GST: Types of GST

Basically there are 3 categories of goods & services under the GST scheme in Malaysia:

1) Standard-rated GST
Goods & services in this category will be charged a tax rate of 6% at every stage of the supply chain. The tax is billed and collected by businesses and paid to the government. Each party, except the final consumer, can claim back credits on the GST they already paid (know as input tax). E.g. car, fruits & cloth.

2) Zero-rated GST
Goods & services in this category will be charged 0% GST. This means that GST is not charged to the final consumer. However, businesses can claim back credits on their input tax. E.g. meat, fish & cooking oil.

3) Exempt-rated GST
Goods & services in this category will be non-taxable and are not subject to GST at the output stage. This means that GST is not charged to the final consumer. However, it also means that businesses, especially the final party in the supply chain (before the final consumer) cannot claim back credits on their input tax even if they might have incurred it earlier on. E.g. residential property and health care services.

Information courtesy of Loanstreet.