pros and cons of GST registration

If a company is not required to register, is it beneficial to register for GST?


It depends. If you are required to register for GST, you have no choice. Otherwise however, you should consider the following pros and cons of GST registration:

Benefits
To the government

1. It generates a stable and predictable tax income in both good and weak economic environment.
2. It is an efficient tax due to the comparatively lower cost of administration and collection.
3. It allows the Government to lower corporate and personal income taxes(going to propose when GST implemented)  This leads to overall economic growth.

To businesses and individuals

1. Most large, established businesses are GST registered - getting your business GST registered is often a signal to customers that your business is an established business and has certain size.
2. GST is a fairer tax system. It taxes the self-employed and wage earners only when they spend their money.
3. Cost of doing business is reduced, thereby contributing to lower prices. Businesses do not suffer a tax cost due to the multi-stage credit mechanism since the real taxpayer is the end-user.

Drawbacks

1. The disadvantage of GST registration is the administrative burden that comes with discharging the duties and responsibilities of GST registration.
2. One must either study the intricacies of GST or pay an accountant to undertake this work which in some cases can be a reasonably high cost.
3. Being GST registered effectively increases your selling price by 4%. Your customers who are not GST registered would not be able to recover the GST you charge. So although your costs are reduced because you can recover GST, your customers might not be too pleased.
4. GST can be a burden to lower income groups, especially during times of high inflation when the 4% tax is paid on the increasing price of daily essentials.

GST when exporting goods or services out of Malaysia

Must a Malaysia company collect GST when exporting goods or services out of Malaysia?


No. Export goods and services are called zero rated supplies and GST tax is not applicable.

GST registered

If a Malaysian company is not GST registered, can it collect GST tax?


No. Goods and Services Tax in Malaysia can only be collected by GST registered entities.

claim back from the tax authorities

When paying GST tax collected from customers, can your company offset the GST tax charged by its suppliers?

Yes. The GST charged by a company to its customers is known as output tax whereas GST paid by the company to its suppliers is called input tax. What you pay to (or claim back from) the tax authorities is difference between your output and input tax.

are your company need to register go GST ?

Are your companies required to collect GST tax?

unless your company is mandated to register for GST if your annual turnover exceeds RM500,000.00

General Accounting Discussions: DEVELOPMENT OF CHART OF ACCOUNT

Basically there are two approaches to prepare the chart of account of a company.


1) In the first approach, cost heads are separately opened for the cost of goods, administrative expenses,
.marketing and business promotion expenses. In this case grouping of chart of account is kept in mind at the time of data entry and the list of chart of account also becomes lenghty.

2) In the second approach, cost heads are not repeated. A generic list of cost heads are prepared and these are linked with the departments and products / projects. Software itself pick the relevant department and product / projects to prepare the desired grouping. In this approach data entry operator is not required to look at the groupoing because it is processed by system itself.

Kindly provide your comments that which one of the approach is the best one with its justification.
And which one approach is being used in the current scenartios by large organizations.

VIvienna

GST - what does it mean for a company?

If you are GST registered, you are required to collect GST tax from your customers for the goods and services rendered by your company and then pay the collected tax to goverment .

As an example, if you charged $1,000 for your goods or services to a customer, you must invoice your customer $1,040 ($1,000 for your service plus 4% GST).

This GST amount in the invoice (appropriately must be called a Tax Invoice) collected on behalf of goverment from your customer must be sent to Malaysia tax department on a montly, quarterly or half yearly basic via GST tax filing.