KUALA LUMPUR (July 31): The Federal government tabled the Sales Tax Bill 2018 and Services Tax Bill 2018 (SST Bills) for their first reading in the Dewan Rakyat today.

In the explanatory statement to these two Bills, the government said they seek to provide for the charging, levying and collecting of sales and services tax, and for matters connected with it.

The Sales Tax Bill seeks to provide for the tax to be charged and levied on any taxable good manufactured in Malaysia and sold, used or disposed of by a registered manufacturer, or taxable goods imported into Malaysia by any person.

In Section 3(1) of the Sales Tax Bill, the word "manufacture" is defined as "in relation to goods other than petroleum, the conversion by manual or mechanical means of organic or inorganic materials into a new product by changing the size, shape, composition, nature or quality of such materials and includes the assembly of parts into a piece of machinery or other products, but does not include the installation of machinery or equipment for the purpose of construction; and in relation to petroleum, any process of separation, purification, refining, conversion and blending" .

In terms of rate, the Bill proposed that it should be determined by the Finance Minister, who is also empowered to vary or amend the rate.

Meanwhile, the Services Tax Bill seeks to provide for the tax to be charged and levied on any taxable services provided in Malaysia by a registered person in the course of carrying on a business.

The Bill also seeks to empower the Minister to prescribe any service to be a taxable service, as well as determine and amend the tax rate.

Apart from the two Bills, Putrajaya also tabled the Goods and Services Tax (Repeal) Bill 2018 to repeal the Goods and Services Tax Act 2014 (GST Act).

This Bill also seeks to provide for the continuance of liability, whereby any liability incurred may be enforced or any GST due, overpaid or erroneously paid may be collected, refunded or remitted under the repealed Act as if the Act had not been repealed.

Meanwhile, the government also tabled two other Bills to amend the Free Zones Act 1990 and Customs Act 1967, which are consequential to the implementation of SST Bills and repealing of the GST Act.

The amendments to Free Zones Act are mainly to remove duplications of provisions which have already been provided for under the SST Bills.

Amongst the amendments on the Customs Act, notable ones include increasing the penalty on the offence relating to a customs agent acting without approval, from the present fine of not exceeding RM500 to imprisonment for a term not exceeding five years or to a fine not exceeding RM100,000, or both.

The second reading of all the Bills will be done in this Parliament sitting ending Aug 16 this year.