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Frequently Asked Questions on Service Tax

GENERAL QUESTIONS

  What is Service Tax ? Is it an indirect tax ?

 

 

i)              Service Tax is a tax on services rendered and introduced from 1st July 1994 vide Chapter V of Finance Act, 1994.

ii)             It is an indirect tax like Central Excise and Customs duty and unlike Income Tax

iii)             It is different from Sales Tax and VAT

iv)             It is collected by Central Government through Customs, Central Excise and Service Tax Department.

 

 

Is it charged on all types of services?

 

No. At present 99 services are subjected to Service Tax.

In case, I am providing any of the specified services am I required to pay Service Tax ?

 

Yes, however, if value of taxable service provided by you is not exceeding Rs.8 lakhs for all taxable services and from all premises in previous financial year then you are entitled for exemption in the current financial year upto an aggregate value of taxable service of Rs. 8 lakhs for all taxable services and for all premises subject to certain conditions as laid down in Notification No.06/2005 dated 01.03.05 as amended by 04/2007-ST dated 01.03.2007(available at notifications).

However, any provider of taxable services whose aggregate value of taxable service for all taxable services and for all premises in a financial year exceeds Rs.7 lakhs shall make an application for registration with jurisdictional Superintendent of Service Tax/Central Excise.

 

 

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