Service Tax was introduced in India by the Finance Act 1994. Service tax is the tax charged and collected by the government of India from specified service providers rendering certain specified services mentioned under section 65 of the Act. The service provider collects it as a separate charge from service receiver. The most common service tax that service receiver are familiar with is in restaurant and hotel bills.

2. What is Service Tax?
• Service Tax was introduced in India by the Finance Act 1994.
• Service tax is the tax charged and collected by the government
of India from specified service providers rendering certain
specified services mentioned under section 65 of the Act.
• The service provider collects it as a separate charge from
service receiver.
• The most common service tax that service receiver are familiar
with is in restaurant and hotel bills.
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3. Important Rules Of Service Tax
• Every service provider who is required to pay service tax shall be
required to get registration.
• Every service provider offering taxable services is required to issue
a proper invoice.
• Serial number
• Name, address and registration number of the service provider
• Name and address of the service recipient
• Amount charged for the service provided
• Amount of service tax to be paid.
• Companies, society and trusts need to pay service tax on monthly
basis.
• Individual service providers have pay tax on cash basis and
Companies have to pay it on accrual basis.
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4. Returns to be filed
• Due Date: Service tax assessee is required to submit half
yearly returns and the due date is 25th of the month.
• Forms for Return: The return is submitted in Form ST-3 or
ST-3A along with a copy of Form TR-6 filled in triplicate. It
should be accompanied by a GAR-7 Challan which is
available in specified branches of nationalised banks. The
return can be filled and submitted in the same bank branch.
• Return for revision: In case of mistake or any omission,
revised return can be furnished in Form ST-3 within 90 days
from the date of original submission of Return.
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5. • In case of failure to furnish
return by due date, an
amount of Rs. 500 shall be
charged as penalty in case
the delay is under 15 days.
• Delay beyond 15 days
attracts a penalty of Rs.
1000 and any further delay
after 30 days, the assessee
shall be liable to pay Rs.
100 for every month until
the return is furnished.
• Rate of service tax are
decided in the Union budget
and stands at 14%.
• But it includes Education
Cess and Secondary and
Higher Education Cess in it.
Apart from these cess,
“Swachh Bharat Cess” at
2% on all or select taxable
services in India is also
being charged.
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Penalties in case
of Default
Rate of
Service Tax

6. Steps To File Returns And Make
Payment Online
1. Register with ACES (Automation Central Excise and Service
Tax) on Central Board of Excise and Custom website.
2. The site will send a user ID and password to log on.
3. Click on Form ST-1 and fill it up online by putting
information requested.
4. The e-payment is to be made through internet banking by
choosing your bank.
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7. Exemptions Under Service Tax Act
• A small scale or individual service provider provided the total
turnover of taxable services does not go beyond Rs. 10 lakhs in a
financial year.
• The recipients, if there is written proof indicating the value of the
goods and materials. Further there should be proof that no credit of
duty is paid on such goods and materials.
• Service tax is not applicable to the services provided to officers of
diplomatic missions and their dependants.
• Services provided to international organizations and the United
Nations are not taxable.
• Port services, goods transport services and containerised transport
services received by an exporter and used for export of goods are
not taxable.
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8. Conclusion
• This was the complete guide on Service Tax in India.
• For more detailed information you can refer to the finance Act
and consult a tax consultant by visiting Letzbank.
• We have tie up with cleartax where one can hire Chartered
Accountant and tax consultants for various tax related needs.
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9. Contact Us
Letzbank,
Plot No. 4,, 1-98/8/9/A, Image Gardens Rd,
Madhapur,
500081 Hyderabad, Telangana,
India.
040-48586878
support@letzbank.com
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