax to which the exemption relates and has been granted approval by the

Minister for a refund of the amount of service tax which has been paid, the person shall be entitled to such refund.

Refund by deduction of service tax

) Where after the deduction has been made under subsection (1), there is any balance in the amount of refund, the balance shall be refunded to the registered person by the Director General.

) Notwithstanding subsection (2), the Director General may withhold the whole or any part of any amount refundable under subsection (2) to be credited to any following or subsequent taxable period and the Director General shall treat the amount credited as payment or part payment received from the registered person.

Claim for refund of service tax in relation to bad debt

the whole or any part of the service tax payable to such person has been written off in his accounts as bad debts; and

the Director General is satisfied that all reasonable efforts have been made by such person to recover the service tax.

) Where the person who makes a claim for a refund under subsection (1) in relation to a bad debt—

has not received any payment in respect of the provision of taxable services, such person may make a claim for a refund of the whole of the service tax paid; or

has received any payment in respect of the provision of taxable services, such person may make a claim for the difference between the service tax paid and amount calculated in accordance with the following formula:

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A x C

B where A is the payment received in respect of the provision of such taxable services;

B is the value of such taxable services plus service tax payable on such taxable services; and

C is the service tax payable on such taxable services.

) The person referred to in subsection (1) may make a claim for a refund of the whole or any part of any service tax in relation to the bad debt within six years from the date the service tax is paid by him and the Director General may refund the whole or any part of the service tax after being satisfied that the person has properly established the claim.

) For the purposes of this section, “bad debt” means the outstanding amount of the payment in respect of the provision of taxable services including the service tax which is due to a person who is, or has ceased to be, a registered person but has not been paid to, and is irrecoverable by, the person.

) This section shall not apply to a foreign registered person.

Repayment of service tax in relation to bad debt

) This section shall not apply to a foreign registered person.

Payment of service tax, etc., short paid or erroneously refunded

the whole or any part of any service tax due and payable, surcharge accrued, or penalty, fee or other money payable, under this Act has not been paid by a person; or

the whole or any part of any service tax due and payable, surcharge accrued, or penalty, fee or other money payable, after having been paid, has been erroneously refunded to a person, the Director General shall demand from the person to pay the service tax, surcharge, penalty, fee or other money, or the deficient service tax, surcharge, penalty, fee or other money, or to repay the refund erroneously paid to him.

) The demand under subsection (1) shall be made within six years from the date on which—

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the service tax, surcharge, penalty, fee or other money was payable, or the deficient service tax, surcharge, penalty, fee or other money was paid; or

the refund was made.

) Upon receipt of the demand under subsection (1), the person shall—

pay the service tax, surcharge, penalty, fee or other money, or the deficient service tax, surcharge, penalty, fee or other money; or

repay the refund erroneously paid to him.

Refund of service tax, etc., overpaid or erroneously paid

has overpaid or erroneously paid any service tax, surcharge, penalty, fee or other money; or

is entitled to the refund under subsection 34(6) or 40(3), may make a claim for refund in the form and manner as determined by the Director General.

) A claim for refund under subsection (1) shall be made to the

Director General within one year from the time—

such overpayment or erroneous payment occurred; or