The taxpayer entered into an arrangement with a principal Goods Transport Agency (GTA) for the transportation of goods. The taxpayer, however, did not issue consignment notes but merely provided trucks for the transportation of goods.<\/span><\/p>\n Whether the transportation service provided by the taxpayer as a sub-contractor to the principal GTA is exempt from GST under Sl. No. 18 of Notification No. 12\/2017-Central Tax (Rate).<\/span><\/p>\n Background :<\/b> Issue : <\/b> Ruling:<\/b><\/p>\n The Technical Committee on SST Implementation convened on 24 October 2024 to discuss various concerns related to Sales and Service Tax (SST). Following these discussions, the Royal Malaysian Customs Department (RMCD) addressed technical queries raised by professional bodies. The responses have been documented in Lampiran 3 of Mesyuarat Jawatankuasa Teknikal Isu Pelaksanaan Cukai Jualan dan Cukai Perkhidmatan Bil. 2\/2024. (Note: The minutes of this meeting are still pending finalization and will be confirmed in the upcoming session.)<\/span><\/p>\n One of the significant matters discussed is outlined below:<\/span><\/p>\n A question was raised regarding whether a company transitioning from a Licensed Manufacturing Warehouse (LMW) to a sales tax-registered manufacturer would qualify for sales tax exemption on goods acquired under its LMW license (i.e., goods initially purchased without sales tax).<\/span><\/p>\n A discussion was held regarding the applicability of service tax on maintenance services provided in common areas to tenants under a lease agreement. Reference was made to <\/span>Example 5A<\/span><\/i> of the RMCD Guide on Management Services (dated 4 August 2021), where RMCD had previously clarified that maintenance management services in common areas were not subject to service tax. However, if such services were provided by the lessor within the leased premises, they would attract service tax. Given that <\/span>repair and maintenance services<\/span><\/i> were introduced as a taxable category under service tax laws effective 26 February 2024, the key question was whether maintenance or repair services carried out in common areas would now be subject to service tax.<\/span><\/p>\n A clarification was sought regarding the taxability of “free delivery” services, as referenced in <\/span>FAQ No. 8<\/span><\/i> of RMCD\u2019s Logistics Services Guide. The FAQ describes a scenario where an online platform offers free delivery as part of a promotion when a customer\u2019s purchase exceeds a certain threshold. The guide acknowledges that delivery services are taxable; however, it also states that the service tax on free delivery should be zero-rated. This interpretation appears to be a concession by RMCD, raising concerns about its alignment with the Service Tax Act, as taxable services\u2014whether provided for free or otherwise\u2014are generally subject to tax at their open market value. An amendment to clarify this position was suggested.<\/span><\/p>\n GST Implications on Sub-Contracted Goods Transportation: Classification as Vehicle Rental Service Background: The taxpayer entered into an arrangement with a principal Goods Transport Agency (GTA) for the transportation of goods. The taxpayer, however, did not issue consignment notes but merely provided trucks for the transportation of goods. Issue: Whether the transportation service provided by the taxpayer as a sub-contractor to […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[253],"tags":[],"class_list":["post-2353","post","type-post","status-publish","format-standard","hentry","category-indirect-tax"],"yoast_head":"\nIssue:<\/h4>\n
Ruling:<\/h4>\n
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Provisional Attachment of Bank Account under GST: Necessity of Tangible Material<\/b><\/h3>\n
\n<\/span>The Taxpayer\u2019s bank account was provisionally attached by the tax authorities under Section 83 of the CGST Act, 2017. The attachment was based on allegations that the Taxpayer had availed ineligible Input Tax Credit (ITC) under Section 17(5)(d) of the CGST Act. However, no specific material was brought on record to justify the necessity of such an attachment.<\/span><\/p>\n
\n<\/span>Whether the tax authorities can provisionally attach the Taxpayer\u2019s bank account without placing tangible material on record to establish that the Taxpayer is likely to defeat the demand.<\/span><\/p>\n\n
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Technical Committee Updates on Sales Tax and Service Tax Matters<\/b><\/h3>\n
Sales Tax Implications for Companies Shifting from LMW to Sales Tax-Registered Manufacturer<\/b><\/h3>\n
RMCD\u2019s Clarification:<\/b><\/h3>\n
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Service Tax Treatment on Maintenance and Repair Services in Common Areas<\/h3>\n
RMCD\u2019s Clarification:<\/h3>\n
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Service Tax Treatment on \u2018Free Delivery\u2019 Services<\/h3>\n
RMCD\u2019s Clarification:<\/h3>\n
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