(a) Minangkabau Sdn Bhd (MSB), which constructs residential apartments, is registered for sales and services tax (SST) and closes its accounts on 31 December annually. Fancy, Ah San and Meena are all employees of MSB. (b)Details of gifts awarded to each of them during the company’s annual dinner held on 31 December 2019 are as follows: 

(i) Fancy was given a laptop as a prize for being the most innovative employee of the year. MSB had bought the laptop on 23 August 2019 for RM3,300 inclusive of SST. 

(ii) Ah San was given a ring worth RM5,500 as a 15-year long service award in accordance with the terms of his contract of employment and MSB’s employees’ hand book. 

(iii) Meena was given a gold watch worth RM25,000 for achieving the highest annual sales in MSB’s history. MSB has a policy of only making awards to employees during the company’s annual dinner. Required: (a) State, with reasons, whether salaries paid to employees are within the scope of sales and services tax (SST).

(b) In respect of each of the gifts awarded to the three employees during Minangkabau Sdn Bhd’s annual dinner, briefly explain whether SST output tax would apply and, if so, compute the SST output tax applicable.

(c) Jiwa Sdn Bhd (JSB) disposed of a passenger vehicle on 24 January 2019 for RM20,000. The passenger vehicle, which had been used by the group finance manager, had been bought by JSB on 21 August 2016 for RM100,000. Required: Compute the sales and services tax (SST) output tax on the disposal of the passenger vehicle by Jiwa Sdn Bhd.

Answer rating: 100% (QA)

1 Yes the salary paid to employees are with in the scope of sales and services tax SST be... View the full answer