Sales & Service Tax (SST, Malaysia)
Sales and Service Tax (SST) is Malaysia's consumption-tax regime, reintroduced in 2018 to replace the Goods and Services Tax (GST). It has two components: a Sales Tax levied on the manufacture and import of taxable goods (at rates such as 5% or 10%), and a Service Tax on prescribed taxable services (at a standard rate, e.g. 6%/8%).
Unlike the multi-stage, creditable GST, SST is a single-stage tax — sales tax is charged at the manufacturer/import level (not reclaimable down the chain like input VAT), and service tax at the point of the taxable service. On imports, sales tax is collected by Customs at the border alongside any duty. For businesses importing, manufacturing or supplying services in Malaysia, correctly determining SST liability, rates and exemptions — and accounting for import sales tax — is a core tax-compliance requirement that ERP and customs systems must handle. Understanding SST (and how it differs from a VAT/GST) is essential to pricing and compliance in Malaysia.
SST is how consumption is taxed in Malaysia, and because it is single-stage (not creditable like GST/VAT), it changes pricing and cost structures — sales tax sticks at the import/manufacture level. Getting SST rates, liability and import collection right is a core compliance and pricing requirement for anyone trading, making or servicing in Malaysia.
How is SST different from GST?
SST is a single-stage tax (sales tax at import/manufacture, service tax on services) and is generally not reclaimable down the chain, unlike the multi-stage, creditable GST it replaced in 2018.
How is SST handled on imports?
Sales tax on taxable imported goods is collected by Customs at the border, along with any import duty.