Service tax could be a tax imposed by the government on services offered by the sellers. It includes transportation service, hospitality, travel, and tourism, cable operators, restaurants, etc. and is included in the bill while availing the services which are further forwarded to the government by the service providers.
Many services came under the purview of service tax after the introduction of this tax in 1994 through Section 65 of the Finance Act. However, with reference to the new rules and regulations, it is applicable not only to individuals but also to companies. Service tax is either on a cash payment basis for individuals or on an accrual basis for companies, wherever the services price crosses Rs. ten lacs within the year.
Imposing of Service Tax
The
Finance Act, 1984 states all the services within the territory that are taxable as well as non-taxable called the Negative List. Apart from these lists, some services are made tax free after the publication of government notification on 20.6.2012.
Registration
The service provider can receive service tax from the customers directly but the government also collects it from the customers through the Reverse Charge Mechanism.
Through the Digital India movement, every individual and business must register for service tax online within 30 days of operation on submission of application along with relevant documents. The same is assessed and verified by the government in two days for completion of the registration process and a certificate of registration is issued.
Service Tax Online Payment
Tax-payers must submit service tax online at the government website. Individuals, proprietors and partnership firms should submit service tax on every quarter by the 6th day of the month. Whereas, companies and other service tax-payers must pay service tax before the 6th of every month.
If tax is not paid online, then the 5th of the month is the date for submission of tax.
Records
Taxpayers are bound to keep all records pertaining to service tax including online or electronically such as invoices, tax collection records, etc. for 5 years.
Returns
Taxpayers must mandatorily calculate taxable income through income tax calculator and online submit their service tax at government websites by 25th of month bi-annually. The non-payment of tax invites penalties and necessary action
The amount of tax received by the government is utilized on several welfare activities such as welfare, infrastructure, defense, etc. Rs. 407 crores were collected as service tax in 1994-95 whereas in 2015-16 it was Rs.211456 crores. This reflects a rise in service tax and service industry since past two decades across the country
