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by on October 15, 2014 | Top Stories

Budget 2015 GST & EducationWith the implementation of GST in 2015, read on to find out what supplies will be exempted in the education sector. 

GST (Goods & Services Tax), which is also known as VAT or value-added tax in many countries is a multi-stage consumption tax on goods and services. Malaysia will implement GST beginning 1 April 2015.

For those in the education industry, the good news is that there are many supplies which will be GST-exempt.

First on the GST-exempt list are educational services and services related to the education provided to students by child care centres, pre-schools, and private primary and secondary schools registered under the Education Act 1961 (Act 43, 1961), the Education Act 1996 (Act 550), the Majlis Amanah Rakyat Act (Act 489), the Child Care Centre Act 1984 (Act 308), enactments related to the regulation of Islamic religious schools in the states of Perlis, Kedah, Penang, Perak, Selangor, Negeri Sembilan, Melaka, Johor, Pahang, Terengganu and Kelantan, Administration of Islamic Law (Federal Territories) Act (Act 505), Control of Islamic Religious Schools Enactment 1991 for Sabah or Sarawak Islamic Council Ordinance2001for Sarawak.

Second, educational services and services related to the higher education provided to students by private higher educational institutions approved under the Education Act 1996, the University and University Colleges Act 1971 (Act 30), the MARA Institute of Technology Act 1976 (Act 173), and the University of the Private Higher  Education Institutions Act 1996 (Act 555).

Third, food and drinks supplied by the canteen operators at pre-schools, and primary and secondary schools  (government, government-aided, and private) registered as mentioned previously, will also be exempted from GST.

In addition, these will also exempted from GST at schools and institutions that provide educational services – curriculum and course materials; excursions or outdoor activities; the provision of food and accommodation; transportation for students; administrative services (such as registration, the issuing of student cards and assessment services); examination services; and the supply of cleaning and maintenance services, electricity, gas and air conditioning as part of the provision of student accommodation.

Besides schools and private higher education institutions, child care services provided by child care centres registered under the Child Care Centre Act 1984 will also be exempted from GST. Child care services is defined as any form of child care services provided part-time or on a daily basis with payment, or as an employment benefit.

Reading materials including children’s colouring books, exercise and reference books, text books, dictionaries and religious books are also exempted from GST.

(Note: Pre-schools, primary schools, and private secondary schools mean a school or educational institution as defined in the Education Act 1996. “Educational institution” means a school or any other place where, in carrying out the work of an organisation or institution, people are usually taught in one or more classes; and includes a kindergarten and a distance learning centre, but does not include:

(a) any place where teaching is limited to the teaching of any religion; or

(b) any place categorised as a private education institution registered under the Education Act 1996 that provides tuition classes, or training in language; computer; skills; career, profession or occupation; commerce; enrichment centres or tuition centres; or

(b) any place that has been declared by the Minister through a notice, or has been gazetted, as not being an educational institution for the purposes of the Education Act 1996.)

Source: Goods and Services Tax (Exempt Supply) Order 2014, P.U. (A) 271, e-Federal Gazzette,13 October 2014.

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