Service tax registration payment and return some basic information

This post is aiming to give you some basic knowledge that required for registration, payment and return of service tax.

Service tax was implemented in India in the year 1994. It is the tax payable by the service provider; only except some cases service receiver should pay the tax under method reverse charge; we will discuss this topic later.

When a service provider is liable to pay tax?

If you are providing a taxable service and your last year turnover is less than 10 lakh, you need not pay service tax in current financial year. Whenever you cross the limit 10 lakh your service is become taxable.

Service tax registration

You need registration immediately after the turnover crosses 9 lakhs. Or if you starting a new business and sure about annual turnover will cross 10 lakh need to register with Superintend of central excise. You should register within 30 days of commencement of business.

For registration assesse should fill and submit a form called ST1.Now this can be done through ACES website. If you are providing multiple services,mention all those in ST-1 Take a printout and approach superintend under whose jurisdiction your company falls.

Documents Required for Registration

1. PAN Card copy
2. Address Proof
3. Evidence of the constitution of the company or partnership.
4. List of Directors or partners

After verifying, your certificate of registration will be issued within seven days in the form ST-2, in which you can find your Registration number and premises code. You can also check your ST-2 online by logging in ACES site under REG menu.

The service tax code contains 15 digits, See the code explanation below.

If you are providing services from different locations you can take separate registration for each premise under the same PAN, only the last 3 digit will change serially. Also centralized registration can be avail if the assesse willing to do so. For centralized registration you must have a centralized billing or accounting system; and Centralized registration will be given by commissioner in who’s the jurisdiction the office of the centralized billing or accounting system exists.

Service tax Rate

Present rate of service tax is 10% and Education cess is 2% on service tax, and higher secondary education cess is 1% on service tax .Hence the total rate of service tax is 10.3%

Service tax payment due date

Tax should be paid on quarterly basis for sole trader, partnership etc, and monthly payment are mandatory for others. Payment should within 5^th day of the end of the month or quarter. June month or quarter of Junepayment should be paid on or before 5^th of July.  For electronic tax payers, can pay tax up to 6^th.

Service tax payment on March

There are some exemptions for the payment of March month or last quarter. Service tax of March month or quarter of March should be paid on or before 31^st March. This will create some problem for tax payers to calculate last few days tax. To solve this problem you are permitted to pay excess amount up to 50000.00 and can be adjusted in subsequent payment.

Mandatory E-Payment of service tax

Electronic payment of service tax is compulsory for those tax payers who had paid 50 lakhs or more tax in the previous year. For others it is not compulsory but can make e-payment if they are willing.

What to do if last date of service tax payment is a Public holiday?

You don’t need to worry about it; you can pay tax on next working day

Interest on late payment of service tax

Tax payer is liable to pay interest on late payment of service tax up to the period of delay. The present rate of interest is 13% per annum. Consider April month tax is paying on May 15^th. Due date is 5^th of May so you have to consider interest period from 6^th May to 14^th May i.e, 9 days interest  is to be paid.

How to pay service tax

Tax should be paid in thefilled Chelan GAR-7 signed by authorized person, submit to the authorized bank like SBI, IOB, Indian bank etc.along with the payable amount by cash or cheque. Presenting cheque on the last date of payment is sufficient and will be treated as tax paid on time if cheque is not returned. Only one copy is required for the payment of service tax by using GAR-7.The counter foil containing bank seal with IFS Code and Chelan number will be given to tax payer.Nowadays bank started to give a separate printed receipt called “EASIEST RECIPT” which gives clear information about Chelan number, Bank IFS Code etc.

Service tax Credit

Credit can be taken against input services paid and can be utilized for the payment of service tax. Input service means any service availed inrelation to your business. You can deduct the input service tax paid from payable service tax. We will provide a detailed post about cenvat credit later.

Account code for service tax payment.

For service tax payment, each service has separate account code. Likewise Interest and penalty for each service has separate account code.  Cess and interest oncess has separate account code which is commonfor all services. To make it clear refer below example chart

Filing of service tax return

Service tax return must be submitted half yearly. i.e, April to September and October to March. First half yearly return must be on or before 25^th of October and second half yearly return submitted on or before April 25^th. Return must be submitted in Form ST-3 along with the evidence of payment that is Chelan copy. Now you can submit service tax return  online through ACES website

Revised Service tax return

Revised service tax return is allowed once within ninety day of filing of return to rectify the first return.

Consequences of late filing of service tax return

Late fee and penalty chargeable for return submitted late. The late fee will be up to a maximum of Rs 2000.00, Refer the late fee payment chart below. This should be paid by you without any intimation from service tax department.

Hope that the post is a useful. Your comments on this post are invited. If you like this post you can subscribe our email newsletter; we will send you more about service tax.