SST - Guide On Courier Services

“Courier service” is defined as postal services provided in an expedited manner with track and trace services. 

“Postal services” means the collection, transmission and delivery of any postal article. 

“Designated area” (DA) means Labuan, Langkawi and Tioman.

“Special area” (SA) means any free zone, licenced warehouse and licenced manufacturing warehouse and Joint Development Area.

Malaysian Communication and Multimedia Commission (MCMC) is responsible to overseeing and regulating the postal and courier services in Malaysia.

Referred to List of Courier Service Licence, MCMC, a universal service licence is granted only to Pos Malaysia Berhad while a non-universal service licence is divided into 3 categories which are: 
(i) Licence A – to provide to international inbound and outbound courier service and domestic courier service in Malaysia; 
(ii) Licence B - to provide to international inbound courier service and domestic courier service in Malaysia; or 
(iii) Licence C - to provide for intra-state domestic courier service in Malaysia.

Service Tax Treatment for Courier Services

Courier services are subject to 6% service tax if: 
(i) The service provider licenced under Postal Services Act 2012 (PSA 2012); 
(ii) It is a domestic courier service; and 
(iii) The service provider registered under Service Tax Act 2018 (STA 2018).

Postal services by Pos Malaysia Berhad by way of sending letters that require postage stamp is not subject to service tax.

Agent for a courier company is not required to be SST registered provided that the agent is not licensed under PSA 2012.

Prescribed services for courier services which is subject to service tax 6%: 
(i) Provision of courier delivery services for documents and parcels not exceeding 30 kilograms each: 
(a) Between a place in Malaysia to another place in Malaysia; 
(b) Between a place in Malaysia to a place in DA, vice versa; 
(c) Between a place in Malaysia to a place in SA, vice versa; or 
(d) Between a place in DA to a place in SA, vice versa if the courier company principal place of business is in Malaysia.

Courier delivery services include parcel, prepaid box and prepaid envelope and other related services is subject to service tax.

Registered person who provides courier delivery services for documents and parcels exceeding 30 kilograms each do not have to charge service tax. This service is considered as transportation of cargo.

Registered person does not have to charge service tax for courier services for delivery of documents or parcels: 
(i) From a place outside Malaysia to a place outside Malaysia; 
(ii) From a place within Malaysia to a place outside Malaysia; 
(iii) From a place outside Malaysia to a place within Malaysia; or 
(iv) Provision of courier delivery services within Malaysia that form part of the service referred to in subparagraphs (i) and (ii) where the service is provided by the same person.

Courier services provided by a service provider who is not licensed under PSA 2012 is not subject to SST registration.

The courier services within the DA and within the SA are not subject to service tax if the service provider’s principal place of business is in DA.

Responsibilities of a Registered Person

A registered person is responsible to: 
(i) Charge service tax on taxable services; 
(ii) Issue invoices and receipts with specific particulars; 
(iii) Submit service tax return SST-02 electronically and pay service tax before the due date; and 
(iv) Keep proper records.

Frequently Asked Questions (FAQs)

Q : Post office offers insurance coverage for normal parcel delivery. Is this insurance subject to service tax? 

A : No, it is not subject to service tax.

Q : Are fees/charges for local courier services such as Pos Laju and Pos Express subject to service tax? 

A : These fees/charges are subject to service tax at 6% if the services are performed within Malaysia but if the service is within the DA, no tax chargeable.

Q : Are fees/charges for registered mail subject to service tax? 

A : No, it is not subject to service tax as it is not a courier service.

Q : A registered courier company in Perak has a branch in Langkawi (DA) and providing courier services within Langkawi. Is the service charged subject to service tax? 

A : No, the branch in Langkawi (DA) which provide courier service within Langkawi is not subject to service tax provided that: 
(i) The services are performed directly in connection with the goods; 
(ii) The services are performed in DA and benefit the person in DA; and 
(iii) The invoice is issued by the branch in DA.

Q : A registered courier company in Kuala Lumpur without any branch in Langkawi, providing courier services within Langkawi. Is the service subject to service tax? 

A : Yes, courier service within Langkawi (DA) is subject to service tax because the principal of business is in Kuala Lumpur.

Q : Courier service provider who holds licence A or B under PSA 2012, the company makes partly international services and domestic services. How to calculate the threshold? 

A : The courier service provider needs to calculate the threshold based on the total sales on domestic services only and exclude the international services.

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Edited by: 浪子

Bibliography

Royal Malaysian Customs Department. (2018). Guide On Courier Services. Retrieved from 
https://mysst.customs.gov.my/assets/document/Rev%204%201.%20Guide%20on%20Courier%20Services_21082018%20rev2.pdf