SST basics for small businesses: sales tax and service tax

What is SST?

SST is the abbreviation for Sales & Service Tax — two separate taxes:

Tax	Scope	Administrator
Sales Tax	Manufacture & import of taxable goods	JKDM
Service Tax	Taxable services	JKDM

SST is not income tax — it is an indirect tax on goods and services, administered by the Royal Malaysian Customs Department (JKDM) through the MySST system. (Source: Official JKDM portal; https://www.customs.gov.my/ms ; MySST; https://mysst.customs.gov.my/ms)

Sales tax: scope & rates

Sales tax is imposed on manufacturers of taxable goods and imports of taxable goods. Rates:

• 10% — the general rate.
• 5% — for selected goods in the First Schedule (Sales Tax (Rates of Tax) Order 2018).
• Specified rates — for goods in the Second Schedule.

(Source: MySST — Business Registration; https://mysst.customs.gov.my/ms/registering-business/ ; Sales Tax (Rates of Tax) Order 2018 — P.U.(A) 221/2018; https://mysst.customs.gov.my/wp-content/uploads/2025/03/Sales-Tax-Rates-Of-Tax-Order-2018.pdf)

Registration threshold: RM500,000

Manufacturers or sub-contractors of taxable goods must register for sales tax if their sales value exceeds RM500,000 within a 12-month period (by the retrospective/forward-looking method). Voluntary registration is allowed below the threshold for manufacturers of taxable goods.

Service tax: rates

Service tax rates at the review date:

• 8% — general rate, from 1 March 2024.
• 6% — for food & beverage (F&B) services, parking, logistics and telecommunications.
• RM25 — for each credit/charge card (principal/supplementary), per year.

(Source: MySST — Background; https://mysst.customs.gov.my/ms/background/ ; MySST — Business Registration; https://mysst.customs.gov.my/ms/registering-business/)

Service registration threshold

Providers of taxable services must register if the value of their taxable services exceeds RM500,000 within a 12-month period. Voluntary registration is allowed for businesses with a value ≤ RM500,000. Imported taxable services are subject to service tax since 1 January 2019.

Sales tax on low-value goods (LVG)

• Low-value goods (LVG) means goods ≤ RM500 purchased online from abroad.
• LVG sales tax rate: 10%, in force from 1 January 2024.
• Sellers must register if the total value of LVG sales exceeds RM500,000 within a 12-month period.

(Source: Sales Tax (Rate of Tax for Low Value Goods) Order 2023 — P.U.(A) 404/2023; https://mysst.customs.gov.my/wp-content/uploads/2025/03/Perintah-Cukai-Jualan-Kadar-Cukai-Bagi-Barang-Bernilai-Rendah-2023.pdf ; MyLVG (JKDM) — FAQ; https://mylvg.customs.gov.my/FAQ)

Registration & compliance via MySST

SST registration and compliance are done through the MySST system (mysst.customs.gov.my) and include:

• Business registration (mandatory or voluntary).
• Monthly returns and payment (SST-02) — the specific return date has not been verified in this review — this item still awaits official confirmation from HASiL — check again with HASiL before deciding.
• Issuing invoices and record keeping.

(Source: MySST; https://mysst.customs.gov.my/ms ; MySST — FAQ; https://mysst.customs.gov.my/ms/faq-services-tax/)

What is not yet verified this item still awaits official confirmation from HASiL — check again with HASiL before deciding.

• The complete list of taxable services (First Schedule of P.U.(A) 214/2018) — do not list service groups without checking the regulations text.
• Specific SST non-compliance penalties/fines — no penalty schedule was verified in this review; refer to Act 806/807 — this item still awaits official confirmation from HASiL — check again with HASiL before deciding.
• The exact monthly SST-02 return date and the 2025 scope expansion details per category — this item still awaits official confirmation from HASiL — check again with HASiL before deciding.

Simple example

Kedai Bakery, a small F&B business, sells food and drinks with annual sales value below RM500,000 — it does not need to register for SST as long as it is below the registration threshold. If its sales value exceeds RM500,000 within a 12-month period, it needs to assess whether it falls under a taxable services category (F&B at the 6% rate) and register via MySST. (Illustrative example to show the concept — not specific tax advice.)

Frequently Asked Questions (FAQ)

Q. Is SST the same as income tax? A. No. SST is an indirect tax on goods and services administered by JKDM; income tax is administered by HASiL.

Q. When do I need to register for SST? A. When your sales value (taxable goods) or taxable services value exceeds RM500,000 within a 12-month period. Voluntary registration is allowed below the threshold — check with JKDM.

Q. Do all small businesses need to pay SST? A. Not necessarily. The RM500,000 threshold is a registration threshold — businesses below the threshold may not need to register or charge SST.

Q. What are the current SST rates? A. Sales tax 10% (general), 5% (First Schedule goods); service tax 8% (general) except F&B, parking, logistics & telecommunications at 6%; credit cards RM25 per year. Verify current rates with JKDM.

Q. Where do I register? A. Through the MySST system (mysst.customs.gov.my).

Glossary

• SST — Sales & Service Tax.
• JKDM — Royal Malaysian Customs Department (SST administrator).
• MySST — the official platform for SST registration, returns & payment.
• LVG — low-value goods (≤ RM500, purchased online from abroad).
• SST-02 — the monthly SST return.