29 November 2018
Dear Members,
MATTA has been in frequent communication with the Royal Malaysian Customs Department (RMCD) to seek clarification and to present our position on issues arising from the reintroduction of Service Tax 2.0.
Of major concern to MATTA is the treatment of self-owned Excursions Bus services which are bundled into our tour packages – would this cause the Bus Service and tour package to be subject to Service Tax?
MATTA has submitted numerous write-ups and technical memoranda to raise this issue many times to the RMCD, and even directly to the head of the RMCD, highlighting our plight and our position.
We present herewith a much-awaited clarification that RMCD has recently provided to MATTA. In the RMCD's latest reply dated 15 November 2018 (received on 26 November 2018 by post), the major clarification provided by RMCD on Excursion Bus services are as follows :-
Category: Owner of excursion bus sells own tour package.
1. In view that the tour package has transportation bundled inside it, is there any service tax chargeable on the whole tour package?
RMCD: The sale of tour package is not subject to service tax.
Category: Owner of excursion bus rents out bus (with driver) to other persons.
2. Does the bus owner need to charge SST on the “rental with driver”?
RMCD: Rental of bus driver is considered as provision of excursion bus service and subject to service tax under item 7 of Group I in the First Schedule of the Service tax Regulations 2018.
Category: Owner of excursion bus rents out bus (without driver) to other persons.
3. Does the bus owner need to charge SST on the “rental without driver”?
RMCD: Rental of bus without driver is considered as provision of excursion bus service and subject to service tax under item 7 of Group I in the First Schedule of the Service Tax Regulations 2018.
Category: Tour operator does NOT own any excursion bus.
4. Is there any SST charged on the sale of tour package by Tour Operator ?
RMCD: The sale of tour package is not subject to service tax.
Category: Tour operator is licensed under Land Public Transport Act 2010 but needs to rent additional buses from other bus owners.
5. Is there any Service Tax charged on the sale of tour package by Tour Operator ?
RMCD: The sale of tour package is not subject to service tax.
Quick links are available below:-
Members can also refer to the MATTA website for the previous clarifications on treatment of the Sales & Service Tax (SST).
For more information on Sales & Service Tax (SST), kindly refer to RMCD official website at https://mysst.customs.gov.my/
Thank you.
Yours sincerely,
PHUA TAI NENG
Chief Executive Officer