TEAM met the Head of SST of Treasury, together with Deputy Directors of the Internal Tax Department of the Customs Department, on 12 September 2025 at Treasury’s office. The main objective of this session was to brief the ministry about the intricacies of our industry and justify the necessity of exempting products under HS codes 4403 (logs) and 4407 (sawn timber).
The Ministry of Finance (MoF) mentioned that implementation was recommended by CIDB and disagreed with the exemption request; however, encouraged TEAM to send a formal appeal of exemption to MoF.
Some key points from the engagement are:
a. MoF concurred that the allowable period of 6 months under the 57A could be too short for the industry. The Customs Department was advised to review the said period.
b. The Customs Department acknowledged the overly transparent disclosure of sensitive information in form C3, which is detrimental to traders. The Department shall review this matter to explore a better way of handling the sensitive information.
c. According to customs, clauses 2a and 11 under the “Sales Tax (Exemption from and Registration) (Amendment) Order 2022″ remain valid. In lieu of this, companies which are ‘manufacturing’ are recommended to study this order and the said clauses to determine their status of registration.
d. The Customs Department advised sawmills that carry out sawing activity only (single activity) to approach their nearest Customs office to obtain a confirmation note. Mills that can obtain this confirmation note are not required to register as a Registered Manufacturer (RM) and do not need to charge SST to their customers. However, they lose the benefits of being a Registered Manufacturer.
TEAM will be sending another request for exemption of the products under HS code 4407 promptly.