0% GST Rate: Understanding the Zero-Rated Goods and Services
In Malaysia, the Goods and Services Tax (GST) was introduced in 2015, replacing the Sales and Service Tax. The GST system has a standard rate of 6%, but there are certain goods and services that are exempt from GST or are subject to a 0% GST rate.
What is the 0% GST Rate?
The 0% GST rate, also known as the zero-rated supplies, refers to goods and services that are subject to GST but are taxed at a rate of 0%. This means that businesses that supply these goods and services do not charge GST to their customers, but they are still eligible to claim input tax credits on their business inputs.
Zero-Rated Goods
The following goods are zero-rated under the GST system:
Basic Food Items
- Rice
- Sugar
- Flour
- Cooking oil
- Salt
- Fresh fruits and vegetables
- Meat, poultry, and seafood
- Eggs
- Dairy products
- Bread and other bakery products
Healthcare
- Medicines and pharmaceutical products
- Medical devices and equipment
- Healthcare services, including hospital and clinical services
Education
- Education services, including tuition fees for schools and universities
- Educational materials, such as books, stationery, and online resources
Transportation
- Public transportation, including bus and train fares
- Taxi services
Other Zero-Rated Goods
- Water and electricity supplies
- First 200 units of electricity per month for domestic consumers
- Residential properties
- Aircraft and parts thereof
- International transport services, such as air travel and shipping
Zero-Rated Services
The following services are also zero-rated under the GST system:
Financial Services
- Banking and financial services, including loans and credit facilities
- Insurance services
- Broking services
Tourism Services
- Accommodation services, such as hotel stays
- Tour packages
- Travel agency services
Other Zero-Rated Services
- Funeral services
- Certain professional services, such as accounting and legal services
- Welfare services, including childcare and elderly care services
Conclusion
In conclusion, the 0% GST rate is an essential aspect of the GST system in Malaysia, ensuring that essential goods and services are affordable and accessible to all. By understanding the zero-rated goods and services, businesses and individuals can take advantage of the benefits offered by this system.
