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Introduction
Service Tax (ST) was introduced on 1st September 2018, and effective 1st July 2025, the scope has been expanded to cover construction services.
Businesses involved in construction must now ensure proper SST registration, invoicing, return submission (SST-02), and compliance with the latest tax treatment rules. With the major changes since last year, it is time for your esteemed company to cross-check your understanding and whether your practice has fulfilled the service tax requirements.
Module 1 – Service Tax Legislation Overview
- Service Tax Act 2018 and other key legislation provisions
- Definition of taxable services
- Mandatory registration:
- Taxable threshold
- Who must register?
- SST threshold computation
- Effective date on 1 July 2025
- Taxable construction services include:
- Commercial building, infrastructure, M&E services
- Mixed development project
- Contracts spanning pre- and post- implementation period
Module 2 – Exemptions Available
- Construction services exemption available/exclude:
- Pure residential building works and public amenities.
- B2B exemption criteria, e.g. both parties are from same service category
- Finance minister exemption, e.g. Works related to Federal/State Government
- Need to apply?
- Non-reviewable contracts
- Group of companies exemption/relief
- E-Invoice disclosure requirement
- Supplier and customer SST registration number
- Value of taxable services
- Detailed of exemption
Module 3 – SST-02 Return Submission
- How to submit SST-02 accurately:
- Bimonthly via MySST portal, e.g.
- Value of taxable services
- Exempted amounts
- Non-taxable services
- SST payment deadline
- Bimonthly via MySST portal, e.g.
Module 4: Spliting of Building Materials from COnstrction works
- Main-contrcotor/turnkey contractor
- Sub-contractors
- What are the corporation from Developers/project owner’s needed by contractors?
- Treatment of V.O., ommisison and LAD
- How to determine the construction services value?
- Mixed development project
Module 5: Amendment in Retention Sum Treatment
- Special note for retention sums,
- Progress claims and consultants’ certificate
Module 5 – Customs Ruling
- When and how to apply for Customs ruling to confirm facts
Module 6 – Case Study on Various Scenarios
- Purchase building materials on behalf, taxable?
- Back charge of materials to contractor, taxable?
- Treatment of V.O., omission and LAD
- How to determine the construction services value?
- Percentage of completion
Module 7: Common Pitfalls and Appeal Process
- Missing B2B Exemption Documentation
- Various service tax possible penalty
- Appeal process
- Q & A