Input Tax Credit Refund Claiming

GST Input Tax Credit Refund Claiming in Malaysia

Input Tax Credit (ITC) refers to the materials and services that manufacturers purchase or obtain to manufacture an output, which is a product or service.

An input tax credit (ITC) is a credit for goods and services tax (GST) paid on purchases made or expenses incurred by a business.

You can still claim the credit & get a refund from the Customs Department even if you have not paid anything to your supplier.

GST Input Credit: Who is eligible to claim it?

If a person is making a taxable supply in Malaysia and meets the following criteria, he or she may be entitled to an input tax refund:

A tax has been incurred on inputs
There is an allowance for input tax
A taxable person is or is liable to be registered (e.g., someone who is or is liable to be registered)
The acquisition of goods or services in the course or furtherance of business
Any supply made outside Malaysia, which would be taxable if made in Malaysia, is a taxable supply if it is made in Malaysia

What is the procedure for claiming input credit under GST?

A tax invoice (of purchase) or debit note issued by a registered dealer is required. Credit will be available against the tax invoice upon receipt of the last lot or instalment if the goods are received in lots or instalments.
It is expected that he or she has received the goods or services.
It is necessary for him or her to possess a valid tax invoice with the correct name and address on it. When the tax invoice is not issued to the correct party and a claim on input tax is made, a penalty will be imposed.
He or she has deposited (or paid) the tax charged on their purchases to the government in cash or by claiming input credits from the supplier.
GST returns have been filed by the supplier. If you wish to claim input credit on purchases, all your suppliers must be GST compliant.

When a company registers for GST voluntarily, it is entitled to claim input tax from the day it becomes liable to register for GST. GST registration is subject to the same criteria as mandatory registration.

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