Our company is a Sales & marketing company & registered person, which is collect commission by selling the travel membership, but we also help customer booked hotel on behalf under our company name, for this situation did we need account for gst to customer, because we are not travel agency company.
Firstly you need to define your business activity under your GST Registration?
Scope of Travel Industry
Scope of the travel industry covered in the GST Guide on Travel Indutry (revised as at 14 April, 2016) are as follows:-
(a) Travel Agents
(i) Agent acting on its own name
(ii) Agent acting on behalf of principal who is a taxable person.
(b) Tour Operators
(ii) Inbound Tours (Domestic tour); and
(iii) Outbound Tours (International tour).
(c) Tourist Guides
(d) Hotel Operators
(e) Transport Providers
(i) Air Transport
(ii) Land Transport
(iii) Sea Transport
(f) Ground Operator; and
The taxable supplies for the travel industry are as follows:
(a) Tour package; inbound tour (domestic tour) outbound tour (international tour)
(b) Agency services
(c) Transportation services (Sea, Land and Air Transport)
Some of the related taxable supplies in the Travel Industry which are subject to GST are as follows:-
(d) Hotel Accommodation;
(e) Transportation/ hire of vehicles in Malaysia/car hire;
(f) Tour package;
(g) Restaurant meals and dining places;
(h) Tickets for entry to exhibitions, entertainment venues;
(i) Hospitality (spas and resort);
(j) Agency commission;
(k) Booking Fees;
(l) Tourist Guide;
(m) Tour Deposit;
(n) Amendment Charges for Inbound Tour Package and Domestic Air Ticket.
(o) Travel Insurance;
(p) Visa Service Fees; and
(q) Other related tourism services.
A travel agency that is providing agency services and have exceeded the prescribed threshold is required to be a registered person for GST and subsequently charge GST on their supplies. For further information on registration, please refer to the GST Guide on Registration.
Travel agent acting on its own name (act as a principal )
(a) Supply is treated as normal supply by agent.
(b) Input tax can be claimed by the agent.
(c) Agent to account for output tax if reached the prescribed threshold.
Travel agent acting as an agent on behalf of a principal who is a taxable person;
(d) Principal allowed to claim input tax and account for output tax.
(e) Agent can claim input tax on his services and account output tax on his commission if he is a GST registered person.
The booking of an accommodation in a hotel and a flight ticket in Malaysia are taxable supplies subject to GST at standard rate. If the booking fees incurred for booking a hotel located outside Malaysia, the booking fees (if considered as part payment for the supply of accommodation) is zero rated as it relates to services to be consumed outside Malaysia.
Any deposit paid for booking of an accommodation in Malaysia is considered as part of payment and subject to GST at standard rate. Any deposit received by hotels is recognise as a revenue and the money can be use for business purpose. Accommodation industry must issue a tax invoice for any deposit received from customers.
Please go through this extract from GST Guide on Retailing :
Commission agent is a person who is appointed to make a supply on behalf of DSC (principal). Therefore, any supply made by the commission agent would be treated as a supply made by the principal. If the DSC is a registered person, the commission agent whether he is a GST registered person or not, is required to charge GST on behalf of DSC on the supply made and issue a tax invoice in the name of DSC. The commission agent must submit a copy of DSC tax invoice to DSC for the purpose of submission of DSC’s GST return and record keeping.
Commission/bonuses/incentives paid by DSC to commission agent is a consideration for the services supplied to DSC. For the purpose of GST registration, the agent’s turnover should include the commission/bonuses/incentives received and other taxable supplies made by him. If the commission agent is a GST registered person, he has to account for GST on the commission/bonuses/incentives received by him. DSC is entitled to claim the GST incurred as his input tax.
Thank for the info.
mean that seen agoda no charge the gst but we as a registered person we still need account gst to customer right? As follow:
We book hotel from agoda RM1,000.00 (no tax invoice provide) on behalf of customer. So i have to account 6% gst to customer RM1000.00 + RM60(gst) = RM1,060.00 . Proccessing fee RM50+3(gst)=RM53
But this is not part of our sales we only help customer to do booking should we need charge them gst? only the processing fee we can charge gst.
Please correct me if i wrong.
You are a service provider and please go through the GST Guide on Disbursement and Reimbursement below :Disbursement and reimbursement are the method of recovery of expenses.
It happens when you help somebody pay his expenses and bill him afterwards to recover the expenses.
Definition of Reimbursement
“Reimbursement” refers to the recovery of an expense that you incur as a principal from your client (another party). A reimbursement is a supply and subject to GST .
Definition of Disbursement
“Disbursement” refers to the recovery of a payment made on behalf of another party by you as an agent. A disbursement does not constitute a supply and hence, is not subject to GST.
Definition of Principal
Generally, you are acting as a principal in procuring the goods or services if you contract with the supplier in your own name or capacity. The expenses are incurred by you, invoice is in your name.
Definition of Agent
You are acting as an agent if the expenses are incurred by client (another party), invoice is in client’s name. You will make the payment on his behalf.
GST treatment on disbursement and reimbursement are as follows –
|Not a supply||Is a supply|
|Not entitled for input tax claim||Entitled for input tax claim|
In general, the criteria for disbursement and reimbursement for GST purposes are as follows –
|Incur expenses as an agent acting on behalf of the client.||Incur expenses as a principal.|
|The client is the recipient of the supply (invoice is in the client’s name)||The client is not the recipient of the supply (invoice is in the principal’s name).|
|The client is the person responsible to pay for the supply||The principal is the personresponsible to pay for the supply.|
|The payment is authorised by the client.||The payment is not authorised by the client.|
|The client knew that the supply is made by a third party.||The client has no knowledge that the supply is made by a third party.|
|The exact amount is claimed from the client and the agent has no right to alter or add on the value of the supply||The principal has the right to alter or add on the value of the supply.|
|The payment is clearly an additional to the supply made to the client.||The payment is for the supply made to the client.|
Tax code for Reimbursement
Input tax: TX
Output tax: SR
Tax code for Disbursement
Input tax: OP
Output tax: OS
Invoicing for Reimbursement
Issue tax invoice compliance with GST.
Invoicing for Disbursement
Issue normal invoice*.
For the purposes of GST, section 33 of Goods and Services Act 2014 requires every registered person who makes any taxable supply of goods or services in the course or furtherance of any business in Malaysia to issue a tax invoice. A tax invoice is a document containing certain information about the supply that has been made and is similar to a commercial invoice except for some additional details. This document is important as it is an essential evidence to support a customer’s claim for deduction of input tax. The supplier must keep a copy and the original copy should be retained by the recipient. Only a GST registered person is allowed to issue a tax invoice.