| # ATMS Code - Customers If a company is registered for Approved Toll Manufacturer Scheme (ATMS), the supplier selling goods or services must not charge GST and the company must not book Output Tax on such supplies. ATMS allows an approved taxable person (toll manufacturer) to disregard value added activities (contract services) on the goods belonging to a person who is not a citizen of Malaysia (overseas principal). An approved taxable person, performing value added activities that involve handling or processing of the goods for an Overseas Principal, can apply for the ATMS as an Approved Toll Manufacturer, subject to the specified conditions. According to the ATMS, the supply of value added activities (such as processing charges or toll), provided by the Approved Toll Manufacturer (ATM) for and to the Overseas Principal, must be exempted under section 72(1) of the GST Act 2014. The toll manufacturer receives the goods sent by the Overseas Principal for processing. After processing, most of the goods (at least 80%) must be sent back to the Overseas Principal or to a country specified by the Overseas Principal. The remaining goods (maximum 20%) can be shipped to the local customer of the Overseas Principal. GST on the processed goods or finished goods, delivered by the ATM (for the overseas principal) to a local customer (GST registered person or non-GST registered person), is accounted for, by the local customer using “Recipient Accounting” (the local customer accounts and pays the tax although the customer has not supplied the goods). |