Please enable JS
img
KLRCA Arbitration Circular 01 – Application of Goods and Services Tax
30 Mar 2015

CIRCULAR BY KLRCA ON THE PROCEDURE FOR IMPLEMENTATION OF GOODS AND SERVICES TAX IN ARBITRATION PROCEEDINGS ADMINISTERED BY KLRCA

Pursuant to the Goods and Services Tax Act 2014, commencing 1 April 2015 a 6% Goods and Services Tax (“GST”) will become payable on the provision of all services. This will include the provision of services by the KLRCA and also by arbitrators in relation to all arbitration proceedings administered pursuant to the KLRCA Arbitration Rules.

The procedure for the collection of GST will be as follows.

Upon the commencement of arbitration proceedings, a provisional advance deposit will be requested to be paid in equal shares by the parties, pursuant to Rules 13(1) and 13(2) of the 2013 KLRCA Arbitration Rules. Such deposit will be exempt from GST and shall act as security to cover the costs of commencing the arbitration proceedings, ensuring the prompt progress of the proceedings once the arbitral tribunal has been constituted.

Upon the constitution of the arbitral tribunal and the fixing of the tribunal’s fees as well as the administrative costs of the KLRCA, tax invoices will be issued for the costs of the arbitration proceedings. Where the fees of the arbitral tribunal is as per the Schedule of Fees contained in the KLRCA Arbitration Rules, the KLRCA secretariat will advise the tribunal as to the amount of fees to be collected. Where there is an alternative fee arrangement between the parties and the arbitral tribunal pursuant to Rule 12(4), the fees to be collected will be according to that agreement.

The arbitral tribunal will issue tax invoices reflecting the tribunal’s fees. If the arbitrator is registered in Malaysia for the purposes of GST, GST will be payable on their fees. If the arbitrator is not registered, the party will need to account for the GST directly to the Department of Customs.

The KLRCA will issue tax invoices reflecting the KLRCA’s administrative costs, on which GST will be payable.

The costs of the arbitration, including the arbitral tribunal’s fees plus GST and the administrative costs of the KLRCA plus GST, will then be collected in equal shares from the parties by the KLRCA pursuant to Rule 13(3). No fees shall be payable to the arbitral tribunal at this stage.

Payments requested by the KLRCA in MYR can be made by cheque made out to the Kuala Lumpur Regional Centre for Arbitration or to the following account:

Account Name:         Kuala Lumpur Regional Centre for Arbitration

Account Number:     5143 5680 7190

Bank Name:              Malayan Banking Berhad

Bank Address:          Ground & Mezzanine Floors, Wisma Genting, Jalan Sultan Ismail, 50250 Kuala Lumpur

SWIFT Code:            MBBEMYKL

Currency:                   Malaysian Ringgit

Payments requested by the KLRCA in USD can be made by cheque made out to the Kuala Lumpur Regional Centre for Arbitration or to the following account:

Account Name:        Kuala Lumpur Regional Centre for Arbitration

Account Number:     7143 5600 6177

Bank Name:              Malayan Banking Berhad

Bank Address:          Ground & Mezzanine Floors, Wisma Genting, Jalan Sultan Ismail, 50250 Kuala Lumpur

SWIFT Code:            MBBEMYKL

Currency:                   US Dollar

Any provisional advance deposit already paid by the parties will be entirely set off against the costs of the arbitration proceedings to be collected by the KLRCA at this stage.

Any additional or supplementary deposits that may become payable over the course of proceedings pursuant to Rule 13(4) will be collected in the same way. A tax invoice will be issued by the relevant service provider (being the arbitrator or the KLRCA), including GST, with the deposit thereafter collected by the KLRCA. If the service provider is not registered for GST, GST will not be included and must be accounted for directly by the parties.

Should proceedings be completed prior to the delivery of the final award, the Director of the KLRCA will apply the deposits collected to the administrative costs of the KLRCA and fees of the arbitral tribunal as the Director sees fit, pursuant to Rule 13(8).

Any unexpended balance will be refunded to the parties, with a corresponding credit note issued by the relevant service provider (being the arbitrator or the KLRCA). However, any GST collected will NOT be refunded to the parties. It will be up to the parties to account for GST directly with the Department of Customs.

This Circular 01 will take effect on 1 April 2015.

Dated this 26 March 2015.

Sundra-sign
Datuk Professor Sundra Rajoo
Director of KLRCA



Archive