Offences and Penalties

Under the GST Act 2014

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 Offences, Penalties, Liabilities Etc. Under GST
Section 33 (2) - Any registered person who:-
Fails to issue a tax invoice; or
Issues a tax invoice which does not contain any of the prescribed
particulars,
commits an offence.
(4) Any registered person under subsection (3) who issues a simplified
invoice which does not contain any of the prescribed particulars as
approved by the DG, or refuses to issue a tax invoice containing the
recipients name and address upon request by the recipient commits an
offence.
(6) Any recipient referred to in subsection (5) in relation to a self-billed
invoice, who:-
Issues a self-billed invoice without the approval of the DG;
Issues a self-billed invoice which does not contain any of the prescribed
particulars; or
Fails to comply with any prescribed condition imposed on him,
commits an offence.
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 Offences, Penalties Etc. Under GST

(10) No invoice showing an amount which purports to be a tax shall

be issued:-
By any person on any supply which is not a taxable supply, or by
any person who is not a registered person.
(11) Any person who contravenes subsection (10) commits an
offence and shall, on conviction, be liable to a fine not exceeding
thirty thousand ringgit or to imprisonment for a term not exceeding
two years or to both and a penalty of two times the amount of tax.

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 Offences, Penalties Etc. Under GST
(12) A tax invoice is not required where a registered person makes
the following supply:-
A zero-rated supply; or
A supply made without consideration on which tax is charged.
(13) No tax invoice shall be issued for:-
Any supply of second-hand goods under section 59;
Any supply of imported services; or
Any supply of treated goods or processed goods which is deemed to have
been supplied by the recipient under section 72 Approved Toll
Manufacturer Scheme.
(14) Any person who issues a tax invoice in contravention of
subsection (13) commits an offence.

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 Offences, Penalties Etc. Under GST
S (36) Duty to Keep Records
Must keep full and true records;
Preserved for seven years;
In national or English language;
Kept in Malaysia, except as approved by the DG;
Readily accessible and convertible if kept in electronic form;
If original is in manual form and converted to electronic form, then shall be
retained in its original form prior to conversion.
Any person who contravenes this section commits an offence and
shall, on conviction, be liable to a fine not exceeding fifty thousand
ringgit or to imprisonment for a term not exceeding three years or to
both.
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 Offences, Penalties Etc. Under GST

S (41) Furnishing of Returns and Payment of Tax

Any person who fails to furnish the return as required commits an
offence and shall, on conviction, be liable to a fine not exceeding fifty
thousand ringgit or to imprisonment for a term not exceeding three
years or to both.
Any person who fails to pay to the DG the amount of tax due and
payable commits an offence and shall, on conviction, be liable to a
fine not exceeding fifty thousand ringgit or to imprisonment for a
term not exceeding three years or to both.

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 S 53 Liability of Directors Etc.
S 53(1) Where any tax is due and payable, including penalty or any
other money is payable under GSTA by a company, limited liability
partnership, firm, society or other body of persons, the following will
together be jointly and severally liable:-
The directors of the company;
The compliance officer of the limited liability partnership. If none,
then any one or all of the partners;
The partners of the firm; or
Officials / committee members of the society or other body of
persons.

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 Enforcement
S 80 Senior GST officers have same powers of a police officer in
relation to enforcement, inspection and investigation, which is in
addition to powers provided under the GSTA.
S 81 - Full and free access to any place or premises.
- Must provide all reasonable facilities and assistance.
- Ask for and examine any documents, goods.
- Seize and detain any documents, goods.
- Require person to answer any question relating to the
documents, goods.
- Require any container, package, envelope or receptacle to be
opened; or
- Take samples of any goods/materials and make copies of any
documents, if necessary.
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 Enforcement
S 81 (4) If unable to obtain full and free access, can at any time
enter and open by force if necessary.
S 81 (5) Anyone who refuses to let the GST officer enter commits an
offence and upon conviction, shall be liable to a fine not exceeding
RM100,000 or maximum seven years imprisonment or both.
S 83 Search may be made without search warrant if the GST officer
has reasonable grounds to do so.
S 84 Power to stop and search.
S 85 Power to seize goods.
S 87 Power to arrest without warrant and search the person.

