The input tax claim is fully allowable under regulation 46(1) of GST Regulations 2014, with no basis for reduction despite the repeal of the GST Act 2014.

Introduction

Nordin Hassan J:

[1] This is the appellant's appeal against the decision of the Royal Custom's Appeal Tribunal dated 12 July 2019 pursuant to s 148 of the Good and Services Tax Act 2014 ('GST Act 2014').

The Background Facts

[2] The relevant background facts in the present appeal are the following:

(i) The appellant is a Malaysian company in the business of leasing land and properties;

(ii) On 9 August 2016, an agreement was entered between the appellant with Port Klang Authority and Port Klang Free Zone Sdn Bhd to lease 3 parcels of land amounting about RM20.3 million. The parcels of land are known as P410, P411 and P412;

(iii) In February 2017, the appellant constructed a warehouse on parcel P411 to complement the demand for the logistic facilities services. The construction of the warehouse costs about RM167.56 million exclusive GST and was completed in April 2018;

(iv) Thereafter, on 27 October 2017, the appellant entered into a tenancy agreement to rent the 3 parcels of land to CWT Commodities (M) Sdn Bhd ('CWT'). The period of the tenancy was from 1 March 2018 until 29 February 2020;

(v) On 4 April 2018, the appellant submitted its application for GST registration since the rental generated from the said tenancy agreement with CWT would exceed the registration threshold of RM500,000.00;

(vi) The appellant's application for GST registration was approved in April 2018 and the effective date of the GST registration was on 1 May 2018. As such, the appellant's rental income from 1 May 2018 would be treated as taxable supplies and subjected to 6% GST;

(vii) As regard to the construction of the warehouse before the appellant was registered for GST, the appellant incurred an input tax of RM1,010,006.09 where the detail particulars are as follows:

(viii) Next, by letter dated 20 April 2018, the appellant filed an application to claim the input tax in relation to capital goods in the amount of RM1,010,006.09 pursuant to reg 46(1) of GST Regulation 2014 ('the Regulations');

(ix) Meanwhile, on 1 September 2018, the GST Act 2014 was repealed;

(x) The 2nd respondent then by letter dated 28 August 2018 informed the appellant that the appellant was entitled to the input claim pursuant to reg 46 but only 3.36% of the total amount incurred by the appellant in constructing the warehouse which is the amount of RM33,963.70;

(xi) For ease of reference the said letter dated 28 August 2018 reproduced herein below:

(xii) Dissatisfied with the decision of the 2nd respondent in the said letter dated 28 August 2018, the appellant filed an application to review the said decision on 26 September 2018 pursuant to s 124(1) of the GST Act 2014;

(xiii) The application for review was rejected by the 2nd respondent by letter dated 24 October 2018 and the decision was made after taking into account that the appellant was a taxable person from 1 May 2018 until 31 August 2018. The said letter dated 24 October 2018 is reproduced as follows:

(xiv) The appellant then filed an appeal to the Tribunal pursuant to reg 2 of the Custom's (Appeal Tribunal) Regulations 2007;

(xv) On 12 July 2019, the Tribunal dismissed the appellant's appeal.

(xvi) Hence, the present appeal by the appellant against the said decision.

The Appellant's Grounds Of Appeal

[3] The appellant's grounds of appeal are the following:

(i) there is no basis in law to limit and apportion the appellant's input tax claim due to the repeal of the GST Act and/or the period in which the appellant was a GST registered person;

(ii) the calculation by the 2nd respondent with regards to the amount of input tax to be paid to the appellant in the sum of RM33,963.70 is wrong and/or takes into account of wrong facts and failed to consider relevant factors;

(iii) the 2nd respondent's calculation in relation to the input tax is discriminatory against the appellant;

(iv) the 2nd respondent had violated the appellant's legitimate and reasonable expectation;

The Respondent's Submission

[4] Conversely, the respondents in es