What is Service Tax – Registration and Filing of Service Tax Return

Service tax is imposed by the government of India on all services rendered in India except in the state of Jammu and Kashmir.

In India Service Tax is charged on all types of services except those that are specifically exempted or mentioned in the negative list.

In India, Service Tax is introduced by the then finance minister Dr. Manmohan Singh in the year 1994. It was initially started @ 5%  and slowly enhanced to 14% (with effect from 1st June 2015).

Present Service Tax Rates in India

What is service tax – How to Register and File Service Tax ReturnAt present, Service Tax is levied @ 14% on the value of all services other than those specified in the negative list or exempted by the central government.

For certain composite services we have specific abatement available which have to be deducted from the total value to arrive at the taxable amount. 14% should be calculated on the taxable portion.

Negative List of Services Tax

With effect from 1st July 2012 government has introduced a list called negative list of Service Tax. Any service comes under a negative list will not be taxable in India. Read this article to know more on the negative list

What is composite service

There can be services out of which you cannot differentiate the amount of services rendered and goods sold. For those kind of situations, its very difficult to arrive at the taxable amount.

For example; foods served at a restaurant is a taxable service in India. But, you cannot differentiate the amount you paid for the services received from the restaurant staff or the cook and the value of goods served to you. For this, abatement of 40% is available. After taking out the abatement portion on the total value charged you have to charge service tax on balance amount.

Service Tax Registration in India

All persons providing taxable service are required to get registered with the central excise department if their aggregate taxable services has exceeded 900000 rupees in a financial year.

For service tax registration, you need to apply in form ST-1 to the jurisdictional superintendent of central excise within a period of 30 days exceeding the value of taxable services of Rs. 9 lakh.

When you register, you need to specifically mention the type of service that you are going to render. After registration, if you have started providing some other taxable services then you have to intimate it to the service tax department. PAN card is a mandatory requirement for getting service tax registration number.

After filing your registration form with the department, you will be issued a registration certificate in form ST-2 within 7 days of your application if all the conditions and other requirements are fulfilled.

In case department is not able to issue certificate of service tax registration within 7 days time then the registration applied for is deemed to have been granted and the person applied for registration can carry on his business activities.

Service Tax Payment Due dates

With effect from 1st October 2011, all assesses who are registered has to compulsorily file half yearly return electronically.

If you are an individual or a partnership firm or proprietor or Limited liability partnership firm then you have to pay service tax every quarter (i.e. for the period April to June, July to September, October to December and January to March).

For each quarter you need to make payment on or before 5th of the next month immediately following the quarter for which you want to make payment. If you are paying service tax online then due date is 6th of the month immediately following the quarter.

Service tax payable for the quarter ending 31st march is to be paid on or before 31st march of the financial year.

For other category persons (i.e. other than an individual, partnership firm, proprietorship or limited liability partnership firm) it has to be paid monthly instead of quarterly payment i.e. for a month has to be paid on or before 5th of the immediately following month. For example, if you are paying for the month of January then that has to be paid on or before 5th February.

How to pay service tax online

Service tax can be paid online by using your net banking account. To pay it online you need to visit ACSE site and chose the option of “e-payment” which will take you directly to the payment link. You can fill up the form and pay your Service tax amount from your bank account.

Filing of Service Tax return

Every person who is registered and has been assigned a registration number is required to file their periodic return in form ST-3 on half yearly basis i.e. for the period April to September and for October to march. Followings are the due date for filing your return;

For the period Due date
April to September 25th October
October to March 25th of  April

Such due dates of filing are use to change from time to time based on the notifications of department. Like recently due dates for the quarter October to March 2013 has been extended till August 2013.

Service Tax forms

Service Tax Forms Description
ST-1 Application form for registration
ST-2 Certificate of registration
ST-3 Service Tax Return (original/revised)
ST-4 Form of appeal to the commissioner of central excise
ST-5 Form of appeal to the appellate tribunal
ST-6 Form of memorandum of cross-objection to the appellate tribunal
ST-7 Form of application to appellate tribunal

 

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