Government Submits Bill to Abolish Offshore Inbound Tourism GST Regime

On 18 October 2026, the Government submitted a Bill to the People’s Majlis proposing significant changes to the Goods and Services Tax Act, including the discontinuation of the GST regime applicable to offshore suppliers of inbound tourism products and related booking or agency services.

If enacted in its current form, the Bill would substantially reverse the inbound tourism product provisions introduced through the Eighth Amendment to the GST Act. This would include the removal of all the rules including the special registration, place of supply, tourism GST and margin-based valuation rules applicable to offshore suppliers.

Transitional Provision

The Bill specifically provides that the charging of TGST under the offshore inbound tourism regime from 1 October 2026 would cease upon commencement of the amendment. Where GST has already been charged under these provisions from 1 October 2026, the amount collected would be required to be refunded to the person from whom it was collected. The Bill also provides that no further obligations would be imposed under these provisions in respect of the period from 1 October 2026 up to the commencement of the proposed Ninth Amendment to the GST Act.

Other Significant Changes

Value of supply

Under the proposed changes, supplies between unrelated parties would be added to the categories of transactions for which the value of supply may be determined in accordance with rules prescribed under the GST Regulation. In practical terms, this would give MIRA a basis to examine and, where appropriate, determine or adjust the value attributed to transactions between unrelated parties, including the consideration charged for the relevant supply.

Expanded information-gathering powers

The Bill proposes to replace section 59-1, which currently enables MIRA to obtain information to identify offshore suppliers of inbound tourism products, with a general power for the Commissioner General to obtain information from GST-registered persons about the persons with whom they transact, for the purpose of identifying persons required to register for GST.

New general GST anti-avoidance rule

A new general anti-avoidance provision for GST is also proposed. Broadly, where a transaction gives rise to a tax benefit and obtaining that tax benefit is a main purpose or one of the main purposes of the transaction, the Commissioner General would be empowered to disregard or reconstruct the transaction and determine the GST payable as though the tax benefit had not arisen. The proposed definition of a tax benefit is broad and includes, among other matters, reductions or deferrals of GST, increased input tax deductions or refunds, and treating taxable supplies as not being subject to GST.

The Bill also provides that consequential amendments and new regulations to give effect to the proposed changes to be made and published in the Government Gazette within 90 days of the commencement of the amendment.

Effective Date

The proposed Ninth Amendment will only take effect once it is passed by the People’s Majlis, ratified by the President and published in the Government Gazette. Until then, the existing provisions of the GST Act, including the offshore inbound tourism regime, remain in force.