GST effects on commercial property electricity bills

GST (Goods and Services Tax) is Malaysia’s form of VAT  (Value Added Tax) imposed on the supply of goods and services in each stage of the supply chain from the supplier up to the retail stage of the distribution.

Electricity bills are GST rated also. Residential homes enjoy 0% GST on the first 300kWh while commercial shop and offices do not have such a tax exemption. 

The electricity bills of most of the commercial properties which I help manage are under the owner’s name. With such an arrangement, a utilities deposit for 1 month is collected from the tenant to safeguard the event of tenant not paying their electricity bills. Recently a few of the tenants on the commercial properties which I manage asked to switch electricity bill to their name/company name. I found out the reason was that the tenants wanted to claim back the GST portion on their electricity bills. The tenant can only do that if they are a GST registered person with the Royal Malaysian Customs.

I did a rough calculation how much they can claim back. Based on my experience a standard intermediate shop that is air conditioned fully chalks up electricity bills of an average of RM 3,000 while a unit which uses only fans chalks up RM1,500.

Using my self developed GST calculator for an electricity bill of RM 3000, he can claim around RM180 per month. Works out to around RM 2,160 per month. Not a very big sum but it’s still money which can be refunded from the government. 




The act of changing the bill’s name to the tenant/company name also benefits the landlord, any arrears which is not paid to the electricity company will not be the responsibility of the owner. The electricity utility company will not come after the landlord on late payments because in the first place the bill is not under the landlord’s name anymore.