Menu
We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.
The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ...
Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.
Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.
S Sdn Bhd v Director General of Customs & Anor
In the recent case of S Sdn Bhd v Director General of Customs & Anor, the High Court struck down anti-dumping duties imposed on an exporter who is a licensed manufacturing warehouse (“LMW”) and enjoying customs duty exemptions granted under the Customs Act 1967 (“Customs Act”). The Court rejected the argument by the Director General of Customs (“Customs”) that customs duty exemption granted under the Customs Duties (Exemption) Order (“Exemption Order”) did not extend to anti-dumping duties imposed under the Countervailing and Anti-Dumping Duties Act 1993 (“Anti-Dumping Duties Act“).
Brief Facts
S Sdn Bhd (“Taxpayer”) manufactures kitchen products solely for export purposes. The Taxpayer is a licensed warehouse (“LW“) and an LMW regulated by S.65 and S.65A of the Customs Act respectively. To manufacture the exported kitchen products, the Taxpayer imported steel from China, which was subject to anti-dumping duty pursuant to the Customs (Anti-Dumping Duties) Order 2018. The Taxpayer refused to pay anti-dumping duty on the imported steel used solely for the manufacture of the kitchen products, contending that it was exempted as a LW and LMW licensee. The Customs Appeal Tribunal upheld the imposition of anti-dumping duties on the Taxpayer.
High Court’s Decision
Upon hearing the parties, the High Court allowed the Taxpayer’s appeal. The High Court accepted that the customs duty exemption granted to LWs and LMWs under the Exemption Order includes anti-dumping duty pursuant to the definition of “customs duty” under S.2(1) of the Customs Act.
Conclusion
This landmark decision is of critical importance to exporters. Anti-dumping duties exist to protect domestic manufacturers from unfair competition. There is no reason why anti-dumping duties should be imposed on products manufactured solely for export. The attempt by Customs to impose such duties would only result in manufacturers moving their facilities to more tax-friendly jurisdictions. The High Court has correctly upheld the intention of Parliament and the Ministers to encourage increased investment in Malaysia by export industries.
The Taxpayer was successfully represented by Dato’ Nitin Nadkarni, Ivy Ling Yieng Ping, and Jay Fong Jia Sheng from the Tax, Customs & Trade Practice Group of Lee Hishammuddin Allen & Gledhill.
If you have any queries, please contact Associate, Jay Fong Jia Sheng (fjs@lh-ag.com), Partner, Ivy Ling Yieng Ping (il@lh-ag.com), or Consultant, Dato’ Nitin Nadkarni (nn@lh-ag.com).
Learn more about our partners who specialize in this area