June 01, 2015
KLRCA CIPAA Circular 05 – Application of Goods And Services Tax
CIRCULAR BY KLRCA ON THE PROCEDURE FOR IMPLEMENTATION OF GOODS AND SERVICES TAX IN CIPAA PROCEEDINGS ADMINISTERED BY KLRCA
Pursuant to the Goods and Services Tax Act 2014, commencing 1 April 2015 a 6% Goods and Services Tax (“GST”) will become payable on the provision of all services. This will include the provision of services by the KLRCA and also by adjudicators in relation to all CIPAA proceedings administered pursuant to the CIPAA 2012, the CIPAA Regulations 2014 and the KLRCA Adjudication Rules & Procedure.
The procedure for the collection of GST will be as follows.
Upon the adjudicator issuing a direction pursuant to Rule 9(2) of the KLRCA Adjudication Rules & Procedure ordering the parties to deposit with the KLRCA the full adjudicator’s fees and expenses and the administrative fees of the KLRCA, the KLRCA will collect the full costs of the adjudication by way of security deposit.
The security deposit, including the adjudicator’s fees plus GST and the administrative fees of the KLRCA plus GST, will be collected in equal shares from the parties by the KLRCA. No fees shall be payable to the adjudicator at this stage.
Payments requested by the KLRCA in MYR can be made by cheque made out to the Kuala Lumpur Regional Centre for Arbitration or to the following account:
Kuala Lumpur Regional Centre for Arbitration
5143 5680 7190
Malayan Banking Berhad
Ground & Mezzanine Floors, Wisma Genting, Jalan Sultan Ismail, 50250 Kuala Lumpur
After the security deposit has been paid, the adjudicator shall issue tax invoices reflecting the full adjudicator’s fees and expenses as well as any GST payable. The tax invoices will be issued in the parties’ names and delivered to the KLRCA. The KLRCA will subsequently forward the tax invoice to the parties.
If the adjudicator is registered in Malaysia for the purposes of GST, GST will be payable on their fees. If the adjudicator is not registered, the party will need to account for the GST directly to the Department of Customs.
The KLRCA, after the security deposit has been paid, shall issue tax invoices reflecting the administrative fees of the KLRCA as well as the GST payable. The tax invoices will be issued in the parties’ names and delivered to the parties.
The security deposits already paid by the parties will be entirely set off against the costs of the adjudication in satisfaction of the tax invoices issued by the adjudicator and the KLRCA.
Any additional or supplementary deposits that may become payable over the course of proceedings will be collected in the same way. Tax invoices will be issued in the parties’ names by the relevant service provider (being the adjudicator or the KLRCA), including GST, with the deposit thereafter collected by the KLRCA. If the service provider is not registered for GST, GST will not be included.
Should proceedings be completed prior to the delivery of the final decision, the adjudicator may direct reasonable costs to be paid, including reasonable fees and expenses of the adjudicator. The adjudicator shall issue tax invoices reflecting those reasonable fees and expenses. In the event there is any difference between those reasonable costs and any tax invoice previously issued then a corresponding credit note will need to be issued by the adjudicator.
Any unexpended balance will then be refunded to the parties.
This Circular 05* will take effect on 1 June 2015.
Dated this 1 June 2015.
Datuk Professor Sundra Rajoo
Director of KLRCA
*As revised on 1 June 2015.