Components of Service Tax Rates in India

An individual can pay service tax both offline and online.

• Online payment
  • For payment of service tax online go to Central Board of Excise and Customs (CBEC).
  • Select e-payment option from the tabs on the top of the page.
  • After clicking e-payment option assessee code will be asked, which will be the service tax registration number of an individual allotted by the service tax department.
  • In next step select the code for which an individual is required to pay service tax from the list. It will be available by clicking the link available in types of duty.
  • Then select the bank from the drop-down list and click on ‘proceed’.
  • After proceeding, you will be directed to a page where you must fill the corresponding amount of the codes and pay the service tax amount.
  • Upon completion, you will receive an acknowledgment for the payment.
• Offline payment

  An individual can pay service tax offline by using G.A.R. – 7 which is a challan available only in specified branches of particular banks. For paying service tax you are required to fill this challan with the required information and submit it to the bank. In return, the bank accepts the money and stamps the challan identification number.

  Offline payment involves three important parts:

  • Date of depositing tax.
  • A serial number of the challan.
  • A 7-digit BSR code of the bank in which the service tax is being deposited.

For an individual, proprietor and partnership firm, the due date for the payment of service tax is by 5th and 6th day of the month following every quarter and for trust and society due date for the payment is a 5th and 6th day of every month.

Filing of Service Tax Returns

An assessee needs to file two types of returns: ST-3 and ST-3A to file service tax. ST-3 return is to be filed by a registered assessee whereas, ST-3A is applicable for only those individuals who make a provisional assessment under rule 6(4) of the service tax rules, 1994.

ST-3 Return is filed twice in a financial year on a half yearly basis. Service tax return is filed by furnishing details for each month for which the return is to be filed. These details need to be furnished separately with form ST-3. While filing the returns assessee can take help from the instructions stated in the application form.

Calculation of Service Tax

The current service tax rate is 15% of the value of taxable services, where 0.5% is for education and SHEC Cess and 0.5% is for Swachh Bharat Abhiyan.

For example: Suppose the value of taxable services is Rs. 30,000, then the

service tax on the taxable services will be calculated in the following manner:

(14/100 x 30,000) + (0.5/100 x 30,000) + (0.5/100 x 30,000) = Rs. 4,500

Incase there is exemption of some amount, say 50%, then service tax will be calculated on the remaining 50% i.e. Rs. 15,000.

(14/100 x 15,000) + (0.5/100 x 15,000) + (0.5/100 x 15,000) = Rs. 2,250.

Procedure for Registering for Service Tax Online

It is compulsory for all service providers to register themselves based on the rules and regulations laid by the government of India. In case the value of services provided by the service provider exceeds Rs. 9,00,000 in a single financial year then it’s compulsory for him/her to register but if the value of services provided is less than Rs. 9,00,000 then service taxpayer has an option to either register or not.

There are various documents required for registering service tax online:

• A copy of PAN (Permanent Account Number).
• One Identity proof and a photograph of the individual filing the application.
• Details of the primary bank account like account number, IFSC.
• Getting authorization by the proprietor/partners/board of directors.
• List of directors, memorandum of association or articles.
• Rent agreement, proof of ownership or allotment letter from the government for establishing possession of the premises to be registered, no objection letter from the legal owner.
• Business transaction numbers assigned from agencies or government departments like company index number, central sales tax number, import export code, a custom registration number which are issued before filing the application for registration of service tax.

Effect of Service Tax on New Property

Service tax is charged by the central government on construction services provided by builders or real estate developers. Service tax is charged only on the construction cost incurred. There is a reduction of 70% for services like the construction of the complex building, civil structure etc. under the fulfillment of existing conditions. According to this, 4.5% of service tax is charged on residential properties.

Service tax is applicable only on the purchase of the property directly from the contractors. Service tax will not be applicable in case the resold property is purchased. Service tax will be charged on the whole amount on the costs like floor rise charges, preferred location charges, initial maintenance charges etc.

Exemptions Under Service Tax

Usually, service tax is paid on all services except on the services included in the negative list of services./

Major exemptions are listed below:

• An individual service provider can avail exemption on service tax if taxable services provided by him/her are not more than Rs. 9,00,000 per annum.
• Services provided to the United Nations and international organization.
• Services provided by the developer of the special economic zone or a unit of special economic zone.
• Service tax is not applicable on services like port services, goods transport services etc.
• Service tax is not applicable to the officers who are on a diplomatic mission.