SST Bill of Demand in Malaysia: How to Challenge or Appeal It

What is an SST bill of demand, and why does the date matter?

A bill of demand is Customs' formal written demand for sales tax or service tax, often with penalties, that it says you underpaid or failed to pay. It usually follows an SST audit or a finding that goods or services you treated as exempt were taxable.

The governing laws are the Sales Tax Act 2018 (Act 806) and the Service Tax Act 2018 (Act 807). Customs can generally assess and demand tax within six years, but can do so at any time where there has been fraud or wilful default. Customs duty demands on imports and exports are made under the Customs Act 1967 (Act 235) and follow a similar route to the Customs Appeal Tribunal.

The most important fact on the bill is the date you were notified. Both the review and the appeal deadlines are 30 days, and they run whether or not you are still talking to the Customs officer who raised the bill.

Since SST was widened on 1 July 2025 to more goods and to services such as rental, construction and financial services, typical issues include:

• whether a service falls within a taxable category;
• the value on which tax is charged;
• whether an exemption or threshold applied;
• late payment penalties.

How does a review by the Director General work?

A review is an internal reconsideration by the Director General of Customs. Under section 96 of the Sales Tax Act 2018 and section 81 of the Service Tax Act 2018, a person aggrieved by a decision of the Director General, such as a bill of demand or an assessment, may apply for a review within 30 days of being notified of the decision. The Director General should decide within 60 days where practicable.

A review application should be a complete argument, not a holding letter. It should:

1. identify each bill of demand and the decision challenged, with dates;
2. explain, issue by issue, why the tax or penalty is wrong, with references to the Act, the relevant orders and Customs' published guides;
3. attach the contracts, invoices, returns and audit correspondence that support each point;
4. state the remedy sought, for example withdrawal of the bill or a reduced amount.

A review suits disputes about facts and documents that Customs may accept once it sees the full picture. It is less useful where Customs has taken a firm position on the law.

A review is optional. If you are dissatisfied with the review decision, you then have 30 days from that decision to appeal to the Customs Appeal Tribunal.

How do you appeal to the Customs Appeal Tribunal?

The Customs Appeal Tribunal, under the Ministry of Finance in Putrajaya, hears appeals against the Director General's decisions under the Customs Act 1967, the Excise Act 1976 and both SST Acts. You can appeal after a review or go straight to it.

The appellant may appear personally or be represented, for example by an advocate and solicitor. Decisions on compounds and seized goods cannot be appealed to the Tribunal.

A party dissatisfied with the Tribunal's decision may appeal to the High Court on a question of law, or of mixed law and fact. The evidence and arguments therefore need to be complete at the Tribunal stage.

Do you have to pay the SST while you appeal?

Yes. Section 96 of the Sales Tax Act 2018, and the equivalent provision in the Service Tax Act 2018, says the tax remains payable even though a review or appeal is pending. Rule 4 of the Customs (Tribunal of Appeal) Rules 2007 adds that all duties, taxes and penalties must be paid before the Tribunal hears the appeal.

Not paying does not pause the dispute. It delays the hearing and can lead to:

• recovery proceedings by Customs for the amount as a debt due to the Government;
• additional late payment penalties;
• travel restrictions against directors, which Customs has used in the past for unpaid indirect tax.

Practical steps help limit the harm:

• pay with a covering letter stating that payment is made without prejudice to the review or appeal, and keep proof of payment;
• if the business cannot pay in full, raise this with Customs in writing early and record any arrangement agreed;
• keep the appeal moving so that any refund after a successful appeal is not delayed.

Weigh the amount demanded, the strength of the grounds and the cost of each route before deciding whether to review, appeal or negotiate.

When is judicial review possible instead?

Judicial review lets the High Court quash a decision made without legal power, irrationally or unfairly. It is not a re-run of the tax arithmetic. Under Order 53 of the Rules of Court 2012, you must first obtain leave, and the application must be filed promptly and in any event within three months of the decision being communicated.

Where the Tribunal route is available, the courts usually expect it to be used. Two features of the law make the choice important:

• section 141N of the Customs Act 1967 provides that once an appeal is lodged with the Tribunal, the issues in dispute generally cannot be the subject of court proceedings between the same parties, unless the court case started first or the appeal is withdrawn, abandoned or struck out;
• judicial review is mainly for cases the Tribunal cannot deal with, or where Customs had no power to act.

In Lam Ah Company Sdn Bhd v Ketua Pengarah Kastam dan Eksais, the Court of Appeal held that GST bills of demand issued after GST was repealed could not be appealed to the Tribunal, so section 141N did not bar judicial review, and sent the case back to the High Court.

Choosing the wrong route can cost time you do not have. Our appellate advocacy team handles judicial review and High Court appeals.

What should you do in the first week after receiving a bill of demand?

Fix the deadlines, collect the documents and decide on the route within days, not weeks.

1. Record the date you received the bill and how it was delivered.
2. Gather the bill, the audit findings, your SST returns, invoices, contracts and all correspondence with Customs.
3. Ask your tax agent to check the computation and identify which items are disputed in law and which in fact.
4. Decide whether to seek a review or appeal directly, and consider whether judicial review is a real option.
5. Plan for payment, since the tax remains payable.

NZSK's litigation team works alongside your tax agent: the agent handles the figures, and we prepare the grounds, the review application or appeal and the hearing. We advise after reviewing the bill and documents at a consultation, online or in person. See our tax, SST and customs disputes page.