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Services - Know About Service Tax Liability |
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Ensure a Bright Tomorrow... |
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| Know your Service Tax today |
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| What is it |
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Who Pays it |
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| 1. |
Normally it is to be paid by the service provider. However, in certain cases the responsibility is on the service receiver, e.g., services provided by a goods transport agency for transport of goods by road; sponsorship receiver providing service to sponsor, or where the service provider is located outside india. |
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| 2. |
Small service providers are exempt. This category covers any service provider whose turnover was less than Rs. 8 lakh in previous year. Tax is payable by such person at normal rate on turnover beyond Rs. 8 lakh in this year. To arrive at this amount, turnover of taxable services alone is to be taken. |
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Tax rate and value of service for computing tax liability |
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| 1. |
Service tax rate is 12%. In addition, 'education cess' @ 2% and 'secondary and higher education cess' @ 1% is collected on service tax amount. Therefore , total tax rate comes to 12.36% (i.e. 12% + 3% of 12% ). |
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| 2. |
The value for computing tax is the gross amount charged for a service. |
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| Registration of tax payer |
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| 1. |
Every taxpayer is required to take registration with the department. Small service providers would take registration on crossing a turnover of Rs. 7 lakh. |
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| 2. |
Application for registration , in 'Form ST-1' is to be filled with the local Central Excise and Service Tax Office. |
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| 3. |
Registration is granted within seven days of filling of application. |
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| Records & Invoices |
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| 1. |
Records, including computerised records, maintained by taxpayer, in compliance of any other law are acceptable. |
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| 2. |
Service provider would issue invoice/challan/bill within 14 days from providing the service. However, if payment towards service is received in advance the invoice will be issued within 14 days from receipt of such advance. |
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| 3. |
The invoice should be serially numbered and it should contain details of service provider, receiver of service and the service provided. |
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| Manner of payment |
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| 1. |
Individuals, proprietorship or partnership concerns are required to pay this tax on quarterly basis. All other taxpayers are required to pay monthly basis. |
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| 2. |
Tax is to be paid on the value of services received during month/quarter. |
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| 3. |
Tax for a month/quarter has to be deposited by the 5th (6th in electronic payment) of the next month/month immediately at quarter. However, for the month of March/quarter ending Man required to be deposited by the 31st March. |
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| 4. |
It is to be paid on self assessment basis by the taxpayer. |
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| 5. |
It could be deposited in any of the designated banks through a challan. The list of designated banks is available http://pccacbec.nic.in/. |
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| Input stage CENVAT Credit |
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| 1. |
A service provider requires certain goods and services as in providing service to his customer. These inputs may have central excise duty or service tax, the credit of which can be taken service provider. |
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| 2. |
This credit is referred to as CENVAT Credit and it can be Utility taxpayer for payment of tax on fulfillment of certain conditions. |
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CENVAT Credit is not admissible on goods and services us providing tax free services. |
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| Availability of Forms |
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| 1. |
All Forms and challan for payment of tax could be downloaded from website of department, www.cbec.gov.in. These forms could obtained from the office of Commissioner of Service Tax/Central. |
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| Can Service tax be paid electronically ? |
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Yes, it can be paid electronically through the designated banks this facility. The list of such banks along with detailed information payment is available on www.cbec.gov.in and http://pccacbec.nic |
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| Mandatory e-payment of service tax for certain taxpayers |
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| 1. |
Any taxpayer who has paid service tax of rupees fifty lakh or above preceding year or has already paid service tax of rupees fifty lakh current year is required to pay service tax mandatorily through banking. |
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| Return |
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| 1. |
Return is to be filed twice in a year by every taxpayer. For the period April to September, return has to be filled by the 25th of October the period from October to March, it has to be filed by the 25th of is to be filed in 'Form ST-3'. |
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| Do not delay in depositing tax and filling return, because |
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| 1. |
Delay in depositing tax attracts interest @ 13% per annum. in addition, it also attracts a penalty @ Rs.200 per day of delay or 2% per month of the tax liability, which ever is high penalty could be upto the amount of service tax payable. |
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| 2. |
Delay in filling of return attracts late fee, which could extend upto Rs. 2000. |
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| CENTRAL BOARD OF EXCISE & CUSTOMS |
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| For more information visit our web-sites at www.cbec.gov.in, www.servicetax.gov.in |
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