The main activities in the electricity industry are generation, transmission and distribution of electricity. Basically, the supply chain of electricity involves the three processes before it is finally supplied to the consumers. In Peninsular Malaysia the parties involved are Tenaga Nasional Berhad (TNB) and the Independent Power Producers (IPPs), Sabah Electricity Sdn Bhd (SESB) for Sabah and Syarikat SESCO Berhad (SESCO) for Sarawak.
The IPPs in Peninsular Malaysia such as Genting Sanyen Power Sdn Bhd, Powertek Sdn Bhd and Port Dickson Sdn Bhd, are licensed by the Government to generate electricity. The electricity generated is subsequently supplied to Tenaga Nasional Transmission Division who is entrusted to maintain the National Grid System before it is being supplied to TNB Distribution who will finally distribute electricity to the domestic, commercial and industrial consumers. The supplier of electricity in Sabah is SESB while in Sarawak is SESCO.
Service Tax Treatment on the Provision of Electricity
Service tax will not be imposed on the provision of electricity to domestic consumers for the first 600 kWh for a minimum period of twenty-eight days per billing cycle.
Service tax will be imposed on the provision of electricity to domestic consumers for the usage above than 600 kWh for a minimum period of twenty-eight days per billing cycle.
The table below describes the treatment of service tax on the electricity usage and billing cycle.
A registered person is responsible to:
(i) Charge service tax on taxable services,
(ii) Issue invoices and receipts with specific particulars,
(iii) Submit service tax return SST-02 electronically and pay service tax before the due date,
(iv) Keep proper records.
Q : What is the service tax treatment on the provision of electricity?
A : The provision of electricity to the domestic consumer which exceeds 600kWh for a minimum period of twenty-eight days per billing cycle is subject to service tax.
Q : What is the service tax treatment on the provision of electricity to the commercial consumer?
A : The provision of electricity to the commercial consumer is not subject to service tax.
Q : Mr Khalid’s electricity consumption for 17 April 2019 to 16 May 2019 bill (30 days) is 750kWh which subject to RM 0.218/kWh tariff. How much the service tax chargeable to Mr Khalid?
A :
Electricity consumed = 750kWh
Value not subject to service tax = RM 130.80 (600kWh x RM 0.218)
Value subject to service tax = RM 32.70 (150kWh x RM 0.218)
Amount service tax due = RM 1.96 (RM 32.70 x 6%)
Amount of Mr Khalid’s bill = RM 165.46
Q : The electricity bill that Ariff received consist of Kumpulan Wang Tenaga Boleh Baharu (KWTBB) charges, is the charge subject to Service Tax?
A : KWTBB charges are not subject to service tax because it is not related to provision of electricity service.
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Edited by: 浪子
Bibliography
Royal Malaysian Customs Department. (2018). Guide on Electricity Services. Retrieved from
https://mysst.customs.gov.my/assets/document/1.%20Guide%20on%20Electricity%2023082018.pdf
SST - Guide on Electricity Services
Reviewed by 浪子
on
August 26, 2018
Rating:
Reviewed by 浪子
on
August 26, 2018
Rating:
