Key Takeaways:
- The expanded 5–10% sales tax on many imported fruits adds to existing import duties and logistics costs, squeezing profit margins and forcing price hikes that risk reducing demand.
- Rising costs and customer price sensitivity are driving retailers, F&B outlets, and wholesalers to explore locally sourced or ASEAN-sourced fruits that carry lower duties or are SST-exempt.
- Importers must review product mix, renegotiate pricing, explore bundled offerings for B2B buyers, and ensure SST compliance to avoid fines, stay competitive, and retain customer loyalty.
SST 2025 and What It Means for Fruit Businesses in Malaysia
If you’re in the business of importing or distributing fruits in Malaysia, chances are you’ve already felt the ripple effects of the revised Sales and Service Tax (SST) that kicked in on 1 July 2025.
Whether you import premium produce like cherries and blueberries or everyday staples like apples, the expanded SST scope is shaking up margins, pricing, and business strategies across the board.
But here’s the real question:
Should you be rethinking your import strategy altogether?
Let’s break it down.
What Changed Under SST 2025?
The government has revised SST with a wider reach on both goods and services. For fruit importers, the biggest change lies in:
- Expanded sales tax coverage under new HS codes
- Higher tax rates (now 5% or 10%) on selected imported food items
- Removal of certain exemptions that previously applied to raw, perishable goods
If you deal in fruits that were once exempt or minimally taxed, you may now find them squarely in the taxable category—especially if they fall under discretionary, non-essential, or premium imports.
Commonly Affected Fruits (Now Taxed at 5%):
- Berries (blueberries, strawberries, blackberries)
- Cherries, peaches, plums
- Grapes (both seedless and seeded varieties)
- Exotic imports like avocados or kiwis
However, imported apples and oranges are exempt from the sales tax, along with mandarin oranges and dates. These exemptions were introduced following public feedback, recognising the fruits’ importance in daily consumption.
Why This Matters to Fruit Importers, Distributors, and Wholesalers
This isn’t just a case of “pass the tax to the customer.” The revised SST affects your entire operating chain, from purchase decisions to pricing strategy, and even how you forecast demand.
Here’s what’s happening on the ground:
Shrinking Margins
The added 5–10% sales tax stacks onto existing import duties, freight costs, and currency fluctuations. Unless you’ve pre-negotiated buffer pricing, this hits your bottom line.
Customer Price Sensitivity
Retailers, grocers, and end consumers are watching their ringgit closely. Price hikes—even by RM1–RM2 per fruit pack—can trigger volume drops, especially outside Klang Valley or urban centres.
READ MORE: Why Imported Fruit Prices are Rising in 2025
Demand Shifts to Local Fruits Alternatives
More B2B buyers (like F&B outlets or retailers) are asking for local substitutions where possible. If you only deal in imports, that puts you in a tight spot.
Compliance Pressures
You may now be required to register or update your SST status, track HS codes more closely, and submit detailed documentation during customs clearance.
What You Can Do Now? 4 Strategic Moves to Stay Profitable
This doesn’t mean you need to exit the fruit import business—but you do need to adapt. Here are four ways to rethink your strategy:
Move #1 – Review Your Product Mix
Take a hard look at your import catalogue. Which items are still viable after SST? Which ones are dragging down profits?
You may want to:
- Focus on higher-volume fruits with consistent demand (e.g. apples, grapes)
- Drop low-volume, high-duty imports with poor turnover
- Introduce value-add packs (e.g. mixed fruit boxes) to increase perceived value
PRO TIP: Use HS code-based tax references from Customs or engage a trade consultant to verify your item classifications.
Move #2 – Diversify With Local or Regional Alternatives
If you’ve never explored local or ASEAN-sourced fruits, now’s the time.
Fruits from Thailand, Indonesia, or Vietnam may carry lower duties or be more SST-favourable. Certain local producers also now offer export-quality tropical fruits at wholesale prices.
Start building relationships with:
- Local farms and cooperatives
- Regional suppliers from lower-tax jurisdictions
- Cold chain logistics providers who can support hybrid sourcing
A quick cost comparison between 5 popular fruits among Malaysians consumers:
| Fruit Type | Origin | Tax Category | SST Impact (Estimated) |
| Blueberries | USA | Non-essential | +5% |
| Cherries | Australia | Non-essential | +5% |
| Bananas | Local / ASEAN | Exempt | 0% |
| Mangoes | Thailand | Essential | 0%–5% |
| Grapes (Seedless) | Chile | Non-essential | +5% |
Disclaimer: Tax classification varies based on specific HS codes. Confirm with your customs agent.
Move #3 – Bundle or Tier Your Offerings for B2B Buyers
Hotels, restaurants, and retailers are also feeling the squeeze. Work with them to stay within budget by offering:
- Bundled fruit packages (e.g. breakfast fruit mix, smoothie box)
- Tiered pricing based on volume or variety
- Ready-to-eat or pre-cut fruit services to justify premium pricing
The goal? Make imported fruit feel worth the cost, not just another expense.
Move #4 – Revisit Your Pricing & Contracts
You may need to renegotiate contracts with your regular buyers. Be transparent:
- Break down the SST impact
- Offer alternative sourcing options
- Suggest smaller, more frequent orders to manage freshness and wastage
Also, revisit your cost-plus pricing model. A fixed markup might no longer cover your tax burden. Consider dynamic pricing or volume-based discounts.
SST Compliance for Fruit Vendors
If you import more than RM500,000 worth of taxable goods annually, you are required to register for SST if you have not already done so. You must also issue SST-compliant invoices and file regular returns, ensuring that you accurately track which items are exempt and which are taxable.
REMINDER: The deadline for SST registration (under revised scope) began on 1 August 2025, with enforcement ramping up after 31 December 2025. Late compliance may result in fines or backdated penalties.
The Bottom Line
The revised SST isn’t the end of the imported fruit business in Malaysia, but it is a wake-up call. Margins are thinner, customers are pickier, and compliance is stricter.
Instead of resisting change, lean into it by
- Rethinking your product and sourcing mix
- Supporting your B2B customers with smarter pricing and bundles
- Staying compliant, informed, and agile
The most resilient fruit businesses will be the ones that adapt quickly, act transparently, and know how to create value beyond just volume.
Don’t Get Caught Unaware by SST Changes
Malaysia’s latest SST updates are here — and delays in adapting could cost your business. Stay ahead with Bispoint:
- Read our latest blog posts for clear, step-by-step guidance on compliance.
- Follow us on Facebook for quick, practical SST updates you can act on immediately.
- Book a consultation today with our tax experts to safeguard your business and avoid unnecessary penalties.
