By THARMINI KENAS tharmini@thestar.com.my

While the GST system has been implemented in Malaysia since 2015, most have much to learn when it comes to GST and strata properties.

What are JMB & MC?

Joint Management Body (JMB) and Management Corporation (MC) is the property managers of stratified properties. They are the ones that are responsible for providing the proper maintenance of the building, common area and the facilities in the property.

The property management of stratified properties involves building maintenance, housekeeping, security management, car park management, promotions and marketing, financial, accounting and administration.

The functions of JMB & MC

Among the functions of JMB and MC is maintenance management which includes the maintenance and supervision of work on the property, financial management of the estate, ownership or tenancy management (also includes rental and tenancy period), promotional activities and general management (managing and interacting with the service providers).

Things that are subjected to GST:

• Any provision of management services by the provider of the property management, in this case, JMB and MC, to the commercial parcel owner.
• Any provision of management services by the provider of the property management to any person other than residential parcel owner in the residential property.

Commercial properties

JMB and MC are liable

• To issue tax invoice to the subsidiary owners
• To impose GST on the charges
• Account for GST whereby payment received is a consideration for the provision of operational, security, maintenance and other services subjected to GST at the standard rate.

Residential properties: GST exempted.

For commercial properties, service providers such as Tenaga Nasional Berhad (TNB), Indah Water Konsortium (IWK), Security and cleaning services provide services to JMB and MC.

JMB and MC offer management services to parcel owner followed by JMB and MC claiming on input tax incurred.

However, for residential properties, the process stops before the claim on input tax incurred.

It is crucial to be aware of the matters related to GST when it comes to property management as more and more people are living in strata properties.

Want to contribute articles to StarProperty.my? Email editor@starproperty.my.