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 Offences and Penalty
S 89 - Whoever intends to evade or assist anyone else to evade tax
commits an offence and on conviction, be liable:-

For 1st offence fine between ten times and not more then
twenty times the amount of tax or imprisonment not
exceeding five years or both;
For 2nd and subsequent offence - fine between twenty times
and not more than forty times the amount of tax or
imprisonment not exceeding seven years or both.
Where tax amount cannot be determined fine between
RM50,000 and not more than RM500,000 or imprisonment
seven years or both.
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 Offences and Penalty
S 90 Penalty for improperly obtaining refund
Fine not exceeding RM50,000 or imprisonment not exceeding
three years or both; and
Penalty of two times the amount refunded.
S 91 Offences relating to goods, invoices and receipts
Fine not exceeding RM30,000 or imprisonment not exceeding two
years or both Anyone who deals or acquires goods or supply of
services with knowledge that tax has been or will be evaded.
Fine not exceeding RM30,000 or imprisonment not exceeding
three years or both and penalty of two times the amount of tax
Any person who is not registered and who issues an invoice or
receipt showing an amount as being tax.
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 Offences and Penalty
S 92 Obstructing or fails to give reasonable assistance or facilities to
GST officer
Fine not exceeding RM100,000 or imprisonment not exceeding
seven years or both.
S 93 Refusing to give answer or give false information
S 96 General penalty.
Where no penalty is provided for in GSTA, then the penalty will be
fine not exceeding RM30,000 or imprisonment not exceeding two
years or both.

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 Offences and Penalty
S 97 Offences by bodies of persons etc.
S 97 (1) Where a company, limited liability partnership, firm, society,
association or other body of persons commits an offence, any person who at
the time of the commission of the offence was a director, compliance officer,
partner, manager, secretary or other similar officer of the company, limited
liability partnership, firm, society, association or other body of persons or
was purporting to act in the capacity or was in any manner or to any extent
responsible for the management of any of the affairs of the company, limited
liability partnership, firm, society, association or other body of persons or
was assisting in the management, shall be deemed to be guilty of the offence
unless, having regard to the nature of his functions in that capacity and to all
circumstances, he proves:-
That the offence was committed without his knowledge, consent or
connivance; and
He took all reasonable precautions and had exercised due diligence to
prevent the commission of the offence.
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 Offences and Penalty
S 97 (2) Where any person would be liable to any punishment,
penalty or forfeiture for any act, omission, neglect or default, he
shall be liable to the same punishment, penalty or forfeiture for
every such act, omission, neglect or default of any employee or
agent, or of the employee of the agent, provided that it was
committed by:-
The employee in the course of his employment;
The agent when acting on behalf of the person; or
The employee of the agent when acting in the course of his
employment in such circumstances that had the act, omission,
neglect or default been committed by the agent, his principal
would have been liable under this section.
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 Burden of Proof

S 102 The burden of proof lies with the accused.

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 Imprisonment for Non-Payment of Fine
S 111 If unable to pay any fine, then period of imprisonment will be
imposed as follows:
Amount of Fine Maximum Period of Imprisonment
Does not exceed RM5,000 2 months
Above RM5,00 up to RM10,000 4 months
Above RM10,000 up to RM20,000 6 months

with additional two months for every RM10,000 after the first
RM20,000 of the fine up to maximum of 6 years.

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 Power to Assess
DG has power to assess in the following situations:-
Failure to register when taxable person has become liable to register;
Failure to furnish return;
Incomplete or incorrect return;
To obtain input tax credit which the person is not entitled;
To recover excess refund; or
With regard to goods on amount of tax which would have been chargeable
by reason that the goods have been supplied; exported, removed by way of
supply, lost or destroyed.
Assessment period:
Not more than six years from date tax due and payable for failure to
register, to furnish return or incomplete/incorrect return.
Not more than six years from date refund made for receiving excess refund.
No limitation of period if DG is of opinion that fraud or wilful default has
been committed.
 Tax Avoidance and Anti Avoidance Rules
Tax Avoidance is defined as taking advantage of lack of clarity in the
provision of the law to minimise tax liability.
The GST Act contains specific anti avoidance rules (SAAR) e.g. Sec 23
to treat persons as a single taxable person, Sec 66 on supplies
spanning change in rate, Sec 67 on adjustment of contracts on
changes in tax rate etc.
It also contains a catch all Sec 44 provision called general anti
avoidance rule (GAAR) which can be used on various forms of
arrangements and has an umbrella effect.
GAAR allows the DG to disregard or modify certain arrangements if he
is satisfied that such arrangements may give result in a tax advantage
to person(s) involved