“Navigating GST and Invoicing in NSMM Projects: Compliance Tips for International Teams”

1. Know What’s Taxable—and What’s Not

Under Nigerian law, most construction works are subject to GST, but certain government-funded or health-care projects may enjoy exemptions. When you draft your BOQ:

• Tag each line item as “Taxable” or “Exempt” in your spreadsheet or billing template.

• Reference the GST schedule in your tender documents so everyone knows why some items carry tax and others don’t.

For example, installing drainage on a private road project will attract GST at the prevailing rate, while supply and install of medical equipment in a public hospital renovation may be exempt. Clearly distinguishing these up front prevents confusion at billing time.

2. Apply the Correct HSN Codes

Every measurable work under NSMM must be matched to an HSN (Harmonized System of Nomenclature) code when you prepare your invoice. These codes classify goods and services for tax authorities. A wrong code can mean rejected invoices or audits months later.

• Download the official HSN list and keep it handy when mapping your BOQ items.

• Create a simple lookup in your worksheet: column A for NSMM item description, column B for its HSN code.

This makes invoice preparation as easy as filling in quantities and rates—your system auto-populates the correct tax code.

3. Calculate Input vs. Output GST

As a foreign contractor or consultant, you’ll deal with both input (GST you pay on purchases) and output (GST you charge your client). Under NSMM invoicing:

• Show your output GST clearly on the invoice—list the taxable value, then the tax amount, then the total due.

• Keep records of your input GST (materials, subcontractor bills, equipment hire). You’ll need these when filing your returns or claiming credits.

4. Embrace E-Invoicing Standards

Nigeria’s tax authority now requires e-invoices for many sectors. Your invoice software or template must:

• Include a unique invoice reference number.

• Provide buyer and seller GSTIN (GST identification numbers).

• Embed the HSN codes and tax breakdown for each BOQ line.

Adhering to e-invoicing rules speeds approval and payment. It also shows your professionalism when working across borders.

5. Timely Submission and Follow-Up

Don’t wait until project close-out to send invoices. NSMM encourages monthly Interim Payment Certificates (IPC) that include GST calculations for work done to date. Regular billing:

• Keeps your cash flow healthy.

• Reduces the volume of tax you must account for at once.

• Helps clients budget and avoid large lump-sum payments.

A quick reminder email after each submission—summarizing tax–inclusive and tax–exclusive totals—goes a long way toward prompt payment.