Gift in the form of Touch N Go card with reload amount
Assumed that the GIFTs mentioned below worth value of more than RM500/=
Gift in the form of Touch N Go card with certain top up amount
- The gift is indeed a gift in cash?
- Hence, the tax code for the purchase of the above Touch N Go is OP?
- There is no requirement to account for output tax under deemed supply for the above gift?
How about gift in the form of RON 95 petrol card?
- Is it same as above being cash gift and tax code is OP?
- But unlike Touch N Go that can be used like CASH to pay for other goods & services, RON 95 petrol card can only be used to purchase RON 95 petrol, hence tax code for this purchase is RP?
- The petrol card is purchased from GST registrant but the purchase is subject to 0% GST (relief supply), does the gift rules apply and output tax (deemed supply) is to be accounted for these gifts
How about the courier / delivery charges incurred to send out these GIFTs be it goods or card (cash)?
- The delivery charges are to be regarded as part of the cost of gift?
- Hence to account for output tax as deemed supply?
Thank you so much
Please go through as append below :
A gift of goods made in the course or furtherance of business to the same person in the same year where the total cost to the donor is more than five hundred ringgit, is a supply (refer subparagraph 5(2) First Schedule of GSTA).
Whether or not a registered person claims the input tax on the goods, the registered person still has to account for GST if the gift of goods is worth more than RM500.
It is a normal business practice that a business gives free gifts to its customers. These free gifts are goods or services normally given to customers on special occasions or festival such as the giving of door gifts and gifts given free during lucky draws. Where business goods are given free to a person other than a connected person and the cost of goods to the donor is not more than RM500.00 per year (financial year), such goods is not required to charge GST and the registered person (donor) is entitled to claim input tax incurred on the purchase of the goods.
If the cost of the goods is more than RM500.00 and is given to the same person in the same year, the donor if he is a registered person, must account for output tax based on the open market value of the goods.
You cannot treat coutier charges as a gift.