Services TAX

  1. Overview

    Every person responsible for making payment of nature covered by TDS provisions of Income Tax Act shall be responsible to deduct tax. However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of all assesses other than individual and HUF whose accounts are not subject to Tax Audit Under Section 44AB of the Income tax Act,1961 during the preceding financial year , is required to deduct tax at source.

    As now you have registered as service provider under Service Tax Rules 1994 you are required to collect service tax from the service recipient as per the ‘Point of Taxation Rules’ diagrammatically mentioned below:

  2. Payment of Service Tax

    • Service tax is payable on accrual basis as per point of taxation rule. Where the service provider receives only a part of the total service charges, Service tax shall be paid on proportionately only on such part and not on the entire consideration. The balance service tax will have to be paid on receipt of consideration. Therefore the service tax is payable only on realized value and not on bill value.
    • Due dates for payment of service tax
    Service provider Monthly/ Quarterly Due dates Due date for the March and Quarter ending March
    Individuals and Firms 5th of the month following the quarter ended June, Sep, Dec 31st March
    Others 5th of the following month 31st March
    • In case of e- payment, due date shall be 6th of the respective month / quarter.
    • If last date for paying tax is a public holiday, tax may be paid on the next working day.
    • Tax is paid through GAR – 7 challan.
    • Big assesses with a service tax liability of Rs.10 lakhs and above should pay tax electronically.
    • Interest in case of delayed payment of service tax.

    Delay in payment of tax attracts interest at the rate of 18 % p.a. (but relief of 3% to assessee having turnover less than of Rs.60 lakhs .

    The interest shall be payable for the period by which payment of tax is delayed.

    (B) Due Dates for Filing of Service Tax Returns ( S.T 3)

    Half-yearly Due Date
    April to September 25th of October
    October to March 25th of April
  3. Consequences on failing to comply with the service tax rules

    A) Interest / penalty on failure of payment Service Tax
    • Apr to Jun 15th July
    • Jul to Sep 15th October
    • Oct to Dec 15th January
    • Jan to Mar 31th May
  4. Consequences due to non-compliance of TDS provisions

    • Interest @ 18% p.a. (15% in case of Gross amount of Services rendered is < Rs.60 Lakhs)
    • Penalty Rs.100 for every day during which failure continues, or 1% of tax per month, whichever is higher, but shall not exceed 50% of service tax due.
  5. Penalty for delay in filing Service Tax Return

    • Upto -15 days----------Rs.500
    • 15days - 20days-------Rs.1000
    • 20days - 30days-------Rs.1000+Rs.100 per day of default
    • From 31st day subject to a maximum amount of Rs 20000.

    Apart from the above penal provisions there is a provision for imprisonment up to 7 years for non-payment/ delayed payment of service tax

  6. Service Tax related Services

    • Filing of Original Returns
    • Filing of Revised Return.
    • Representation on behalf of clients with Service Tax Authorities.
    • Registrations and Renewals.
  7. Service Tax Returns filing process with us

    Step 1 : Collect service tax from the Service recipients (customers / tenants etc.)

    Step 2 : Send us the list of Invoices/receipts including service tax collected along with the payment challans. (We would be sending the template for providing the information)

    Step 3 : We would file the Service Tax Returns and send you the acknowledgement (ST 3).