Malaysia’s Sales and Service Tax — universally known as SST — replaced the Goods and Services Tax (GST) on 1 September 2018 and remains the country’s primary consumption tax framework today. For any business that manufactures goods, imports taxable items, or provides taxable services in Malaysia, SST is a compliance reality. This guide explains what SST is, who must register, what rates apply (including the 2024 increases), and how to manage SST obligations from pricing through to filing.

What is SST?

SST — Sales and Service Tax — is Malaysia’s two-part consumption tax system administered by the Royal Malaysian Customs Department (RMCD). It has two distinct components: Sales Tax, which applies to taxable manufactured and imported goods, and Service Tax, which applies to taxable services provided in Malaysia. SST replaced GST on 1 September 2018. Businesses register, file, and pay SST through the government’s MySST portal at mysst.customs.gov.my.

SST is not a unified tax in the way GST was. The two components operate under separate legislation, have different scopes, and can apply independently of each other — a business may be registered for one component but not the other, depending on what it sells. Understanding which component applies to your business is the first step in getting SST right.

The authority for SST is the Royal Malaysian Customs Department (RMCD). All registration, filing, payment, and official guidance sits with RMCD. Their portal — MySST at mysst.customs.gov.my — is where businesses manage their entire SST lifecycle, including registration, return submission, and payment.

Sales tax vs service tax — what’s the difference?

SST contains two taxes that are easy to conflate. They apply to different things, at different rates, under different legislation.

Sales Tax is charged on taxable goods — specifically goods that are manufactured in Malaysia by a licensed manufacturer, or imported into Malaysia. It is a single-stage tax levied at the manufacturer or importer level, not collected at every step of the supply chain. Once sales tax has been paid at that first stage, it is not charged again when the goods move downstream through distributors and retailers (though end prices may still reflect the embedded cost).

Service Tax is charged on taxable services provided in Malaysia by a registered service provider. It applies to a wide range of sectors including restaurants, hotels, professional services, accounting, legal, and many others. Unlike sales tax, it is typically charged directly to the final consumer at the point of service — you see it on a restaurant bill or a professional services invoice.

The key practical difference for most Malaysian SMEs: if you manufacture or import physical goods, you are dealing with Sales Tax. If you provide services — from consulting to food and beverage to logistics — you are dealing with Service Tax. Some businesses attract both.

SST rates and the latest changes (2024–2026)

Sales tax rates

Sales tax in Malaysia is not a single flat rate. The applicable rate depends on the category of goods.

For the definitive list of which goods fall into each category, refer to the RMCD’s official Sales Tax (Goods Exempted from Sales Tax) Order and the Sales Tax (Rates of Tax) Order, available on the RMCD website.

Service tax rates — and the 2024 increase

Service tax underwent a significant change on 1 March 2024, when the standard rate was raised from 6% to 8% for a defined list of services. Not all services were increased — the rate applicable to your business depends on which category you fall under.

Practical illustration: A restaurant bill of RM100 would attract RM6 in service tax (6%), bringing the total to RM106. A logistics company charging RM100 for a taxable logistics service would add RM8 (8%), for a total of RM108.

The RMCD has published detailed guidance on which services moved to 8%. If you are uncertain about your rate, the definitive reference is RMCD’s SST portal and the relevant subsidiary legislation.

What has not changed

The RM500,000 registration threshold for both sales tax and service tax remained unchanged through the 2024 amendments. Businesses below the threshold are not required to register, though voluntary registration is available.

SST registration — who must register, thresholds, how to register

Who must register

Registration for SST is mandatory once a business crosses the annual taxable turnover threshold:

• Sales tax: RM500,000 in annual sales of taxable manufactured goods

• Service tax: RM500,000 in annual taxable services provided

The threshold applies to the preceding 12 months or to a projected future period if you expect to exceed it. Once you cross the threshold, registration is compulsory — operating above the threshold without registering exposes the business to RMCD enforcement.

Certain categories of service providers are subject to mandatory registration regardless of turnover — for example, operators of credit card, charge card, or other financial instruments, where the requirement is set by licence condition rather than turnover.

Who does not need to register

Businesses with annual taxable turnover below RM500,000 are generally exempt from mandatory SST registration. Businesses that deal only in exempt goods or non-taxable services also fall outside the scope. Exporters of goods are generally zero-rated for sales tax purposes.

How to register — MySST

Registration is done through the MySST portal at mysst.customs.gov.my, operated by RMCD. The process:

Step 1: Access MySST at mysst.customs.gov.my and select “Registration.”

Step 2: Complete the SST registration form online. You will need your business registration number (SSM), MyKad or passport number for directors/owners, business activity description, and projected taxable turnover.

Step 3: Submit supporting documents as required — typically your business registration certificate and supporting financial information.

