This Frequently Asked Questions (FAQ) serves to provide basic information on the

implementation of Malaysias Goods and Services Tax (GST) and its impact to Hong
Leong Assurance Berhad (HLA) customers. This FAQ is subject to change and HLA will
update it as and when required based on the updates provided by Royal Malaysian
Customs Department (RMCD).
Policyholders
1. What is GST?
Goods and Services Tax (GST) is a multi-stage tax on domestic consumption. It is also
known as value added tax in other countries. GST is charged on all taxable supplies of
goods and services in Malaysia except those specifically exempted.

2. Is GST a new consumption tax?

Yes, it is a consumption tax to replace the current Sales Tax and Service Tax (SST).

3. What is the rate of GST that will be imposed?

The rate of tax is fixed at 6% on the supply of goods and services or on the importation of
goods as gazetted in the Goods and Services (Rate of Tax) Order 2014. However, the
Minister may, by order published in the Gazette vary or amend the rate of tax fixed under
section 10(2)(a) of Goods and Services Tax Act 2014 (GST Act 25014).

4. When is the effective date of GST?

GST will be charged on supplies of goods and services made on or after 1 April 2015.

5. Who can charge and collect GST?

A person who is registered under the GST Act 2014, known as GST Registered Person
can charge and collect GST on his taxable supply of goods and services made to his
customers in the course or furtherance of business.

6. How do I know whether a person is a legitimate entity to charge GST?

A GST Registered Person needs to issue valid tax invoices to charge GST on the taxable
supply of goods and services. The GST registration number will be printed on the tax
invoices and consumers can verify the GST registration status of the person via GST Portal
of RMCD.

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7. Does HLA charge GST?

HLA has registered on 23 June 2014 as GST registered person and therefore will charge
GST on supplies of goods and services made on or after 1 April 2015.

8. What are the taxable supplies of HLA and how does GST affect insurance policy
premiums?
In general, life insurance policies are exempt supplies and therefore premiums paid are not
subject to GST. However, non-life policies/riders premiums and other fees/charges for
services provided by HLA are taxable supplies and therefore will attract GST.

9. Will there be any different in amount payable if a consumer is to purchase a nonlife insurance policy or a life insurance policy with non-life riders through an agent
who is not a GST Registered Person?
No. Insurance policies are supplied by the insurer and not its agents. Although the agents
are not GST Registered Persons, the insurer, like HLA is a GST Registered Person.
Therefore, GST is chargeable regardless the GST registration status of its agents.

10. Is GST chargeable for insurance policies that are purchased before 1 April 2015?
For policies that were purchased before 1 April 2015 where the premium is paid for the
insurance coverage period that spans 1 April 2015, GST will be chargeable for the period
of insurance cover provided on or after 1 April 2015 onwards.

11. How will GST be charged on policy (insurance premium) that spans 1 April 2015?
Based on the illustration shown below, GST of RM8.02 will be charged for the period of
coverage from 1 April 2015 onwards.

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Exception:
GST spanning is not applicable if the insurance premium has already been charged
Service Tax.

12. Businesses in Free Trade Zones are exempted from Service Tax. Will the same
exemption apply under the GST regime?
No. The non-life insurance portion supplied by an insurer located in the Principal Customs
Area covering risks located in Designated Area (Labuan, Langkawi and Tioman) is
standard rated.

13. Will there be an increase in insurance premium because of GST?

No, insurance premium remains the same but total amount payable will increase to include
GST charged on insurance premium for non-life plan/rider.

14. What is a tax invoice?

It is an official billing document issued by the GST Registered Person that contains certain
information such as details of registered person, details of supply, GST rate, GST payable
amount, and amount payable after GST.

15. Who will issue a tax invoice for purchase of insurance?

Insurance policies are supplied by the insurer and therefore, HLA will issue a tax invoice to
policy owner for purchase of insurance policies, not its intermediaries.

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16. Do I need a tax invoice? When will I need a tax invoice?

No, you dont need a tax invoice if you are not a GST registered person. When you are a
GST registered person you need a tax invoice in order for you to claim input tax credit.

17. Can I claim GST on insurance premium paid (i.e. Input Tax Credit)?
A person is entitled to claim input tax credit on insurance premium paid if:
a) he is a GST Registered Person;
b) he is making a taxable supply;
c) the insurance policy is acquired in the course or furtherance of business; and
d) the insurance policy acquired is input tax allowable.

18. Where can I get more information about GST?

General information and educational materials regarding GST is available at GST Portal at
http://gst.customs.gov.my/en/Pages/default.aspx

19. Will a foreigner resident in Malaysia (e.g. Singaporean, Brunei, Overseas) who
buy non-life products subject to GST?
Yes. The said non-life products will subject to GST.
20. What is the impact to a consumer who pays premium through auto deduction
facilities e.g. Auto Debit and CCSI?
a) Auto debit standing instruction made by the consumer with bank directly
- The consumer himself needs to advise the Bank to increase the auto debit limit to
include GST on insurance premium for non-life plan/rider.
b) Auto debit standing instruction initiated by HLA via MyClear (MEPS) and Maybank
- HLA to instruct consumers Bank to increase the auto debit limit to include GST on
insurance premium for non-life plan/rider.
c) Credit card standing instruction with HLA
-

The billing amount by HLA will include GST on insurance premium for non-life
plan/rider.

21. Do I need to inform HLA if I am granted a relief from paying GST?

Yes. HLA is a GST Registered Person and will charge GST on all taxable supplies made to
you unless we know you are granted a relief from paying GST.

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22. Who should I liaise with for queries in relation to GST on HLA insurance
products?
Do contact our Customer Service Hotline at 03-7650 1288 during office hour or email to
customerservice@hla.hongleong.com.my for any queries in relation to GST on HLA
insurance products.

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