Malaysia Service Charge vs GST

What is the different within Service Charge and Government Service Tax (GST)?

Service Charge is the charges imposed by the business, normally applied un the hospitality industry at the rate of 10%. It’s like tipping.

Government Service Tax (GST) is a legislated tax at rate 6% (effective from January 2011) imposed under the Service Tax Act 1975. This is imposed by businesses in the hospitality industry like Hotels, restaurants, pubs and spas. The Service Tax license with the name, address and the license number is to be displayed in the licensed permises. The collected service tax to be paid to government once every two months.

The nature of businesses and type of services subject to licensing and payment of service tax can refer to Second Schedule of Service Tax Regulations 1975.

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