Employee Benefit

Q18. Can a taxable person avoid accounting for output tax when he gives free goods to his employees if he did not claim input tax when he actually entitled to claim the input tax?
A18. A taxable person is still required to account for output tax when the goods are given free to employees as employee benefits even though he did not claim input tax incurred on the goods

Q22. Are shares given free to employees subject to GST?
A22. Shares given to employees are an exempt supply. Therefore, you do not have to account for output tax.






Replaced Goods

136. Replaced goods for the purpose of GST may involve the following situations:

(a) Situation 1 – No Additional Charge

If you replace returned goods with similar goods, you may either:
(i) Let the original GST stands;
You need not account for GST on the replaced goods provided they are supplied free of charge.
(ii) If the seller decides to issue a credit note to cover the returned goods and issue a new tax invoice for the replaced goods. 

(b) Situation 2 – Reduced or Additional Charges

If the replaced goods are supplied at a lower price than the original goods, the seller may issue a credit note to account for the GST adjustment. On the other hand, if they are supplied at a higher price, the seller may issue a debit note to account for the additional GST. 


Source - Jabatan Kastam DiRaja Malaysia website (

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