PETALING JAYA: Only businesses that make RM500,000 and above a year will be subject to the Sales and Service Tax (SST) that will be reintroduced on Sept 1.

Companies that manufacture or import any goods that are not exempt under the SST must pay a sales tax of either 5% or 10%, the Customs Department said in a briefing to industry players and the media on Thursday.

In addition, those that provide services listed in the SST schedule must pay a 6% service tax.

In a briefing session on the sales tax, deputy director of the GST division Faizulnudin Hashim said that manufacturers and subcontractors that reach the threshold of RM500,000 a year will have to pay the SST.

Different rates of 5% and 10% will apply to goods which are not exempt, said Faizulnudin, although the sales tax for petroleum is different from other taxable goods.

Manufacturing activities that are exempt include tailoring, jewellers and opticians, he added.

Manufacturers that are liable to be registered are required to do so by Sept 1, when the SST will commence.

Automatic registration will be done for GST-registered entities that have been identified and which fulfilled the required criteria.

Those that are not automatically registered but are liable to do so will have to register within 30 days of Sept 1.

Nur Hanisah Dukes Abdullah from the Customs Department’s GST division also provided a list of proposed service providers that will be subject to the SST’s service tax portion.

However, she said a final decision on the services that will be taxed will be made after Parliament approval.

She also emphasised that only businesses making more than RM500,000 would be subject to the SST.

The proposed service providers that must pay the 6% service tax are:

> Hotels, irrespective of the number of rooms, including homestay operators

> Insurance and takaful providers

> Businesses involved in food and beverage preparation including restaurants and hawkers

> Clubs

> Gaming services

> Telecommunications

> PayTV

> Forwarding agents

> Legal services

> Accounting

> Surveying

> Architectural

> Valuers

> Engineering

> Consultancies

> Employment agencies

> Security services providers