'Service' has been defined in clause (44) of the new section 65B and means - any activity for consideration carried out by a person for another and includes a declared service. The said definition further provides that 'Service' does not include -
Service tax is, as the name suggests, a tax on Services. It is a tax levied on the transaction of certain services specified by the Central Government under the Finance Act, 1994. It is an indirect tax (akin to Excise Duty or Sales Tax) which means that normally, the service provider pays the tax and recovers the amount from the recipient of taxable service.
Prior to 1.07.2012, Service tax was levied on specified services.
From 01.07.2012, there is a paradigm shift in the levy of service tax. The service tax has been imposed on all services other than those specified in the negative list.
Normally, the person. who provides the taxable service on receipt of service charges is responsible for paying the Service Tax to the Government. However, in the following situations, the receiver of the Services is responsible for the payment of Service tax :
From 01.06.2016 onwards, Rate of service tax is 14% + 0.5% Swatch Bharat Cess + 0.5% Krish Kalyan Cess (aggregating to 15%).
Every person who has provided a taxable service of value exceeding ₹ 9 lakhs, in the preceding financial year, is required to register with the Central Excise or Service Tax office having jurisdiction over the premises or office of such service provider. In case a recipient is liable to pay service tax he also has to obtain registration.
For registration, Form ST-1 (in duplicate) is required to be submitted before the jurisdictional Central Excise/Service Tax officer. To verify the correctness of declaration in the said form, certain documents such as copy of PAN card, proof of address of business premise(s), constitution of the business [proprietorship, firm, company, trust, institute etc.] etc. may be required by the registering authority. The copies may be self-certified by the applicant. In case of doubts in select cases, original documents may have to be presented for verification.
The Registration certificate is issued within a period of seven days from the date of submission of application ST-1 along with all relevant details/documents.
Failure of registration may attract a penalty upto Rs.10000/- or ₹ 200/- for every day during which such failure continues, whichever is higher. However, such penalty may be waived in case the assessee proves that there was reasonable cause for such failure.
Form G.A.R.7 should be used to make service tax payments. Payment of service tax may be made at the specified branches of the designated banks. Service Tax can also be paid electronically, using e-payment facility.
E-payment is mandatory for assesses who have paid service tax of Rs.10 lakhs or more including the amount paid by utilization of CENVAT credit, in the preceding financial year. However, there is no bar for other assessees to pay their tax electronically.
| Category | Frequency | Due Dates |
|---|---|---|
Individuals, Proprietary Firms & Partnership Firms | Quarterly as mentioned below -
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| Others (e.g. Companies, Societies, Trusts etc.) | Monthly | By 5th of the month immediately following the month in which payments are received towards the value of taxable services. However, in case of March, the payment should be made by 31st March. |
Every person, liable to pay the service tax in accordance with the provisions of section 68 of the Act or rules made there under, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest @18% per annum. Interest is payable for the period from the first day after the due date till the date of payment of any defaulted service Tax amount. Interest payments are mandatory in nature and the same cannot be waived.
Further, if a person who is liable to pay Service Tax fails to pay service tax, he shall pay in addition to such tax and interest, a penalty which shall not be less than Rs.100/- for every day during which such failure continues or @1% of such tax per month, whichever is higher. However, the penalty amount payable shall not exceed the amount of Service Tax payable.
ST - 3 Return - By all the registered assessee, including Input Service Distributors
ST - 3A Return - By The assessees who are making provisional assessment under rule 6(4) of the Service Tax Rules, 1994.
ST - 3 Return is required to be filed half-yearly. Return for half year ending 30th September and 31st March are required to be filed by 25th and October and 25th April, respectively.
With effect from 25th August, 2011 in terms of Notification No. 43/2011 all Service Tax returns are to be filed electronically.
| Period of Delay from the prescribed date | Penalty |
|---|---|
| 15 days | Rs.500/- |
| Beyond 15 days but not later than 30 days | Rs.1000/- |
| Beyond 30 days | Rs.1000/- plus ₹ 100/- for every day from the thirty first day till the date of furnishing the said return (not exceeding Rs.20000) |
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