All You Need To Know About Excise Duty Malaysia - DHL Express MY

Excise duty is a type of tax imposed on specific goods imported into or manufactured in Malaysia for domestic use. It serves as a regulatory tool to influence consumer behaviour by discouraging the consumption of goods like tobacco and alcohol. 

Since 2019, the government has introduced a 40 sen excise duty on sweetened beverages, which increased to 50 sen per litre starting from 1st January 2024. These measures contribute to public health concerns by limiting the consumption of unhealthy products.

Excise duties play a crucial role in generating government revenue, funding public expenditure, and infrastructure development. Furthermore, they can promote environmental and social objectives, and safeguard local industries by regulating the pricing competitiveness of imported goods.

Goods Subject to Excise Duty

Excise Duty applies to only 7 categories of goods, particularly, motor vehicles, alcoholic beverages, cigarettes, mahjong tiles, playing cards, sugar-sweetened beverages, and premix preparations:

Excise Duty Rates

Excise Duty rates are charged either as a percentage of the value of the goods or as a specified sum of money per unit. 

Examples of goods charged as a percentage their value

Examples of goods charged at a fixed sum per unit

To view the complete list of goods subject to excise duty and their respective charges, refer to the Excise Duties Order 2022.

Exemptions

Excise duty exemptions applied to individual and goods listed in the Excise Duties (Exemption) Order 2013.

However, importers must obtain approval from authorities mentioned in column 5 to be eligible.

The 27 pages document gives a full explanation on how the excise duty exemption work. To quickly access the list of goods eligible for excise duty exemption, go to page 6 (titled Schedule, Part 1). 

Here's a guide to navigate the table of exemptions:

2nd Column: Individuals who are exempted from excise duty

3rd Column: Excise duty exempted goods

4th Column: Requirements for the exemption application

5th Column: Competent authorities

Calculation

To determine the excise duty on your imported goods, you need three key pieces of information:

1. HS Code
2. Import Duty 
3. Excise Duty Rate

Here are the step by step guide on how to calculate it manually following the standard formula.

Step 1: Identify the HS Code

Start by identifying the HS code of your goods using the Malaysian customs HS explorer or DHL free HS searcher.

Note down the rates of both import duty and excise duty associated with your goods as you find the most suitable HS code.

Step 2: Calculate the Import Duty

The import duty is calculated by multiplying the CIF value (the sum of cost of goods, insurance, and freight) of the imported goods by the import duty rate.

 Step 3: Calculate the Excise Duty

To calculate excise duty, add the CIF value and import duty, then multiply by the excise duty rate.

Using the same scenario, here's how you get the excise duty of the pocket motorcycle. 

Another quick way to check excise duty is through DHL's customs tool, DHL MyGTS. Provide a few details about your shipment, and get an accurate estimation of excise duty in three steps.

Payment

After making the necessary declarations using the Customs Import Declaration Form No. 1 (K1 form), you must promptly settle the assessed excise duty for the goods to be released from customs control. 

In most cases, the payment process is facilitated by an appointed Customs agent, who typically handles the payment on behalf of the importer. The appointed agent will require the importer to provide the relevant information and documents of their shipments. By entrusting the payment process to the agent, the importer can ensure a smooth and efficient transaction.

There are 3 methods available for the payment of excise duty:

1. Over the Counter (at Customs Import Offices)

Importers have the option to make payments directly at Customs import offices. 

2. Third-Party Appointed Platforms

Using third-party platforms for payment is another option. Service providers like ePayment, eDagangNet, and similar entities make excise duty payments secure and efficient.

3. Electronic Payment via e-Excise (for Vehicles Only)

For excise duty related to vehicles, there is a specialized electronic payment option known as e-Excise.