Sales Tax Act 2018: Amendment of Sections 39, 43, 82 and 96

“Section 39 – Refund Of Sales Tax, Etc., Overpaid Or Erroneously Paid” is read as follows:-

39(1) The refund of whole or any part of the amount of sales tax, which has been paid to the Director General by the registered seller, may be made or claimed under prescribed circumstances.

39(2) Notwithstanding subsection (1), the Director General may withhold the whole or any part of the amount to be refunded under subsection (1) to be credited to any following or subsequent taxable period and the Director General shall treat the amount credited as payment or part payment received from the registered seller.

39(3) The Director General may make such refund in respect of the claim under subsection (1) after being satisfied that the person has properly established the claim.

39(4) The Director General may reduce or disallow any refund due in respect of the claim under subsection (1) to the extent that the refund would unjustly enrich the person referred to in subsection (1).

39(5) A claim for refund under this section shall be supported by such evidence as required by the Director General.

“Section 43 – Customs Ruling” is read as follows:-

43(1) [Application made in prescribed form with prescribed fee]

Any person may apply, in the prescribed form together with the prescribed fee, to the Director General for a customs ruling in respect of any one or more of the following matters:

1. the classification of taxable goods;
2. the determination of a taxable person;
3. the principles to be adopted for the purposes of determination of sale value of taxable goods; or
4. any other matters as determined by the Director General.

43(2) [Timing for application]

An application for a customs ruling under subsection (1) may be made—

1. in respect of imported goods—
   1. at any time before the goods, that are the subject matter of the application, are to be imported or intended to be imported into Malaysia; or
   2. at any later time, if permitted by the Director General; or
2. in respect of manufactured goods—
   1. at any time before the goods, that are the subject matter of the application, are to be manufactured; or
   2. at any later time, if permitted by the Director General.

43(3) [Withdrawal of application]

An applicant may withdraw his application at any time before a customs ruling is made and any payment made relating to the application for the customs ruling shall be forfeited by the Director General. “Section 82 – goods seized in respect of which there is no prosecution, or the proceeds of sale thereof, are forfeited if not claimed” is read as follows:-

82(1) [When goods deemed forfeited]

If there is no prosecution with regard to any goods seized under this Act, the goods or the proceeds of sale of the goods which are held pursuant to paragraph 71(1)(c) shall be deemed to be forfeited at the expiration of thirty days from the date of the notice of the seizure of the goods is given under subsection 69(3) unless, before the expiration—

(a) a claim to the goods or the proceeds of sale of the goods is made under subsection (2);

(b) a written application is made for the return of the goods under paragraph 71(1)(a) or (b); or

(c) the goods are returned under paragraph paragraph 71(1)(a) or (b).

82(2) [Notice of claim]

Any person asserting that he is the owner of the goods or the proceeds of sale of the goods, as the case may be, and that the goods or the proceeds of sale of the goods are not liable to forfeiture may, personally or by his agent authorized in writing, give written notice to any senior officer of sales tax that he claims the same.

82(3) [Referral to Director General]

If there is a claim or a written application made within the period of thirty days referred to in subsection (1) and there is no prosecution with regard to the goods, the senior officer of sales tax shall, on the expiration of the period of thirty days, refer the claim or the application to the Director General.

82(4) [Directions of Director General]

Upon reference by the senior officer of sales tax under subsection (3), the Director General may direct such senior officer of sales tax—

(a) to release such goods or the proceeds of sale of such goods or the security furnished under paragraph 71(1)(a) or subsection 71(2); or

(b) by information in the prescribed form, to refer the matter to a Sessions Court Judge for a decision.

82(5) [Issuance of summons]

The Sessions Court shall issue a summons requiring the person asserting that he is the owner of the goods or the proceeds of sale of the goods, and the person from whom the goods were seized, to appear before him, and upon their appearance or default to appear, due service of the summons being proved, the Sessions Court shall proceed to the examination of the matter, and upon proof that an offence against this Act has been committed and that the goods were the subject matter or were used in the commission of the offence—

(a) shall order the goods or the proceeds of sale of the goods or the amount secured under paragraph 71(1)(a) or subsection 71(2) to be forfeited; or

(b) in the absence of such proof, may order the release of the goods or the proceeds of sale of the goods or the security furnished under paragraph 71(1)(a) or subsection 71(2).

82(6) [Application of s 83 to proceedings under sub-s (5)]

In any proceedings under subsection (5), section 83 shall apply to the person asserting that he is the owner of the goods or the proceeds of sale of the goods and to the person from whom the goods were seized as if the owner or person had been the accused in a prosecution under this Act.

“Section 96 – Review And Appeal” is read as follows:-

96(1) [Application for review]

Any person aggrieved by any decision of the Director General may apply to the Director General for review of any of his decision within thirty days from the date the person has been notified of such decision provided that no appeal has been made on the same decision to the Customs Appeal Tribunal or court.

96(2) [Prescribed form]

An application for review under subsection (1) shall be made in the prescribed form.

96(3) [Notification of decision]

Where an application for review has been made under subsection (1), the Director General shall make the review and notify the decision of the review to the person, where practicable, within sixty days from the date of the receipt of such application.

96(4) [Matters relating to compound]

No review may be made in any matter relating to compound.

96(5) [Appeal against Director General’s decision]

Any person aggrieved by any decision of the Director General under subsection (3) or any other provision of this Act, except any matter relating to compound, may appeal to the Customs Appeal Tribunal in writing within thirty days from the date of notification of the decision to the aggrieved person.

96(6) [Tax payable notwithstanding review or appeal]

Any sales tax due and payable under this Act shall be paid notwithstanding any review or appeal has been made under this section.

These sections established the rules and processes related to refund claims, customs rulings, seized goods, and reviews/appeals, each with specific conditions and procedures.

Finance (No. 2) Bill 2023

Finance (No. 2) Bill 2023 proposes Amendment of sections 39, 43, 82 and 96.

Section 39: Refund of Sales Tax

It outlined the conditions under which a registered seller could claim a sales tax refund. The process and documentation requirements were specified.

• Amendment: Change in language to “in the form and manner as determined by the Director General.”
• Impact: Provides flexibility for the Director General to specify the format and procedure for refund claims.

Section 43: Customs Ruling

This section allowed any person to apply for a customs ruling regarding matters like the classification of taxable goods or determining a taxable person. The application form and fee were prescribed.

• Amendment: Change in language to “Any person may apply to the Director General, in the form and manner as determined by the Director General together with the prescribed fee.”
• Impact: Empower the Director General to determine the application format and method, enhancing procedural efficiency.

Section 82: Goods Seized

This section detailed what happens to goods seized under the Act if there is no prosecution. Goods or sale proceeds would be deemed forfeited after a specific period unless certain actions were taken.

• Amendment: Substitution of “in the prescribed form” with “in the form and manner as determined by the Director General.”
• Impact: Enables the Director General to set the format for matters related to seized goods, ensuring uniformity and clarity.

Section 96: Review and Appeal

This section explained the process for a person aggrieved by the Director General’s decision to apply for a review. The application form and timeframe were prescribed. Appeals against decisions could be made to the Customs Appeal Tribunal.

• Amendment: Substitution of “in the prescribed form” with “in the form and manner as determined by the Director General.”
• Impact: Grants the Director General authority to decide the application format for review requests, promoting administrative adaptability.

These amendments aim to enhance the Director General’s authority in determining procedural details, ensuring a more responsive and efficient administration of sales tax regulations. The impact is procedural and administrative, contributing to streamlined processes without altering substantive tax obligations.