DUTY TAX EXEMPTION

MIDA requires manufacturers to present their manufacturing license to obtain an exemption for import duty tax on raw materials and components used in the production of finished products. The company must do the export market than only entitle for the duty tax exemption. There are few duty tax exemption under MIDA and the the normal duty tax exemption applied is PC1 and PC2.
PC1 is duty tax exemption for machinery, and equipment. This need to apply via MIDA online application and will process with MIDA and Custom.

The conditions of applying the PC1 are:

a) Machinery and equipment which are not produced locally and imported directly by a company engaged in selected activities in agriculture sector can be considered for import duty and/or sales tax exemption.
b) Machinery and equipment which are purchased from local manufacturers can also be considered for sales tax exemption.
c) Application must be submitted prior to the importation or purchase of the machinery and equipment.

d) Only application with total duty and/or tax exemption value of RM5,000 and above (per submission) will be considered for exemption.


The document needed are:

 

19. Valid Business License from Local Authority (Majlis Perbandaran)

20. SSM Company Profile

21. Latest Audited Report / Management Account

22. Company Profile

23. List of existing Machinery and Function

24. List of Raw Material, Quantity and Name of Supplier

25. List of Product, Quantity and Name of Customer

26. List of Manpower Divide into Management, Technical, Clerical, Admin and Factory Worker

27. Factory Layout Plan

28. List of Imported Machine, Tariff Code, Country of Origin and CIF value PC2 is duty tax exemption for raw material and consumable items. This need to apply via MIDA online application and will process with MIDA and Custom.

The conditions of PC2 are:

 

a) Companies engaged in manufacturing activities can be considered for import duty exemption on raw materials and components which are used directly in the production of finished products and are imported directly.

b) MIDA only accept application for import duty exemption for iron and steel raw materials / components under HS Code 72 to 7316 to be used to produce finished products for domestic market. Meanwhile, for export and Free Zone / Licensed Manufacturing Warehouse (FZ/LMW) market, company can claim import duty exemption from Customs through duty drawback facility. Whereas, application for sales tax exemption for export market has to be submitted to MIDA.

c) Only application with total duty and/or tax exemption value of RM5,000 and above (per submission) will be considered for exemption.

d) Application must be submitted prior to the importation or purchase of the raw materials and components

e) Companies in the following selected industries which manufacture finished products not subjected to sales tax can also apply for sales tax exemption on imported or locally sourced raw materials and components:

 

i. Aerospace / aircraft industry

ii. Machinery & equipment industry

iii. Petroleum products used as raw materials for industries other than oil refinery

iv. Motorcycle assembly industry

The document needed are:

1. Valid Business License from Local Authority (Majlis Perbandaran)

2. SSM Company Profile

3. Latest Audited Report / Management Account

4. Company Profile

5. List of Machinery and Function

6. List of Existing Raw Material, Quantity and Name of Supplier

7. List of Product, Quantity and Name of Customer

8. List of Manpower Divide into Management, Technical, Clerical, Admin and Factory Worker

9. Factory Layout Plan

10. List of Imported Raw Material, Tariff Code, Country of Origin and CIF value