SST for wholesaler: when to charge SST

SST treatment depends on what you sell and your role in the supply chain: manufacturing, importing or reselling taxable goods.

Does a wholesaler need to charge SST?

Sales tax is generally imposed on taxable goods manufactured in Malaysia or imported into Malaysia. If you purchase goods locally from a manufacturer or distributor and resell them without manufacturing or importing them, you generally do not charge sales tax again simply because you are a wholesaler.

However, if your wholesale business also manufactures or imports taxable goods, different sales tax obligations may apply.

What if you import the goods?

If you import taxable goods into Malaysia, sales tax may be payable at the point of importation. This is different from buying the same goods from a local supplier. Your role as the importer can affect your SST obligations, even if you ultimately sell the goods to another business.

What if you manufacture or process the goods?

If your wholesale business also manufactures taxable goods, you may need to register for sales tax once the value of your taxable goods reaches the applicable registration threshold. For most taxable manufactured goods, the registration threshold is RM500,000 over a 12-month period, subject to the applicable rules and exemptions. This can matter for wholesalers that also repack, process or manufacture products rather than simply reselling them.

What SST rate applies to wholesale goods?

There is no single SST rate for all wholesale products. Depending on the goods and their classification, sales tax may apply at 5%, 10% or a specific rate. Some goods are exempt from sales tax altogether.

Important note: These are general references, not a substitute for checking the product classification. Under the current SST framework, goods not listed under the 5% or specific-rate provisions are generally subject to 10%, while exempt goods are covered separately under the relevant exemption order. You should your product's tariff code against the latest MySST orders before applying SST.

What should you show on your invoice?

If your business is registered for sales tax and the goods are taxable, your invoice should clearly show the applicable sales tax. For a wholesale business selling hundreds of products, this means your product records need to distinguish between taxable and non-taxable items and apply the correct rate.

This is where inventory and accounting records become important. Your product data should carry the relevant tax information so that the correct treatment flows into your invoices.

SST and e-Invoice are separate

If your wholesale business is subject to both SST and e-Invoice, the two requirements should not be treated as the same thing. SST determines the tax treatment of your goods. E-invoice is the transaction document submitted to LHDN for validation. Your invoice therefore needs to carry the relevant SST information while also meeting the e-invoice requirements.

Before applying SST to your wholesale invoices:

You should check:

• Are you manufacturing, importing or simply reselling the goods?

• Are the goods taxable or exempt?

• Which sales tax rate applies to the goods?

• Are you registered or required to register for sales tax?

These determine whether and how SST should appear on your wholesale invoices.