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:
Category | Example |
Motor vehicles | ATVs, vans, cars, motorcycles |
Alcoholic beverages | Wine, beer, vodka, whiskey |
Cigarettes include Tobacco and Cigars | Smoking pipes, cheroots, e-cigarettes, vapes, and their liquid/gel |
Mahjong Tiles | Plastic/wood/paper mahjong tiles |
Playing Cards | - |
Sugar-Sweetened Beverages (SSB) | Fruit juices, coconut water, energy drinks, flavoured milk |
Premix preparations (will be effective on 1st March 2024) | 2-in-1 instant tea, 3-in-1 coffee mix |
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
HS Code | Description of goods | Rate of Duty |
8703.21.42 00 | All-Terrain Vehicles (ATV) | 65% |
8711.20.92 00 | Mopeds or motorised bicycles | 20% |
9504.40.00 00 | Playing cards | 10% |
9504.90.34 00 | Mahjong tiles, of wood/paper/plastics | 10% |
9614.00.90 10 | Smoking pipes (including pipe bowls) | 10% |
Examples of goods charged at a fixed sum per unit
HS Code | Description of goods | Rate of Duty |
2009.89.10 00 | Blackcurrant juice | RM0.50 per litre |
2204.10.00 00 | Sparkling wine | RM450.00 per 100% vol. per litre |
2206.00.20 00 | Saké | RM60.00 per 100% vol. per litre |
2208.60.00 00 | Vodka | RM150.00 per 100% vol. per litre |
2402.10.00 00 | Cigars, cheroots and cigarillos, containing tobacco | RM400.00 |
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:
- HS Code
- Import Duty
- 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.
Formula: CIF Value X Import Duty Rate = Import Duty | |
Scenario | A pocket motorcycle with an HS code of 87.11.20.93.00, having a CIF value of RM5,000, and subject to a 30% import duty. |
Calculation | RM 5,000 × 30% = RM 1,500 |
Import duty of pocket motorcycle | RM1,500 |
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.
Formula: (CIF Value + Import Duty) x Excise Duty Rate = Excise Duty | |
Scenario | A pocket motorcycle with an HS code of 87.11.20.93.00, having a CIF value of RM5,000, and subject to a 30% import duty. |
Calculation | (RM 5,000 + (RM5,000 × 30%)) x 20% = RM1,300 |
Excise duty of pocket motorcycle | RM1,300 |
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.
The excise duty for cars depends on their engine capacity.
To check the excise duty of your car, first you will need to figure out what is the goods' HS code. This can easily be found using DHL free HS searcher or JKDM website.
The calculation formula of excise goods is -
(CIF value + Import Duty) x Excise Rate = Excise Duty
As for second-hand cars, they follow the formula below,
{(*vehicle value) x (Import Duty Rate)} x Excise Duty Rate = Excise Duty Value
*based on physical valuation
Generally, alcoholic beverages follow this formula for excise duty calculation -
(Duty Rate) x (Volume) x (Alcohol Strength) = Excise Duty
Take sparkling wine (HS code: 2204.10.00 00) as an example. The Excise Rate for this product is RM450.00 per 100% volume per litre.
That means, for sparking wine -
Duty Rate: RM450.00 per 100% volume per litre
Volume: The quantity of sparkling wine in litres
Alcohol Strength: The alcohol content of the sparkling wine, expressed as a percentage
If the sparkling wine is 1 litre with an alcohol strength of 12%, the excise duty will be roughly MYR 54, following this calculation method:
Excise Duty = RM450.00 x 1 litre x (12/100)
Put simply, to get the right excise duty estimation, first you need to find out the excise duty rate using the goods' HS code. This can be done either through DHL free HS searcher or JKDM website.
Since Malaysian customs has classified the alcoholic beverages into niche sub-categories, such as beer, wine, whiskies, and etc, it's important for you to find the excise duty rate using the right HS code
This can be done either through DHL free HS searcher or JKDM website.
