low value asset
Hi. I did not find any specific GST legal basis on recognizing output GST on deemed supply in respect to purchases of low value assets (LVAs). But since there is difficulty in the tracking of the usage of LVAs, as there may be instances that these will be used by employees which will somehow purport to private use of business asset and gift of goods. I understand that (LVAs) are business assets below RM1,300 (previously below RM1,1000) which are expensed off in the same year of purchase (not subject to depreciation). Does the threshold RM1,300 includes GST or is it the tax base only? Thank you.
Employee Benefits :
If goods and services acquired are given as a benefit to employees, it is considered as used for business purposes. Therefore, the employer needs to account for GST on the supply. However the businesses can claim any relevant input tax incurred. In the case where services are given free to the employees (e.g. free laundry services) no GST is due because free service is not regarded as a supply. Value of the fringe benefit given is based on the open market value.
In the case of fringe benefit where the input tax is blocked or not claimable, no GST is due when it is given as a fringe benefit to the employees.