(TAX UPDATE) The Real e-Invoice Challenge for Hardware Shops

Recently, one hardware shop owner told me:

“Boss, can or not… I sell cement, bricks, steel every day. You help me set up the e-Invoice system, I just press one button, all done lah?”

I smiled politely, but in my heart, I wanted to say:

“With this new e-Invoice rule, your problem is not the system. Your real headache is at the counter, when your cashier blur-blur trying to split invoices while customers queue up.”

So, is the interpretation correct? Yes, generally correct. Let me explain more clearly and highlight the key points based on:

The latest LHDN e-Invoice Guideline version 4.2
Common hardware shop practices, especially for those dealing with construction materials

The Key Rule: Restriction on Using Consolidated e-Invoice

According to LHDN e-Invoice Guideline version 4.2, Section 3.7:

Certain industries and types of goods are not allowed to use Consolidated e-Invoice. Meaning, you must issue individual e-Invoice for every transaction, even small sales.

One of the restricted categories is:

Manufacturing and Trading of Construction Materials

So, for hardware shops selling construction materials, you cannot issue a Consolidated e-Invoice for those items. You must issue individual e-Invoice for every sale.

What is Considered Construction Material?

The CIDB Fourth Schedule (Jadual Keempat) provides the official reference list.

Examples include:

Cement
Bricks
Concrete
Steel, Iron, Rebars
Aluminium
Glass
Pipes and sanitary systems
Ceramic tiles and sanitary fittings

If you sell these, you cannot use Consolidated e-Invoice. You must issue e-Invoice for each transaction, no exceptions.

What Can Hardware Shops Use Consolidated e-Invoice For?

Items like:

Small retail goods such as screws, nails, sandpaper, non-construction grade PVC pipes, glue, and similar products

As long as these items are not listed under construction materials in the CIDB Fourth Schedule, you can:

Accumulate small retail sales throughout the day
Issue one Consolidated e-Invoice for those items

But be careful that the guidelines are very clear. The restriction depends on the type of product, not the amount, not the frequency.

If your shop sells any product listed under CIDB’s Fourth Schedule — cement, bricks, concrete, steel, aluminium, tiles, pipes, and so on … you cannot Consolidate those sales.

Operational Reality for Hardware Shops

This is why I always remind hardware shop owners. Don’t just focus on the system vendor, software, or deadlines.

The real risk is operational … happening at your cashier counter, in front of your customers.

You need to:

Audit your full product list
Refer to the CIDB Fourth Schedule to confirm which items are considered construction materials
Train your staff to classify items properly during sales
Review your POS system and invoicing process to support split e-Invoice issuance
Plan ahead for daily operations to avoid confusion during busy hours

LHDN’s e-Invoice is not just a system change … it’s a process change.

And for hardware shops, this process starts at the counter, not the backend.

Additional Important Notes:

Even during the Grace Period, construction material sales cannot use Consolidated e-Invoice.
The CIDB list is your official guide — if unsure, better double-check the product classification.
LHDN is expected to conduct compliance checks, especially for hardware shops, building material suppliers, and similar businesses.

Prepare early, understand your product categories, train your staff, and streamline your counter process. In the e-Invoice era, small operational details make a big difference for hardware shops.

Happy e-Invoice Phase 3 Rollout.

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