What is Service Tax?
Service tax refers to tax collected by the government of India from certain service providers for providing certain services. The person who pays service tax can be either a service provider or a service receiver or any other person who is responsible for providing certain services. Service tax is a kind of indirect tax because the service providers pay the tax and recovers it from the service receivers who receive or purchase the taxable services. It is a kind of tax that you pay to the government for enjoying different services received from various service providers
Rule 4: Registration:
- Every service provider who is liable to pay service tax shall apply for registration by using the application Form ST – 1 within 30 days from the date on which service tax is charged. This is very essential.
Rule (6): Payment of Service Tax:
- As per this rule, the service tax will be paid to the credit of the central government by the 6th of every month, if paid electronically and 5th of every month, if paid via other means.
Rule 7: Returns:
- Every service provider shall submit a half yearly return in Form ST-3 or ST-3A together with a copy of the Form TR-6 filled in triplicate by 25th of the month following the half year.
Rule 7 (A) Returns for taxable services provided by transport operators:
- Services/goods provided by transport operators shall also furnish a return within a period of six months from the 13th May of 2003, failing which will lead to penalty.
Rule 7 (B) Revision of Return:
- As per this rule, an assessee can submit a revised return in Form ST-3 to modify or correct any mistakes within 90 days from the date of submission of return.
Rule 7 (C): Amount to be paid for delay in furnishing returns:
- An amount of Rs.500 needs to be paid to the credit of the central government, if you fail to furnish your return within 15 days from the prescribed date of submission. If it gets delayed by more than 15 days, you need to pay Rs. 1000. If it extends beyond 30 days, you need to pay Rs. 1000 plus Rs.100 per month till the date you finally furnish your returns.
Rule 8: Appeal to Commissioner of Central Excise:
- You can appeal to Commissioner of Central Excise in Form ST – 4 under section 85 of the Finance Act, 1994.
Service Tax Rates In India:
In budget 2015, the rate of service tax is 14% from its previous rate of 12, 36%. However, this revised rate of service tax will include Education Cess’ and ‘Secondary and Higher Education Cess’ in it.
New Service Tax Rate is 15% which will be effective from 1st June 2016 which includes Education Cess’ and ‘Secondary and Higher Education Cess’ , Swachh Bharat Cess (0.5%) and Krishi Kalyan Cess(0.5%).
How to Pay Service Tax In India?
You can pay service tax by using a G.A.R -7
Exemptions Under Service Tax In India?
apart from services listed in negative list, following are exempted from Service Tax:
A small scale or individual service provider can enjoy service tax exemption, if its total turnover of taxable services does not go beyond Rs. 10 lakhs in a single a financial year.
The recipients are exempted from paying service tax for the goods and services received from the service provider, if there is written proof indicating the value of the goods and materials and no credit of duty is paid on such goods and materials, and if the services have been rendered under the CENVAT Credit rules.
Service tax is not applicable to the services provided to diplomatic missions and to the officers a diplomatic mission and their family members.
Services such as port services, goods transport services and containerised transport services received by an exporter and used for export of goods are not taxable. In such cases, service tax paid by an exporter on the above mentioned situations is refunded to the exporter.
Services provided to international organizations and the United Nations are not taxable.
Service tax is not applicable to the services provided to a developer of Special Economic Zone or a unit of Special Economic Zone.