GST Insurance Forum | Malaysia Insurance Forum


GST for Malaysian will be implemented on 1st April 2014; so what do you know about GST and how it will impact policyholders, agents, brokers and insurers. Or, what you know we do not know or what we know you may not know….let us just share them over a forum.

Why not we go for forum discussion over this GST matter? If there is no good and effective forum online for GST on Insurance for us to articulate matters as well as acquiring specific information, why not have it here on Malaysia Insurance Online | Forum?


Some of the issues that I came across in the course of my work as underwriter are the following (of the cuff, which I thought were least understood

  1. Time of supply (TOS) – when is the best commencement date; should we set the TOS to start on the inception of the policy, at the time of hold cover or
  2. Exempt, Out of scope, Standard rated and Zero rated – what are these and how GST is to be imposed if policy is issued in such combination….
  3. Self-billing and the troublesome amendments that go with it….; you can’t just issue a tax invoice credit or debit note for any subsequent amendments on self-billing basis, which would mean any such amendments would have to be reverted to the other party that is obligated to collect the GST in the first instance.
  4. Premium quoted is always GST inclusive?
  5. Sum Insured is always inclusive of GST? Is this an auto-inclusion….?
  6. Central Administration Bureau (CAB) for facultative reinsurance and co-insurance – what is CAB planning to do for the members and is self-billing the way forward?


Something to start with….

I also read with interest the article about GST….where the following quote was made that sort of baffles me….

The implementation of the Goods and Services Tax (GST) in the insurance industry would benefit consumers, said Malaysian Insurance Institute (MII) chief executive officer Datuk Syed Moheeb Syed Kamarulzaman over at the ‘General Insurance Agent Convention 2014’. He said over a period of time, the claims cost is expected to go down, arrested by the GST due to the input tax credit that workshops and insurers can recover. At the end of the day GST would impact upon the overall industry statistics, moving forward.

So, what do you think? Is it true that GST would drive down claims costs? I definitely have reservations. …

Transitional GST issues aplenty

Customs has been kind enough to offer the industry a relief from GST for policies which span the pre and post GST period and are currently not subject to service tax (i.e. issued to individuals or non-business organisations) as follows:-

  1. Motor vehicle insurance supplied before 1 April 2015 and where the cover spans 1 April 2015 and beyond, the premium charged and paid in full or in part before 1 April 2015 for that supply is not subject to GST.
  2. Fire insurance supplied before 1 April 2015 and where the cover spans 1 April 2015 and beyond, the premium charged and paid in full or in part before 1 April 2015 for the supply is not subject to GST.

(Note: for business organisation, service tax of 6% would have been collected)

Article 183 (1) of Part XIX on the Transitional Provisions under the Goods and Services Act 2014, where it is stated that “Tax shall not be charged and levied on any supply of goods or services or importation of goods made before the effective date.” In view thereof all recoveries of pro-rated GST by member companies can only be done on or after the effective date of 1 April 2015.

This Article 183 would make things difficult for insurers during the transition period…. how to collect is the next big question.

Make your comment by writing over on our COMMENT column below, which is for this forum discussion

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27 comments for “GST Insurance Forum | Malaysia Insurance Forum

  1. Jaslyne Pui
    December 8, 2015 at 14:40

    if we received vehicle insurance claim for passenger car which is blocked input tax . Do we have to account for output tax on funds received from vehicle insurance claim

    • December 9, 2015 at 21:47

      I am not sure if I have understood the question. I would think the answer is no.

  2. Animal
    April 1, 2015 at 00:04

    GST is government says thank you!

  3. sin
    March 28, 2015 at 01:50

    Inter agency commission subject to gst? .if agent with gst registered sales mtr policies on behalf of a non registered agent. Does the registered agent need to issue tax invoice to that agent when receiving comm

    • March 30, 2015 at 19:32

      Assuming you are the GST registered agent; you sold the policy provided by your principal (insurer). The commission you earned is with GST, where you principal needs to give you. Assuming you pay 50% of your commission to your sub agent and he is not a GST registered agent, then you don’t have to include GST to that 50% commission. I hope this answers your question. …

  4. June
    January 20, 2015 at 16:01

    In the latest RCMD’s Insurance & Takaful GST guide (dd. 22 Oct. 2014), please pay attention to the new FAQ (in page 50) on Q 71.

    Question (Q71). Specific insurance or takaful services supplied on and after 1 April 2015 are not subject to GST (relief from tax). Does this include householder and houseowner policies?

