Court allows Petronas’ bid to quash Custom’s GST bill of demand

 

The court also made a declaration that the supply of ethylene by Petronas to Idemitsu SM (Malaysia) Sdn Bhd were exports and not supplies made in Malaysia.

KUALA LUMPUR: The High Court today allowed the judicial review application by Petronas to quash a bill of demand (BoD) issued by the customs department for alleged underpaid goods and services tax (GST) amounting to nearly RM15 million.

Judge Wan Ahmad Farid Wan Salleh in his decision made via online proceedings, held that the department had erred in raising a BoD in relation to goods that had already been exported out of the country.

Counsel S Saravana Kumar, representing Petronas, said in granting the order to quash the BoD, the court also made a declaration that the supply of ethylene by Petronas to Idemitsu SM (Malaysia) Sdn Bhd (ISM) were exports and not supplies made in Malaysia in accordance with the purpose and spirit of the GST Act 2014.

The lawyer said in December 2020, the customs department had issued the BoD, alleging that the supply of ethylene made by Petronas to ISM were “supplies made in Malaysia” and not exports.

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“This was notwithstanding that the ethylene had been delivered to overseas buyers and the movement of the ethylene were supported by export declaration (K2 Form) submitted to the department,” Saravana Kumar said.

He added that the dispute primarily hinged on the reading of Section 17(1)(b) of the GST Act which provided that any supply of goods which were exported was a zero-rated supply, and not chargeable under GST. - FMT