SST Service Tax Payment Basis (SVTD)- QCA

Overview:

The Service Tax Payment Basis under the Sales and Service Tax (SST) determines when a business is required to remit service tax to the Royal Malaysian Customs Department (RMCD). Service tax by payment basic (SVTD) is based on the payment received basis. This means tax is only payable when the payment for the service is received from the customer.

Scenario:

1. On January 15, 2025, SAMPLE SOFTWARE SDN BHD completes a system upgrade for ABC Tech Solutions and issues an invoice for RM 10,000 + 6% SST (RM 600). The total invoice amount is RM 10,600.

Select SVTD-6% as tax code

Here is the double posting/ double entry for Invoice

System will post on deferred tax account first when invoice issued

Note:

 If generate SST RETURN this invoice will not show, as haven’t make payment yet.

2. ABC Tech Solutions makes the full payment of RM 10,600 on February 20, 2025.

Double posting/ double entry for Receive Payment

Since SAMPLE SOFTWARE SDN BHD follows the Payment Basis for SST, the service tax is only due when the payment is received. System will post to SST SERVICE TAX and deduct from SST DEFERRED TAX.
 Now the OR is show on SST RETURN 

Frequently Asked Questions: Service Tax Payment Basis

Why system is post to SST DEFERRED TAX when haven’t receive payment. Can go to Tax> Tax Codes> search for SVTD 6% and will notice there is additional column and system will post to the selected account.

Key Takeaways

Service Tax with Payment Basis (Tax code SVTD-6% and SVTD 8%): Service tax is due when payment is received, not when the invoice is issued.