22 April 2015

Pejabat Jabatan Kastam Diraja Malaysia, Bahagian GST, Wisma Tulus, Persiaran Perdana Presint 3,

62592 WP Putrajaya.

Attn. to: Mr. Chan / Tuan Sabri,

Dear Mr. Chan / Tuan Sabri,

GST IMPLICATION ON DROP SHIPMENT WITH INCOTERM DAP

With reference to the above, we have a few shipments sold to our clients in Malaysia with the

Incoterm DAP. Based on my meeting with Tuan Sabri and Puan Rofiza on Monday, as per

their advice certain shipments under the Incoterm DAP that are delivered to FCZ area are

classified as Relieve Supply (RS) with zero rates.

However we would like to seek your clarification on the DAP Shipments that are not delivered

into FCZ Area. These shipments are consigned to our Local Buyer who will be paying the 6%

GST at the time of declaration. As such can we be exempted from charging GST as the 6%

GST has already been paid by the consignee, in this case our client?

Secondly, in the following scenario:-

1. Since the goods are consigned to MMHE who will be paying the 6% GST, can all the

other companies (PBJV, Persada & Primage) use the Tax Code OP?

2. The import declaration will be in the name of the LB however the value of the imported

goods must be based on which Local Invoice (LC1 or LC2 or LC3)?

Cortem

MMHE

PBJVPersada

Primage

PRIMAGE ENGINEERING SDN BHD

(Company No: 964075-D)

GST No: 001373061120

Suite A-9-03, 9th Floor, Capital 1, Oasis Square, 2, Jalan PJU 1A/7A, Oasis Damansara, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia. Tel: +603 7832 6055 / 7055 Fax: +603 7832 5055

Supply of Material from Italy to Malaysia incoterm

DAP Kuala Lumpur

1. MMHE (LB) – Ultimate Buyer issues PO to PBJV

2. PBJV (LC1) – issues the PO to Persada

3. Persada (LC2) – issues the PO to Primage

4. Primage (LC3) – issues the PO to Cortem

5. Cortem (OS) is the manufacturer located in Italy

Cortem delivers the goods directly to MMHE.

Goods are consigned to MMHE

Notify Party is PBJV

All POs’ are with the term DAP KL