SST Exemption Application (Malaysia)

A SST Exemption Application in Malaysia sets out the particulars an applicant must provide to obtain the approval concerned.

Under the Sales Tax Act 2018, exemptions are granted through several mechanisms. Schedule A of the Sales Tax (Goods Exempted From Sales Tax) Order 2018 lists goods that are wholly exempt from sales tax — including basic foodstuffs (rice, flour, cooking oil, sugar), medicines, agricultural produce in raw form, printed educational materials, and goods exported from Malaysia. No application is required for Schedule A goods; they are automatically exempt by operation of law. Schedule B of the Sales Tax (Persons Exempted from Payment of Tax) Order 2018 covers raw materials, components, and packaging purchased free of sales tax by licensed manufacturers for use in producing taxable finished goods — manufacturers must hold a valid manufacturing licence and issue a Schedule B exemption letter to their suppliers, authorised by RMCD. Schedule C covers specific industry exemptions — for example, oil and gas exploration equipment, medical devices for hospitals, and agricultural machinery — which require a specific application and RMCD approval.

Under the Service Tax Act 2018, service tax exemptions are built into the First Schedule to the Service Tax Regulations 2018, which limits taxable services to specific prescribed categories. Services not listed in the First Schedule are not taxable, so no exemption application is required for those. However, specific exemption applications may be required where a taxable service provider provides services to an entity that qualifies for service tax relief — for example, services provided to a diplomatic mission or consulate under Section 20 of the Service Tax Act 2018.

SST exemption applications are submitted through the RMCD MyST portal (mysst.customs.gov.my) or by paper application to the relevant RMCD processing centre. RMCD aims to process exemption applications within 14 working days for straightforward cases and up to 30 working days for complex manufacturing-related exemptions requiring site inspection.

The legal framework governing the SST Exemption Application (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a SST Exemption Application (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Sales Tax Act 2018 and Service Tax Act 2018 set the foundational requirements.

An SST Exemption Application is needed in specific circumstances where relief from SST is not automatic but requires RMCD's explicit approval.

An SST Exemption Application is required when a licensed manufacturer needs to formalise its Schedule B raw material exemption with RMCD. While the Schedule B exemption is available to all licensed manufacturers under the Sales Tax (Persons Exempted from Payment of Tax) Order 2018, the manufacturer must notify RMCD of the types of raw materials it intends to purchase exempt, the quantities, and the taxable goods being manufactured — this is done through a formal exemption application or the manufacturing licence registration process.

An SST Exemption Application is needed when a company operates in a designated area — such as the Labuan Federal Territory, the Langkawi island duty-free zone, the Tioman island duty-free zone, or a licensed warehouse (LMW) — and seeks a specific exemption from sales tax on goods brought into or consumed within the designated area under the Sales Tax (Exemption) Order 2018.

An SST Exemption Application is required when a hospital, clinic, or healthcare provider seeks exemption from sales tax on imported medical devices, diagnostic equipment, or pharmaceutical products. The RMCD medical devices exemption requires documentary evidence of import approval from the Medical Device Authority (MDA) under the Medical Device Act 2012 and a description of the intended medical use.

An SST Exemption Application is needed when an oil and gas company operating under a Production Sharing Contract (PSC) with PETRONAS seeks exemption from sales tax on imported exploration and production equipment. Such exemptions are approved by the Ministry of Finance and administered by RMCD through a dedicated exemption order.

An SST Exemption Application is required when an approved service provider seeks to issue SST-exempt invoices to a diplomatic mission or consulate entitled to SST relief under Section 20 of the Service Tax Act 2018 and the Vienna Convention on Diplomatic Relations (acceded by Malaysia in 1965).

A complete SST Exemption Application for Malaysia must contain the following essential elements.

Applicant Identification: The full legal name, SSM registration number, existing SST registration number (if already registered), and business address must be stated. For manufacturers, the RMCD sales tax licence number must be provided.

Type of Exemption Applied For: The application must clearly identify the legal basis for the exemption — whether under Schedule A (goods exempt by law), Schedule B (manufacturer's raw material exemption), Schedule C (industry-specific exemption), or a specific exemption order. For service tax, the relevant provision of the Service Tax Act 2018 or the Service Tax (Exemption) Order must be cited.

Description of Exempt Goods or Services: A precise description of the goods or services for which exemption is sought must be provided, including HS tariff codes for goods and the value of the exempted supply. Vague descriptions delay processing; RMCD requires specificity to confirm that the goods fall within the exempted category.

Quantity and Value Estimates: For raw material exemptions (Schedule B), the estimated annual quantity and value of raw materials to be purchased exempt must be stated. RMCD monitors actual purchases against estimates and may query significant variances during audits under Section 35 of the Sales Tax Act 2018.

Business Justification: A brief statement explaining how the exempted goods or services are used in the applicant's business — particularly for Schedule C industry exemptions — must be provided. For manufacturing exemptions, the applicant should describe the manufacturing process and confirm that the exempt inputs will be incorporated into the taxable finished goods.

Supporting Documents: Copies of RMCD registration certificate, SSM incorporation documents, latest audited accounts, purchase orders or contracts for the exempt goods (if available), and any relevant Ministry approvals (e.g., MDA approval for medical devices, PETRONAS approval for oil and gas equipment) must be attached.

Authorised Signatory: The application must be signed by a director or authorised officer of the company, confirming the accuracy of all information and the applicant's understanding that misuse of an SST exemption is an offence under Section 45 of the Sales Tax Act 2018 attracting a fine of up to RM 50,000 or imprisonment.

Additional compliance elements for a SST Exemption Application (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.