KUALA LUMPUR: The proposed Sarawak Sales Tax Ordinance imposition on Petroliam Nasional Bhd (Petronas) is not permitted by law as the transactions are not sales in the sense required by the constitution, a lawyer submitted yesterday. Counsel Datuk Malik Imtiaz Sarwar told the High Court in Kuching that the sales tax has to be understood as sale of goods as distinct from excise, import or export duties. Submitting on the first day of hearing the judicial review filed by Petronas against the state sales tax (SST) imposition, Malik said: “On this basis, Petronas argues that the SST Ordinance sought to impose tax on transactions that are not sales in the sense required by the Federal Constitution.”“The ordinance also has [an] extra-territorial effect not permitted by law. Malik said Petronas recognises that Sarawak can validly impose the SST under the Federal Constitution. Even if the legislation and order are valid, Petronas is not a taxable person, as it is involved in selling petroleum products in Sarawak, he said.

Source: The Edge Markets February 04, 2020 01:52 UTC