About GST System Changes

GSTSystemChanges 330About GST System Changes

Goods and Services Tax (GST) has implemented in Malaysia since April 1, 2015. Businesses and corporates are now adopting themselves for GST mechanism with better understanding and thorough knowledge. However, GST has too wide in its operation and its knowledge domain can classify as GST Registration, GST Operation, GST for Special Industries, GST Laws and many other specific topics. 

SW Project Consulting Sdn Bhd created GST System Changes as a term to be used in GST knowledge domain. GST System Changes is a framework for GST compliance, GST Review and GST Audit. It changed how the businesses were doing from the point of tax mechanism and system mechanism. When most of the businesses are being asked to be GST compliance, it shall look into the mechanism compliance and software compliance.


GST mechanism compliance has four sections that addresses the following:

  1. GST operation and practice
  2. Pre-filing checklist
  3. Preparation for GST-03 submission and payment of tax
  4. Periodic review

GST software compliance may not be compulsory as there are many software, in term of customization, overseas controlled application, partial GST compliant software, integration and many other technical areas to stop the businesses to source for a fully GST compliant software. In addition, overseas practice is not bundling a tax mechanism into accounting software as GST and accounting are two different mechanisms.

In term of GST software compliance, the following areas shall assess from time to time to make proper compliant:

  1. Duty to keep records
  2. Business logic on the operation and accounting software
  3. Internal controls of an operation and accounting software
  4. Generation of GST Audit File

GST review shall perform as part of compliant practice. It is an exercise to re-validate the GST-03 to ensure proper GST laws and mechanisms are properly reflected in the submission. In this situation, GST Audit File will use to analyze the accuracy of the Purchase and Supply sections that shall tally with GST-03. Whereas the Ledger section will use to spot check the potential pitfalls in the ledger accounting. If the GST-03 has been submitted and it is impossible to update financial accounts after closing, then it may keep a GST reconciliation schedule to keep track the differences between general ledger and GST-03.

Finally we may face the GST audit after GST System Changes. GST is a relatively new mechanism in Malaysia and yet to have full scale of GST audit being carried out. However, the authority will determine the areas of compliance from time to time to make sure businesses are complying with GST laws and regulations. It is the responsibility of the business to prepare for the GST audit even though the business may not fall into the selection criteria for GST Audit.