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Service Tax

At present, the effective rate of Service tax is 12.36%. The above rate comprises of Service tax @ 12% on “Gross Value of taxable service”. Education cess [EC] @ 2 % on service tax amount. Secondary and Higher Education cess [SHE] @ 1 % on service tax amount.

Who Is Liable To Register?

  • Any provider of taxable service whose aggregate value of taxable service received in any financial year exceeds Rs.9,00,000/-
  • Service receivers who are liable to pay service tax under reverse charge mechanism.

Registration procedure under Service Tax:

Step 1: Apply for registration of service tax in Form ST – 1 to the Superintendent of Central    Excise. Online application can also be made.

Step 2: Submit along with Form ST – 1 the following documents.

  • Permanent Account Number (PAN)
  • Affidavit declaring the commencement of the services
  • Copy of passport or ration card or any other document of residential proof.
  • Passport size photograph of the applicant in case of individual and of partners in case of firm and of directors in case of a company.
  • Partnership deed in case of firm.
  • Memorandum and Articles of Association in case of company.

Step 3: The Superintendent of Central Excise will grant a certificate of Registration in Form ST- 2 within 7 days of the date of receipt of application.

Step 4: Certificate of Registration can be surrendered if the applicant ceases to provide the taxable service for which he had been registered.

Persons Liable for Service Tax:

  • Any provider of taxable service whose aggregate value of taxable service received in any financial year exceeds Rs.10,00,000/-
  • An input service distributor.
  • Service receivers who are liable to pay service tax under reverse charge mechanism.

Payment Of Service Tax:

Service tax is payable on accrual basis as per point of taxation rule. Where the service provider receives only a part of the total service charges, Service tax shall be paid on proportionately only on such part and not on the entire consideration. The balance service tax will have to be paid on receipt of consideration. Therefore the service tax is payable only on realized value and not on bill value.

Service Tax Query