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Judicial Review Application To Claim Exceptional Input Tax Credit

June 18, 2020

On 16 June 2020, the High Court granted a taxpayer company leave to commence judicial review proceedings to set aside the Director-General of Custom’s (DGC) decision in rejecting the taxpayer’s exceptional input tax credit claim.

The taxpayer was successfully represented by our partner, S. Saravana Kumar, together with an associate, Nur Amira binti Ahmad Azhar from the firm’s Tax, SST & Customs practice.

Brief Facts

The principal activity of the taxpayer is hotel operations where a building was renovated to be used and operated as a hotel. The taxpayer paid goods and services tax (GST) to its suppliers prior to its registration under the GST Act 2014. In 2018, the taxpayer claimed for Exceptional Input Tax Credit (EITC Claim) under Regulation 46(1) of the GST Regulations 2014. The DGC rejected the EITC Claim on the basis that the taxpayer has yet to make any taxable supply both before and after the GST registration.

Taxpayer’s Submission

The taxpayer submitted that the DGC had failed to appreciate that the GST was never meant to burden businesses with additional costs. One of the key mechanisms is that businesses may offset or recover GST incurred on business expenses (i.e. input tax credit) to ensure that GST is chargeable only on the value added by a business. However, in the present matter, the DGC had arbitrarily imposed the additional need for a taxable supply to be made in order to make the EITC Claim. The taxpayer highlighted that the wordings used in Regulation 46(1)(a) do not require the taxpayer to make a taxable supply before making the EITC Claim. Thus, in the absence of such a requirement, the DGC cannot impose an additional requirement on the taxpayer. It is for Parliament to make laws and not the DGC.

High Court’s Decision

Upon reading the cause papers and hearing the taxpayer’s counsel and the representative of the Attorney General, who did not object to the leave application, the High Court granted leave to the taxpayer to commence judicial review application against the DGC.


Despite the repeal of the GST Act 2014, taxpayers who are aggrieved by the DGC’s decision in refusing GST refunds and claims, may still seek legal redress by way of judicial review.

It is important that taxpayers ensure that they retain all the relevant materials in relation to their GST refunds and claims to support their judicial review application. Of equal importance, is for taxpayers to file the judicial review application promptly and within the prescribed time frame – i.e. within 3 months from the date when the grounds of application first arose or when the decision is first communicated.


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