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Postponement of Implementation of Service Tax on Goods Delivery Services

Updated: Aug 25, 2022

Budget 2022's Proposal

During the announcement of the 2022 budget, it was proposed that the scope of application of the Service Tax be expanded to include services related to the delivery of goods, regardless of the status of the service providers (whether licenced or not).

However, the delivery of food and beverages and logistic services would be exempt from the tax.

This proposal is scheduled to go into effect on July 1, 2022. However, on the 30th of June 2022, the Royal Malaysian Customs Department announced that the implementation of expansion in the scope of taxable delivery services had been postponed to a later date that will soon be announced.

Before this announcement, the affected service providers, such as e-commerce platforms, expressed their concerns about the implementation's lack of information and the insufficient time to prepare as required.

A sigh of relief can be heard from the service providers as a result of this postponement, as it will give more time to study the particulars of the proposed expansion and acquire clarity to be sure that the implementation can be carried out without any hitches.