Most business owners write off a bad debt, take the loss, and move on. What they do not realise is that the SST they already remitted to Customs on that same sale is recoverable. That is a separate chunk of money sitting unclaimed, and Customs has just updated its official guideline on 15 Jun 2026 confirming exactly how to get it back.

Jabatan Kastam Diraja Malaysia recently published a new version of its SST Refund and Drawback Guide covering multiple recovery scenarios. The bad debt refund is one of them, and it is the one most businesses never act on.

One thing worth highlighting upfront: this applies even if your business has since deregistered from SST. The right to claim does not disappear just because you are no longer a registered manufacturer or registered person.

The window is 𝐬𝐢𝐱 𝐲𝐞𝐚𝐫𝐬 from the date you paid the tax to Customs. Here is what you need to do:

1. Write off the debt formally in your accounts and document every recovery attempt, including registered reminder letters and a formal legal demand through a lawyer. The key is showing that payment genuinely cannot be recovered.

2. Calculate your claim. If your customer paid nothing, you recover the full tax amount. If they paid partially, the recoverable tax is proportionate. For example, if your customer paid RM6,000 out of a RM10,000 invoice that included RM500 of Service Tax, you can only recover the RM300 that corresponds to the unpaid RM4,000 portion.

3. Compile your documents: application letter, Borang JKDM No. 2, computation statement, sales invoices, debtor ledger, aging report, proof of collection efforts, proof of write-off, official payment receipt, letter of authorisation if filing through an agent, and your bank account details.

4. Submit to the Hasil Accounting Branch at the Customs Technical Services Division in the state where your business operates.

Six years feels long. But old debts get messy, documents go missing, and staff who handled those transactions move on. If you have outstanding bad debts from the past few years, now is the right time to check whether there is recoverable SST sitting in there.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.

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