A new gazette order has widened the list of goods exempted from sales tax under the Sales Tax Act 2018. The Sales Tax (Persons Exempted From Payment Of Tax) (Amendment) (No. 2) Order 2026 takes effect on 1 September 2026.

The order adds three new categories of exemption to the existing Sales Tax (Persons Exempted From Payment Of Tax) Order 2018. Manufacturers approved by the Director General can now claim sales tax exemption on goods used solely to produce animal feed products, fertilizer products, or pesticide products.

To qualify, the manufacturer needs a manufacturing licence under the Industrial Co-ordination Act 1975. If the manufacturer is not required to hold that licence in the first place, a letter from MIDA confirming this is accepted instead. The goods must also be imported, purchased from a registered manufacturer, or brought in from a licensed warehouse, licensed manufacturing warehouse, or free zone. To claim the exemption, the manufacturer signs its own certificate confirming the goods qualify.

Schedule B of the 2018 order already had four items before this amendment. They cover manufacturers approved by the Director General who produce goods excluding petroleum for four specific purposes: controlled articles subject to price control, pharmaceutical products, milk products under listed tariff codes, and raw materials or components used to manufacture exempted goods for export. Those four items are unchanged. What is new is that animal feed, fertilizer and pesticide manufacturing did not previously have their own category under Schedule B. This order adds them as items 5, 6 and 7. The overall setup is similar to the earlier items, but instead of being defined by what the goods are eventually used for, like price control, pharmaceuticals, milk, or export, the new items focus mainly on where the goods come from, such as being imported or bought from a registered manufacturer.

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