Service Tax Registration

 

Service Tax Registration

Service tax is levied under the Finance Act, 1994 on specified services as specified by the Government. Service tax is a tax on services offered in India. The service provider (a restaurant or tour operator, for example) pays the tax and recovers the amount from their clients.

To pay this tax, the service provider needs to be registered with the Central Government if the preceding financial year's turnover is above Rs. 9 lakhs. However, collection needs to begin, at the rate of 15% (Updated), only when the turnover of the business exceeds Rs. 10 lakhs. When you cross this mark, you should always collect the tax even if your turnover is much less than this in subsequent years. Failure to apply would appeal to penalties of Rs. 5,000 or Rs. 200 a day.

 

WHAT YOU NEED TO KNOW

Service Tax Return Filing and Payments

Service Tax Return Form ST-3 needs to be filed twice in a year. Return for half yr ending 30th September and 31st March are needed to be filed by 25th October and 25th April, respectively. Service Tax Payments need to be deposited in designated banking institutions quarterly.

No Service Tax on Exports

For services exported from India, service tax is not applicable for that reasons, exporters of services are not necessary to pay service tax. However, it is recommended for service exporters to obtain service tax registration.