SST for Car Workshops: When to Register and How to Charge Service Tax (2026)
Short answer: workshops that service or repair motor vehicles must register for service tax once the value of their taxable services exceeds RM500,000 in a 12-month period. Once registered, the workshop charges 8% service tax and files a return every two months with the Royal Malaysian Customs Department (RMCD).
What Is SST?
SST (Sales and Service Tax) is two separate taxes:
- Sales tax is charged once, at the manufacturer or importer level.
- Service tax is charged by registered providers of taxable services, including motor vehicle service and repair centres.
For most workshops, service tax is the part that matters.
When Does a Workshop Need to Register?
Registration is required once taxable services exceed RM500,000 in a 12-month period. It is tested two ways:
- Historical method: the current month plus the previous 11 months exceed RM500,000.
- Future method: the current month plus the next 11 months are expected to exceed RM500,000.
Registration is done through RMCD's MySST portal. Workshops below the threshold may register voluntarily, but do not have to.
Rate and Scope of Service Tax
| Item | Details |
|---|---|
| Rate | 8% (since 1 March 2024) |
| Registration threshold | RM500,000 in 12 months |
| Examples of taxable services | General servicing, engine repair, tuning, wheel alignment and balancing, body and paint work |
| Return | SST-02, every two months |
| Deadline | Last day of the month after the taxable period ends |
How to Show SST on Invoices
- Print the workshop's SST registration number on the invoice.
- Put labour (service) and parts on separate lines so the tax on each line is clear.
- Show the service tax amount separately from the pre-tax total.
- Keep copies of invoices for RMCD audits.
How parts supplied during a repair are taxed depends on how they are charged and invoiced. Check RMCD's guide on motor vehicle service or repair, or ask your tax agent, before deciding how your workshop charges.
Common SST Mistakes
- Registering late after sales pass RM500,000, then having to pay tax that was never collected from customers.
- Charging SST before being registered, which is not allowed.
- Still using the old 6% rate after March 2024.
- Missing the two-monthly return deadline.
SST and e-Invoice: Are They the Same?
No. SST is a tax collected by RMCD, while e-Invoice is a digital invoice format under LHDN. Their thresholds differ too: RM500,000 for service tax registration, and RM3 million for the e-Invoice exemption. Read the e-Invoice guide for workshops.
This information reflects the rules as of 30 September 2026. Confirm your workshop's position on RMCD's MySST portal or with a tax agent.
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FAQ
Do car workshops have to charge SST?+
Workshops providing motor vehicle servicing or repair must register and charge service tax once the value of their taxable services exceeds RM500,000 in a 12-month period. Workshops below that level do not need to register.
What is the service tax rate for workshops?+
The general service tax rate has been 8% since 1 March 2024, and it applies to motor vehicle servicing and repair.
When are SST returns due?+
The SST-02 return and payment are due every two months, no later than the last day of the month after the taxable period ends.
Are spare parts subject to service tax?+
How parts supplied during a repair are treated depends on how they are charged and invoiced. Check the Royal Malaysian Customs Department guide on motor vehicle service or repair, or ask your tax agent, before deciding how to charge.