The AJS is introduced under the GST Act 20XX to help jewellery
manufacturers, including toll manufacturers, overcome cash flow problem created by huge input tax payments coupled with slow or no output tax collections.
Under the GST Act, tax charged on supply of precious metals made by a
taxable person (supplier) to a jewellery manufacturer (approved jeweller) under the AJS will become the liability of the manufacturer and not the supplier. Hence, the supplier does not have to account for output tax on such supply. On the other hand the approved person is not obliged to pay the tax to the supplier but shall account for payment of GST on the supply.
When such prescribed precious metals are subsequently manufactured into
finished goods and supplied as jewellery to the local market, the approved jeweller
has to account for output tax. If such finished goods are exported, they are to be
zero-rated.
Jewellery is not defined under the GST Regulations. However, it includes
ornaments such as bracelets, necklaces, rings, bangles or earrings made of precious metals, set or mounted with gems or imitation gems that have high economic or commercial value.
Definition of “prescribed precious metals”
10. The definition of prescribed precious metals as defined under the GST
Regulations refers to:
(i) Gold which contains at least 99.5% in purity;
(ii) Silver which contains at least 99.9% in purity; and
(iii) Platinum which contains 99% in purity.
When to account for output tax
11. The time of supply for an approved jeweller is the earlier of the following:
(i) when he receives the related invoice, or
(ii) when he makes payment to the supplier
For more details about Jewellery ERP, Or GST Software, please contact Bifrost Tech Sdn Bhd at 04-6459769 / 04-6384789 or email to our support team at support@bifrostech.com or visit our website at http://www.bifrostech.com
manufacturers, including toll manufacturers, overcome cash flow problem created by huge input tax payments coupled with slow or no output tax collections.
Under the GST Act, tax charged on supply of precious metals made by a
taxable person (supplier) to a jewellery manufacturer (approved jeweller) under the AJS will become the liability of the manufacturer and not the supplier. Hence, the supplier does not have to account for output tax on such supply. On the other hand the approved person is not obliged to pay the tax to the supplier but shall account for payment of GST on the supply.
When such prescribed precious metals are subsequently manufactured into
finished goods and supplied as jewellery to the local market, the approved jeweller
has to account for output tax. If such finished goods are exported, they are to be
zero-rated.
Jewellery is not defined under the GST Regulations. However, it includes
ornaments such as bracelets, necklaces, rings, bangles or earrings made of precious metals, set or mounted with gems or imitation gems that have high economic or commercial value.
Definition of “prescribed precious metals”
10. The definition of prescribed precious metals as defined under the GST
Regulations refers to:
(i) Gold which contains at least 99.5% in purity;
(ii) Silver which contains at least 99.9% in purity; and
(iii) Platinum which contains 99% in purity.
When to account for output tax
11. The time of supply for an approved jeweller is the earlier of the following:
(i) when he receives the related invoice, or
(ii) when he makes payment to the supplier
For more details about Jewellery ERP, Or GST Software, please contact Bifrost Tech Sdn Bhd at 04-6459769 / 04-6384789 or email to our support team at support@bifrostech.com or visit our website at http://www.bifrostech.com
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