Public Ruling 2/2026 – Clarification on the meaning of the word “Used” for Sales Tax Drawback Claims

The Director General of Customs has issued the Public Ruling 2/2026 – “Meaning of the word “used” under Regulation 17(1)(g) of the Sales Tax Regulations 2018” dated 18 May 2026 (only available in the Malay language).

Outlined below are the salient points of the Public Ruling:-  

• Eligibility for drawback
  Sales Tax drawback may be allowed on taxable goods that are imported or purchased locally and subsequently exported, subject to meeting conditions specified under Regulation 17 of the Sales Tax Regulations 2018 (“STR 2018”). One of the conditions is that the taxable goods must not be used after importation or purchase.
  
  
• Meaning of “used”
  The Public Ruling 2/2026 clarifies that the term “used” in Regulation 17(1)(g) of the STR 2018 refers to taxable goods on which any activity has been carried out, including the following:
  
  - Value-added processes; or
  - Manufacturing processes.
  
  
• Activities regarded as “used”
  Any activity, value-added process, or manufacturing process carried out on taxable goods after importation or purchase is regarded as “used”, except for: 
  
  - Labelling;
  - Packaging; or
  - Re-packaging. 
  
  The excluded activities of labelling, packaging, or re-packaging must not result in the taxable goods to be given added value.

Please click on the above header link for a copy of the Public Ruling.