    Answer (A71): No, it refers to a basic fire policy that provides coverage for the building only and covers loss or damage by fire, lightning and explosion.

    So does this means only basic fire policy premium is provided relief off GST?

  5. Amy Goh
    January 5, 2015 at 08:34

    Dear Sirs, I am currently paying service tax on my company insurance policies, will I be tax GST again come 1.4.15? Our company policies commence on 1.2.15. Hope you let me know your comments.

    • February 25, 2015 at 09:03

      If your company policies commence cover on 1.2.2015 then the SST continues to apply. There may be companies that request for cancellation of their policies on 31.3.2015 and then request for a reissue wef 1.4.2015 for the policies to be billed the GST – reason being, the company would be able to claim input tax credit for the GST paid, otherwise with the SST such input tax credit is not available.

  6. Yeoh KM
    December 24, 2014 at 20:27

    Dear sirs, I am a treaty broker. Can I have some materials to read in regard to GST as applicable to treaty cession, premiums, commission and brokerage? What about dealing with Labuan reinsurers and overseas reinsurers? Appreciate your thoughts. Thank you.

    • February 25, 2015 at 09:06

      You actually can google “GST for insurance and takaful” you should be able to get something….

  7. Anonymous
    December 3, 2014 at 21:06

    Dear Sirs, is the CAB working on their IT solutions to come up with system to help all reinsurers? Anything?

  8. Anonymous
    October 30, 2014 at 12:32

    Dear sir, can my agency continue to issue debit and credit note to our customers to collect and refund premium? I noticed from the numerous talks that insurers are now insisting that agents stop issuing debit note to the customers but instead use the insurer debit and credit note. This may pose problem to agents.

    • November 13, 2014 at 22:01

      Agents can continue to issue debit note but the tax invoice has got to be from the insurer.

  9. Anonymous
    September 23, 2014 at 16:18

    Can someone provide me some info on tax codes? What are these?
    The GST Tax Codes:
    1.Adjustment to Input Tax
    2.Adjustment to Output Tax
    3.Purchases (GST not claimable)
    4.Deemed Supplies
    5.Incidental exempt Supp (TX-E43)
    6.Purchases exempted from GST
    7.Exempt Supplies under GST
    8.Incidental exempt supplies (ES43)
    9.Non-inc exempt supplies (ESN43)
    10.Disregarded Purchases
    11.Disregarded Supplies under GST
    12.GST for Import of goods
    13.GST for Import of goods at 0%
    14.Import under special scheme
    15.Import under special scheme at 6%
    16.Non-inc exempt supplies (TX-N43)
    17.Non GST-registered supplier
    18.Purchases (Out-of-scope)
    19.Supplies (Out-of-scope)
    20.Taxable or exempt supplies
    21.Relief Supplies under GST
    22.Standard-rated supplies (GST 6%)
    23.Purchases with GST at 6%
    24.Purchases with no GST incurred
    25.Export zero rated supplies
    26.Zero rated supplies

    • Anonymous
      September 25, 2014 at 09:56

      Hello, where did you find those codes and most have no codes?

  10. Anonymous
    September 20, 2014 at 14:39

    What is this self billing and how this would affects the agents? hope you can give us some ideas on this.

    • Anonymous
      September 25, 2014 at 10:07

      Self billing as I know is for insurance company to help their agents (registered as GST person) to produce the GST tax invoice so they need not have to do so themselves. Usually this is for the agency commission. But problem is, if there is any amendment to the policy that the said commission is tied to it then the agent would have to issue the credit or debit note to the original tax invoice (issued under self billing) on their own; meaning agents do need to set up their accounting system to do just that. Ha, ha, self bill or not also die!

      • Kat
        September 29, 2014 at 07:58

        I think my boss agency qualifies for this GST registered person, which means her agency needs to register and also buy some software for purpose of doing billing for tax invoice. Any software to recommend especially relevant to insurance?

        • Borack
          December 3, 2014 at 21:09

          Check your accountant will do; not need ask!

      • lisa chong
        October 5, 2014 at 12:43

        The best advice for agents (those earning comm higher than RM500k or brokers is not to allow your principal to self bill your commission. Once self billed you have to issue your own credit or debit note tied to the original tax invoice if there is subsequent amendments to your commission. Best to buy your own software to deal with issuing of tax invoices. You should have a better control.

        • Lian Loh
          December 3, 2014 at 21:08

          I agree with Lisa, this self billing sometimes explain by the principal make me lagi blur. I mught as well pass this to my account handling person to issue for me.

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