TAX317 Taxation 2 Assignment Group Project Questions 2026 | UiTM

TAX317 Assignment Group Project Questions

This Group Project Is Related To The Application Of Service Tax Act 2018.

The Service Tax Act 2018 in Malaysia is a legislation that governs the imposition and administration of service tax, which came into effect on 1 September 2018. This Act was introduced to generate government revenue and support national development.

Your group, acting as a team of tax specialists, is tasked with advising a client on the application of Service Tax Act 2018. Your client’s background is as follows:

Messrs Lexxa & Co. is a legal firm based in Kuala Lumpur providing legal services including, but not limited to litigation, corporate advisory, and conveyancing. The firm is a partnership business and qualifies as a taxable person providing taxable services. The business commenced on 1 January 2025 and uses historical method to measure its threshold limit for service tax registration. The financial year end for the business is 31^st December.

Lexxa & Co. adopts the following billing practices for its local clients:

• Charges professional fees for legal services rendered;
• Recovers disbursement expenses incurred on behalf of clients;
• Some disbursements are strictly treated as non-taxable pure disbursements, while others are marked-up or bundled into service charges, making them taxable.

Below is the firm’s revenue data for selected months from commencement.

Required

1. Assume the current month is June 2025 and Lexxa & Co. is applying historical method to measure the threshold limit. Explain the followings to your client (specify the relevant section(s) of Service Tax Act 2018 to demonstrate your technical understanding):

i. Define taxable service and taxable person.

ii. Explain the taxable period for service tax purposes.

iii. Identify FOUR (4) specific examples of services provided by Lexxa & Co. that are subject to service tax.

iv. Determine the date Lexxa & Co. is liable to become a service tax registrant (support your answer with relevant computation)

v. Determine the effective date of Lexxa & Co. registration as a taxable person.

vi. Provide FOUR (4) statutory responsibilities of Lexxa & Co. as a taxable person.

 (20 marks)

2. Based on the answer in Question 1, calculate the followings (indicate clearly the separation of items in your workings to demonstrate computation accuracy):

i. Service tax for the first taxable period
ii. Service tax for the second taxable period
iii. Service tax for the third taxable period

(18 marks)

3. Prepare the following statutory documents and records accurately for Lexxa & Co.:

i. SST-01

ii. SST-02 for the second taxable period

iii. An invoice issued to a client within Malaysia for the month of August 2025.

iv. A debit note issued to a client within Malaysia in the month of November 2025 for the transaction in October 2025.

v. A credit note issued to a client within Malaysia in the month of December 2025 for the transaction in November 2025.

(22 marks)

4. Strategic compliance in service tax refers to a proactive approach where a business plans its activities to comply with service tax laws while also achieving its business objectives. Based on Lexxa & Co.’s scenario:

i. Discuss THREE (3) strategic importance of proper invoicing and the strict segregation of pure disbursements from marked-up disbursements in determining the correct service tax liability for a legal firm.

ii. Assume Lexxa & Co. expands its operations and provides services to overseas clients in relation to their properties situated in Malaysia and outside Malaysia, discuss whether service tax will still apply to these exported services.

(10 marks)

5. In the context of service tax, sustainable decision making involves ensuring compliance with the Service Tax Act 2018 while maintaining transparency, ethical practices and long-term financial stability.

i. Evaluate the financial, legal and ethical risks faced by Lexxa & Co. if the firm incorrectly classifies all disbursements as non-taxable.

ii. Propose TWO (2) sustainable decision-making practices that the firm should adopt to ensure long-term tax compliance and maintain ethical relationships with client.

(10 marks)
(Total: 80 marks)

End of Question