Technical service from oversea company

An oversea company will bil me for technical service.  do i hv to pay GST?  what is the code for it?

Asked on September 17, 2015 2015-09-17 08:55:19 Business (商家)
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1 Answer(s)

It depends on whether the technical service was performed in Malaysia and for business purpose. If yes, then the technical service shall be treated as a supply. Imported service is based on reverse mechanism.

Tax code has to be created or IS – imported service (should your software has this code). There is a need to assign a tax code to this transaction as it has to be reported in boxes 5(a), 5(b), 6(a) and 6(b) of the GST-03 return.

The registered person who purchases imported services will have to record the following entries:

Description

Dr.

Cr.

Expense

100

Payable

100

(when invoice received from overseas supplier of services)

Description

Dr.

Cr.

Expense

100

Bank

100

Input tax

6

Output tax

6

(accounting for GST on reverse charge mechanism)

The amount of six will be reported in boxes 5(b) and 6(b) and the amount of 100 will be reported in boxes 5(a) and 6(a) of the GST-03 return.

Answered on September 17, 2015. 2015-09-17 09:10:20

I believe the tax code should be DS (or DS-IS for certain accounting system) for output tax and TX for input tax.

IS is a kind of input tax for imports under special scheme with no GST incurred (e.g. Approved Trader Scheme, ATMS Scheme).

on September 17, 2015. 2015-09-17 14:36:21

Thanks for the clarifications

on September 18, 2015. 2015-09-18 03:48:22
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