Indirect Tax Alert
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Issue No. 41/2024 | 29 November 2024
Orders, regulations and notifications relating to Pulau 1 in Forest City, Johor
The following orders, regulations and notifications relating to Pulau 1 in Forest City, Johor were issued on 27 & 28 November 2024:
- Customs Duties (Pulau 1) Order 2024
- Free Zones (Amendment) Regulations 2024
- Excise (Amendment) Regulations 2024
- Customs (Prohibition of Imports) (Amendment) (No. 4) Order 2024
- Excise Duties (Pulau 1) Order 2024
- Sales Tax (Amendment) Regulations 2024
- Customs (Amendment) (No. 3) Regulations 2024
- Excise (Compounding of Offences) (Amendment) Regulations 2024
- Customs (Compounding of Offences) (Amendment) Regulations 2024
- Sales Tax (Compounding of Offences) (Amendment) (No. 2) Regulations 2024
- Sales Tax (Imposition of Sales Tax in respect of Designated Areas) (Amendment) Order 2024
- Service Tax (Imposition of Tax for Taxable Service in respect of Designated Areas relating to Pulau 1 and Special Areas) Order 2024
- Service Tax (Imposition of Tax for Taxable Service in respect of Designated Areas and Special Areas) (Amendment) (No. 2) Order 2024
- Appointment of Date of Coming Into Operation for Customs (Amendment) Act 2024
- Appointment of Date of Coming Into Operation for Excise (Amendment) Act 2024
- Appointment of Date of Coming Into Operation for Free Zones (Amendment) Act 2024
- Appointment of Date of Coming Into Operation for Sales Tax (Amendment) Act 2024
- Appointment of Date of Coming Into Operation for Service Tax (Amendment) Act 2024
We append below the key implications of the above orders, regulations and notifications for your attention:
Effective Date
The effective date of the following amendment acts and the above orders and regulations is 1 December 2024:
- Customs (Amendment) Act 2024
- Excise (Amendment) Act 2024
- Free Zones (Amendment) Act 2024
- Sales Tax (Amendment) Act 2024
- Service Tax (Amendment) Act 2024
Types of goods not subject to import duty and sales tax in Pulau 1
All dutiable or taxable goods imported into Pulau 1 or transported to Pulau 1 from the principal customs area will be subjected to import duty and sales tax except for the following goods:
- Intoxicating liquors
- Chocolates
- Perfumes
- Cosmetics
Excise duty on intoxicating liquors
All dutiable goods manufactured in Pulau 1, imported into Pulau 1 or transported to Pulau 1 from the principal customs area will be subjected to excise duty except for intoxicating liquors.
Duty free islands
The definition of duty free islands has been expanded to include Pulau 1. As such, certain customs, excise duty or sales tax treatments previously applicable to Labuan, Langkawi, Tioman or Pangkor will also be applicable to Pulau 1.
Retail trade in Pulau 1
Any persons who wish to sell by retail any goods which are declared by the Minister of Finance (MOF) as not subject to excise duty, import duty or sales tax must apply in writing to MOF for approval. If their applications are approved by MOF, the persons must comply with certain prescribed conditions. MOF may revoke the approval if the conditions are not met. The approved persons will be regarded as committing an offence if they do not comply with conditions prescribed by MOF and fine and/or imprisonment may be imposed on them upon conviction. Nevertheless, the offence is compoundable.
Service tax on taxable services relating to Pulau 1
Notwithstanding that the definition of “designated areas” include Pulau 1 for the purposes of service tax, service tax will be chargeable on taxable services provided:
- within Pulau 1
- between Pulau 1 and other designated areas
- between Pulau 1 and special areas.
PwC Comment
The above are the indirect tax implications of Pulau 1 in Forest City, Johor to be treated as a duty free island effective from 1 December 2024.
If you think your business may be affected by the above orders and regulations or if you need any clarification or assistance, please do not hesitate to contact us and we would be happy to assist you.
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