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Goods worth not more than RM500 given FREE to the same person in the same year. The word ‘year’ in paragraph 5(2) (a) of the First Schedule of GSTA 2014 refers to ‘tax year ‘(financial year).
- not a supply
- not subject to GST
- Input tax is claimable
Example 1:
Company XY Sdn Bhd purchased 15 hampers worth RM200/hamper to be given to each of his employees.
- every employee will get one hamper FOC
- no need to account for output tax
- Input tax on 15 hampers = RM180.00 (6% x RM3,000.00) is claimable
Example 2:
Company CX Sdn Bhd has purchased a watch worth RM400.00 and gave it to one of the director’s son.
- The gift is not subject to GST because its value is less than RM500.00 (gift rule)
- input tax incurred on the purchase is claimable
Example 3:
A Company purchased a laptop worth RM1,500.00 and gave the laptop to a director’s son as a gift.
- GST on the laptop must be accounted for by the company as output tax
- the value of the goods is more than RM500.00
Example 4:
A company purchased a laptop worth RM1,500.00 three years ago. Currently the company has given the laptop to one of his business partners. For the purpose of accounting GST, the company has to use open market value of the goods now where the value of the goods is RM450.00, i.e. the value of the goods has depreciated.
- no need to account for output tax on the gift
- the value of the goods is less than RM500.00. (Gift rule applicable)
Example 5:
Company C rewarded RM5,000.00 to his best employee of the year.
- not subject to GST
- money is neither goods nor services
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What it means year as Tax Year (Financial Year)?
For example....
GST Effective Date: 01 Apr 2015
Financial Start Date: 01 Jul 2014
First tax year will be: 01 Apr 2015 - 30 Jun 2016 (15 months) - Gift rule Rm500 per person per tax year
Second tax year will be: 01 Jul 2016 - 30 Jun 2017 (12 months) - Gift rule Rm500 per person per tax year
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