SST 6% or 8%: which service tax rate applies, and how to record it

The current service tax rates

SST is administered by the Royal Malaysian Customs Department (JKDM) through its MySST portal, not by LHDN. According to MySST, the service tax rate was 6% from 1 September 2018 to 29 February 2024, and has been 8% since 1 March 2024, except for four groups of services that stay at 6%.

Services added from 1 July 2025

The scope of service tax was expanded from 1 July 2025. MySST lists the new categories and rates as:

Each new category comes with its own thresholds and exemptions, and some have changed since they were first announced, so check the MySST guide for that category before relying on a rate. Rates above are as listed on MySST when this guide was published.

Sales tax is a different tax

SST is really two taxes. Sales tax is charged by registered manufacturers and importers on taxable goods, generally at 10% with some goods at 5% and many essentials exempt (PwC Malaysia). Service tax is charged by registered providers of taxable services. A receipt can show either, so work out which one it is before deciding the rate looks wrong.

How to record SST on a purchase receipt

For most businesses, SST paid on a purchase can't be claimed back. PwC's summary of Malaysian service tax puts it plainly: service tax is a final tax with no credit mechanism, so any service tax a business incurs is a final cost. That's the main difference from the GST system Malaysia used before SST returned in September 2018.

That leaves two ways to book it, and the choice is about reporting, not about recovering tax:

• Tax-inclusive: book the full amount, SST included, to the expense account. It's the simplest option, and fine when nobody needs to see the SST on its own.
• Tax-exclusive: book the net amount to the expense and the SST to a separate account. It's useful when a client wants to see how much SST it's paying across its suppliers.

Whichever you choose, apply it consistently for each client. Switching between the two mid-year makes expense accounts hard to compare.

Worked example: a RM200 service charged at 8%

The amount paid is the same either way. Only where the RM16 sits in the books changes.

Is the rate on this receipt wrong?

Because the rate depends on the type of service, a receipt showing 6% isn't necessarily wrong, and neither is one showing 8%. A restaurant bill at 6% is expected. A professional service billed at 6% after March 2024 is worth a second look, although services provided around the date of the change can follow transitional rules. And a supplier that isn't SST-registered shouldn't be charging service tax at all.

Registered businesses have their own side of this to manage: MySST requires them to file the SST-02 return every two months, by the last day of the month after each taxable period, even when there's no tax to pay (MySST service tax FAQ).

Where Krani fits

Reading SST off hundreds of receipts by hand is slow and easy to get wrong. Krani reads the SST charged on each receipt, at 6% or 8%, separates it from the net amount, and books it tax-inclusive or tax-exclusive according to how you've set up each client. Anything it isn't confident about is flagged for review before it's posted. See the receipt OCR page for how each receipt is read.

This guide summarises published rates for bookkeeping purposes and isn't tax advice. Confirm the treatment for a specific client against the MySST guides or with a tax adviser.