Step 4: RMCD reviews your application. Upon approval, you receive your SST registration number, which must appear on all tax invoices you issue.

Step 5: Register for MySST login credentials to file returns and manage your account going forward.

Most registrations are processed within a few working days to a few weeks, depending on the complexity of the business.

Your SST registration number and how to verify one

Once registered, RMCD issues you an SST registration number. This number must be printed on every tax invoice you issue. It is also how your business customers verify your SST status.

To check or verify an SST registration number — whether your own or a supplier’s — use the SST registration search function available on the MySST portal. Enter the registration number or business name and the portal returns the registration status. This is useful for verifying suppliers and for due diligence before claiming input credits on purchases (where applicable under the Sales Tax framework).

SST vs GST — what changed?

Malaysia operated a Goods and Services Tax (GST) framework from April 2015 to August 2018. GST was a multi-stage, value-added tax at a flat 6% on most goods and services, with input tax credits available throughout the supply chain. It was replaced by SST on 1 September 2018, following a change of government.

In practice, the shift from GST to SST reduced the administrative burden on many small businesses, as they no longer needed to track input tax claims across every purchase. However, SST’s narrower scope means the government collects less revenue, and some categories of business that were previously zero-rated or exempt under GST found themselves liable under the SST service tax net.

For most Malaysian SMEs that provide taxable services, SST is simpler than GST was — but the 2024 rate increase to 8% for certain service categories has increased the tax cost for businesses in logistics, financial services, and related sectors.

How SST affects your pricing and invoicing

SST is a tax you collect on behalf of the government, not a tax on your own profit — but it directly affects how you price, invoice, and account for your revenue.

Setting SST-inclusive prices

The most common approach for retail businesses and restaurants is to quote and display SST-inclusive prices — the price the customer sees already includes the service tax component. This is familiar to consumers, requires no additional calculation at the point of sale, and avoids end-of-transaction surprises.

Example (6% service tax):

• Food bill before tax: RM100.00

• Service tax at 6%: RM6.00

• Total charged to customer: RM106.00

Example (8% service tax):

• Logistics service before tax: RM500.00

• Service tax at 8%: RM40.00

• Total charged to customer: RM540.00

An alternative approach — common in professional services and B2B contexts — is to quote prices exclusive of SST and add the tax as a separate line item on the invoice. Both are legally acceptable, but the invoice must be unambiguous about the tax amount and your SST registration number.

Tax invoice requirements

Once you are SST-registered, you must issue a tax invoice for every taxable supply you make. A valid SST tax invoice must include:

• Your business name and address

• Your SST registration number

• Invoice number and date

• Customer name and address

• Description of goods or services supplied

• Quantity and unit price

• Total amount excluding SST

• SST amount (clearly labelled with the applicable rate)

• Total amount including SST

Failing to issue compliant tax invoices is an RMCD enforcement risk. Keep copies of all tax invoices for a minimum of seven years.

Filing and payment

SST is filed bimonthly — every two months — via the MySST portal. The filing covers all taxable supplies made and SST collected during that two-month taxable period. Payment is due by the last day of the month following the end of the taxable period.

Businesses must file even for taxable periods with zero liability (a nil return). Late filing and late payment attract penalties under the Sales Tax Act 2018 and Service Tax Act 2018.

How HitPay invoicing helps Malaysian businesses

Managing SST compliance requires more than knowing the rates — it requires clean records of every taxable transaction, correctly formatted invoices, and reliable tracking of what has been billed and collected. This is where your billing and payment infrastructure matters.

HitPay Invoicing is built for Malaysian businesses that want a professional, compliant invoicing workflow without a separate accounting system. From the HitPay dashboard, you can:

• Set SST-inclusive or exclusive pricing on each line item, with a dedicated tax line that displays the SST amount and rate separately on the invoice

• Generate professional tax invoices that include your business details and a clear SST breakdown — formatted for RMCD compliance

• Add your SST registration number to all invoices as a fixed field, so it appears consistently without manual entry on each invoice

• Collect payment directly from the invoice — every HitPay invoice includes an embedded payment link. Your customer clicks to pay by FPX, DuitNow, GrabPay, Touch ‘n Go eWallet, card, or other local methods — no separate payment step required

• Track outstanding invoices against payments received, so you always know what has been collected and what is still outstanding before your bimonthly SST filing

• Sync automatically to Xero or QuickBooks — if you use accounting software for SST reconciliation, HitPay’s integrations export transaction records automatically

For service businesses — consultants, agencies, logistics providers, professional services firms, F&B operators — the ability to collect payment at invoice means SST-taxed revenue is received faster, and the record of what was charged and when is automatically maintained.

No monthly subscription fee. You pay only the standard transaction rate when a payment is made. See HitPay Malaysia pricing →

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