It is a tax levied on various services rendered. It is an indirect tax, levied by service provider on receiver of services. The responsibility to charge and deposit service tax with government lies on the service provider.
Services on which it is applicable
Service tax is charged on all services except the one which are mentioned in the negative list under Finance Act. Practically, it covers almost all services.
When is registration required
Registration is required when the turnover from services exceeds Rs. 9 lakh. However, levy and collection needs to start when the turnover exceeds Rs. 10 lakh.However, registration is recommendedfor every new business involved in provision of services in case business is expected to have turnover over Rs. 9 lakh in future.
Who needs to pay service tax
Receiver of service needs to pay service tax to the service provider. Thereafter, the service provider will deposit the service tax with government.
Due date for payment for service tax
In case of companies, societies and trust, service tax needs to be deposited with government on monthly basis. For proprietorship and partnership firms, it is required to be deposited on quarterly basis.It can be deposited online on www.aces.gov.in
Due date for filing service tax return
Service tax return is filed in form ST-3 twice for every financial year. The due date of return for half year ending on 30th September is 25th October and for half year ending on 31st March is 25th April.
Current rate of service tax
Current rate of Service tax is 15% divided into following components-
(a) Service tax @14%
(b) Swachh Bharat cess @0.5%
(c) KrishiKalyancess @0.5%
Time required to obtain service tax registration
Government is required to issue service tax registration within 7 days of filing of form ST-1 in case all documents are in order. In case there is no acceptance or rejection within 7 days, then the registration is automatically deemed to have been granted.
Penalty for not obtaining service tax registration
In case of a failure to obtain service tax registration, a penalty of uptoRs. 10,000/- or Rs. 200/- per day during which the default continues, whichever is higher, is applicable.
Service tax on export related services
Service tax is not applicable on services exported from India. However, it is recommended that service exporters should obtain service tax registration.