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It is an indirect tax. Service tax is a tax on services provided .The provisions of service tax are contained in chapter V of the Finance Act, 1994 and administered by the Central Excise Department.

Rate of Service Tax :

At present, the effective rate of Service tax is 10.36 %. The above rate comprises of Service tax @ 10 % 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.

Taxable Service :
The Act provides the list of services to which the Act applies in section 65 (105) of the Act. At present there are 106 services covered under the service tax net.

Taxable Value :
Valuation under service tax is only with reference to the valuation rules namely “Service Tax Determination of Value) Rules, 2006”.

Taxable Event In Service Tax :

When service provider receives the advance from service receiver against taxable Services.

When services are rendered by service provider.

When Services are rendered in certain cases as defined in sec 68 (2) read with rule 2(1)(d)

Tax Liability :

Taxable event happens when taxable services are rendered. Tax liability taxes place as soon as payment for service is received. The payment may be received in advance (ie) before the execution of the service or in arrears (ie) after rendering the service. If service provider receives advance payment; tax liability to pay service tax arises.

Payment Of Service Tax :

Service tax is payable only of Actual receipt of consideration. 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.

Due dates for payment of service tax

Service provider Monthly/Quarterly Due dates Due date for the March and Quarter ending March
Individuals and Firms 5th of the month following the quarter ended June, Sep, Dec. 31st March
Others 5th of the following month 31st March
In case of e-payment, due date shall be 6th of the respective month/quarter
If last date for paying tax is a public holiday, tax may be paid on the next working day.
Tax is paid through GAR - 7 challan.
Big assesses with a service tax liability of Rs. 50 lakhs and above should pay tax electronically.
Interest in case of delayed payment of service tax.
     Delay in payment of tax attracts interest at the rate of 13% p.a.
     The interest shall be payable for the period by which payment of tax is delayed.

Filling of Returns:
Returns are filed half yearly in Form ST – 3 [ Form ST – 3A for PA]. If the service provider is not able to estimate the tax amount properly, he may apply for Provisional Assessment.
(a). 25th October for the half year ending 30th September.
(b). 25th april for the half year ending 31st March.
Revised returns can be field within 90 days from the date of filling of original returns.
Nil return has be be filled even there is no tax liability and no taxable services rendered.

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