What is the difference between sales tax and service tax?
SST is two taxes under one name. Sales tax is charged once, by a registered manufacturer or importer, on taxable goods. Service tax is charged by a registered business on taxable services it provides, including food and drink served by an F&B outlet.
| Sales tax | Service tax | |
|---|---|---|
| Who charges it | Registered manufacturers and importers | Registered providers of taxable services |
| Typical rates | 5% or 10% on taxable goods | 8% standard; 6% for food and beverage and a few other services |
| Does a retail counter add it? | No, it is already in the cost of the goods | Only if the business is registered for service tax |
When does a cafe or restaurant have to charge service tax?
A food and beverage business must register for service tax once its taxable turnover exceeds RM1.5 million over 12 months. Once registered, it charges 6% service tax on food and drink it serves, and files an SST-02 return every two months.
Below the threshold, a cafe does not charge service tax at all, and the receipt should not show any.
What should the receipt show?
- The business name and its SST registration number, if registered
- Each item and its price
- The service tax charged, as its own amount, separate from the price
- The total paid and how it was paid
A service charge (often 10% in restaurants) is the outlet's own charge, not a tax. It should be labelled as a service charge so customers do not confuse it with SST.
How should a POS work out SST?
Tax should come from the product, not from a number typed in at the end. Each product carries a tax code; the POS applies it to each line, shows the tax on the receipt and adds it up the same way in reports. That way the SST in your reports matches the SST your customers paid, sen for sen.
Orbit POS works this way. Every product has a tax code, SST is worked out per line, and money is counted in whole sen so totals never drift. If you keep your books in Orbit Finance, each completed sale is sent across once, with its tax, so Finance can prepare the SST-02 figures without retyping.
Rates and thresholds as at 04/10/2026. Confirm on the Royal Malaysian Customs Department MySST portal (mysst.customs.gov.my) before relying on them.