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Service Tax

Service tax refers to tax collected by the government of India from certain service providers for providing certain specified taxable service.

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. It is charged at 15% (14% flat, 0.5% Swachh Bharat Cess, 0.5% Krishi Kalyan Cess).

Service tax is only liable to be paid in case the total value of the service provided during the financial year is more than 10,00,000/-

As per Service Tax Law it is mandatory for the following categories of persons obtain registration:-

  • Every person liable to pay service tax under Reverse Charge
  • An input service distributor
  • Ever provider of taxable service whose aggregate value of taxable service exceeds 9 lakhs in a financial year.

Every person mentioned above will have to get themselves registered under the service tax law within 30 days from the date of commencement of such service or business.

Whereas in case of service provider whose aggregate value of taxable service does not exceed 9 lakhs in a financial year need not required to obtain registration, where in case he has obtained registration he is liable to payment of service tax only if the value of taxable services exceeds 10 lakhs rupees.

In case of individuals and partnership firms whose aggregate value of taxable services provided from one or more premises is 50,00,000 or less in the previous financial year, the service provider shall have the option to pay tax on taxable services provided or agreed to be provided by him up to a total of 50,00,000 in the current financial year, in which payment is received.

Service Tax Return

Every person liable to pay service tax shall himself assess the tax and shall submit a half yearly return in From ST-3 or ST-3A in case of provisional assessment as the case may for the months covered in the half-yearly return. Every assessee shall submit the half yearly return by the 25th of the month following the particular half-year.

The half years for this purpose will cover:

  • 1st half year 1 April to 30 September due date for the return is 25 October.
  • 2nd half year 1 October to 31st march due date for the return is 25 April.

Late filing of Return

Where the return is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall penalty for the period of delay of as

Period of DelayAmount
Upto 15 days500
Beyond 15 days but less than 30 days1000
Beyond 30 days1000+100/- per day from the 31st day till the date of furnishing the return.

The total amount of penalty for delayed submission of return, shall not exceed 20,000/-


Rule 4A prescribes that taxable services shall be provided and input credit shall be distributed only on the basis of a bill, invoice or challan. Such bill, invoice or challan will also include documents used by service providers of banking services (such as pay-in-slip, debit credit advice etc.) and consignment note issued by goods transport agencies. Rule 4B provides for issuance of a consignment note to a customer by the service provider in respect of goods transport booking services.

Every person providing taxable service shall issue an invoice/bill/challan within 30 days (45 days in case of banking and other financial service providers) from the date of completion of such service or receipt of any amount for such taxable service.

The invoice/bill/challan signed by such person or a person authorized by him in respect of taxable service provided or agreed to be provided and such invoice, bill or, as the case may be, challan shall be serially numbered and shall contain the following, namely :-

  • the name, address and the registration number of such person;
  • the name and address of the person receiving taxable service;
  • description and value of taxable service provided or agreed to be provided; and
  • the service tax payable thereon:

In case the provider of taxable service is a banking company or a financial institution including a non-banking financial company, or any other body corporate or any other person, providing service to any person an invoice, bill or, as the case may be, challan shall include any document, by whatever name called, whether or not serially numbered, and whether or not containing address of the person receiving taxable service but containing other information as prescribed above.

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