What You Will Learn in This Guide
To know what is Sales & Service Tax (SST) and its impact on your business.
Step by step on how to set up Sales & Service Tax (SST) from your BackOffice
Important Notes
The new Sales Tax Bill governing the SST (Sales and Service Tax) will increase from 6% to 8% as of March 2024. But this does not apply for F&B businesses.
To learn more about Sales and Service Tax (SST), you may click on the link below here
Do You Need to Change your SST rate?
Here is a quick summary:
Are you an F&B business?
Are you an F&B business?
Yes? Then you do not have to increase your SST rate from 6% to 8%. However, you must still charge 6% as before.
Are you a manufacturer? (Click to expand)
Are you a manufacturer? (Click to expand)
Yes? You will be charged sales tax by customs if your annual revenue exceeds RM500,000
No? You won't be charged sales tax
Are you a service provider? (Click to expand)
Are you a service provider? (Click to expand)
Yes? If your annual revenue for your taxable services is greater than RM500,000 you have to charge your consumers a service tax (which is payable to Customs).
Yes? If your annual revenue for your taxable services is less than RM500,000, you won't have to collect service tax.
No? This does not apply to you.
Note: Not all businesses are required to charge SST, so let's begin by narrowing down your SST eligibility and what to do next.'
Yes, my business Is eligible for SST
2. Click Add Tax Code and name Tax Code Name as Service Tax, and add 6 or 8 to the Tax Rate, then click on Save
Note: This field is case-sensitive so you will need to input this exactly as service tax.
3. Now onto your products, where you must tag the relevant taxable products with a service tax tag; not all products in your Product List are taxable
Example:
If you run a coffee shop, only your food and beverage products are taxable and you would need to charge a 6% Service Tax on these items.
The only item that is not taxable is if you sell your packaged coffee beans.
This item should not be charged with 6% Service Tax.
Note: The most straightforward way to tag all taxable products would be to do it on your computer on your product CSV file.
4. Next, go to Products title page, then click Export to CSV
5. Open the uploaded CSV file on your computer using Excel or an equivalent programme
6. Look for the Tax Name column
7. For products that are eligible for Service Tax, fill in Service Tax in the Tax Name column
Notes:
Remember to fill in those words exactly and clear the field of any retail products.
For the F&B industry, do make sure all your food & beverage products are tagged with Service Tax in the Tax Name column.
For the Service industry, only tag services that are taxable with "Service Tax" in the Tax Name column.
8. Save the file as Comma Separated Values (.csv)
Note: Do not upload/import this CSV into your BackOffice yet, as you will need to decide on how you want to price these products/services that you have tagged as taxable.
Decide on a Pricing Strategy
I want to add SST on top of my current product prices
1. Import your updated CSV to update your product price list with the new tax code.
Notes:
Make sure you have completed the steps in Yes, my business is eligible for Service Tax.
Do this only on 31 August 2018 after you close your shift otherwise, you risk implementing SST before 1 September 2018; which is subject to possible penalties.
2. After you've imported your CSV and updated your price list, proceed to the last step!
I want to absorb SST and maintain my current prices.
1. If you want to retain your current prices and absorb SST costs, you will have to then reduce your tax-exclusive pricing by 6% or 8% depending on your industry.
Example:
A customer orders a glass of Milo Ais, priced at RM5.
Upon payment, 6% Service Tax needs to be added to be billed.
As such he will have to pay you RM5.30.
If you prefer to absorb the Service Tax costs, you will have to adjust the price of your Milo Ais to RM4.70.
Upon payment, 6% Service Tax will be added to the bill.
As such he will have to pay you RM5, therefore maintaining your current prices.
2. Now that you've exported a CSV file of your entire product list and added the relevant tax codes to the Tax Name column, you can start modifying your price list.
3. Open the CSV file of your exported product list.
Note: Do not change any part of the file except the price and tax.
4. Locate the Price column; the prices listed here are the tax-exclusive prices of your items.
5. Adjust your price to the lower tax-exclusive price and save the file as CSV.
Notes:
A simple formula - your Service Tax rate is 6%.
Divide the current price by 1.06 for all the relevant items.
6. Go back to BackOffice and head to Products, then click Import CSV and import the file you just created.
Add your SST ID to the BackOffice
Now, we've come to the last few steps where you'll need to add your new SST ID to the BackOffice.
2. Scroll down to fill in your SST Id No. and click Save.
3. Repeat for all the affected Stores in your business.
Remove Service Tax from Service Charge
If you do charge Service Charge, make sure you are not collecting any additional tax on top of your Service Tax.
2. Scroll down to Service Charge.
3. In the Service Charge Tax field, select None.
Update the Tax Name on Receipt Field
Finally, you can change the Tax Name on your store's receipt to reflect SST compliance.
1. Go to Settings, then click on Receipt Templates and choose your usual Receipt Template
2. In the Tax Name on Receipt field the word SST to meet compliance, then click Save
Setting Double Tax Rates
If your business sells products that fall in both the 6% and 8% SST tax categories, you'll need to assign the correct tax rates to each product.
1. Create a new tax code that is set to an 8% rate
2. Name the Tax Code (Example: SST 8%, SST Alcohol, etc)
3. Enter the Tax Rate (enter the number without the % sign)
4. Click Save
To assign the new tax code to a product:
1. Go to Products, and select a product you'd like to change the tax rate for
2. Scroll down to the Price field and click the tax drop-down
3. Select the tax code that you've just created
Example: For this Beer product, we're selecting the 8% SST tax code to be applied since it's an alcoholic beverage.
4. If both items taxed at 6% and 8% are purchased, the receipt will list both tax codes.
