What, Why, How of Service Tax


It is important to know that the government revenue majorly rely on the fund generated from the public taxation and other excise duties and royalties. The major percent of the revenue is generated from the taxes paid by public in different forms, which is deliberately utilized in the well-being of the society. The tax is generated through various means; it can be direct and indirect. Direct tax includes income tax, which constitutes the major portion of the graph, whereas indirect taxes comprises of property tax, wealth tax, penalties, tax on various bonds, shares and debentures, service tax, VAT and other associations acquired by an individual.
Moving further lets discuss service tax in a detailed way.

What is Service Tax?
It is levied by the Central Government of India on the services that are to be provided by the person who is liable to pay service tax for exercising the services provided to them. It is an indirect taxation system where the money is collected at different checkpoints and is submitted to the government. Recently, the government has raised the service tax from 14.5% making it to 15% by adding 0.5% of Swachh Bharat cess.

Its application
The tax is levied on the every individual who attain services for various providers, be it is health, medical, telecom, food and beverage, wellness and lifestyle, the tax is charged from the service receivers in order to exercise the burden of taxpaying from service provider at one stake.

Registration Process
It is mandatory to get compliance for registration as per the Service Tax Law regulated in India. An individual is eligible to pay the tax if he is a service distributor and is liable to pay service tax under Reverse Charge. They need to register themselves within 30 days from the date on which service tax was credited. Every service providers whose income exceeds to 9 lakhs in a financial year is also liable to pay the certain amount of tax to the government. But in case of service providers, whose aggregate income does not exceed to 9 lakhs in a financial year are deprived of obtaining registration.

One who has obtained the registration need to pay the value for the taxable services if it exceeds to or above 10 lakhs in a financial year.

Payments made
The payment of these taxes is done in the name of the central government regulated by the Central Board of Excise Custom. The individuals are allowed to pay their share on 5thday of every month as in case when paid through various means and 6thday of every month when paid electronically as the case may be.



An individual or service provider is responsible to submit a half yearly return to the Income Tax department. The process is followed by submitting a Form, namely ST – 3 or ST -3A together by the 25th of the desired month falling on the particular half year. Denial of submitting returns will lead to penalty eventually. A service provider also gets an opportunity to fill up the revised return form if not done properly in the first instance within 90 days from the date of submission of the tax returns.

Service tax is a kind of tax which you pay for your convenience and leisure to the government. In return, government promises to help its citizen in a most generous way. Social securities and other benefits are made flexible for the senior citizens and look forward to serve the country in best possible ways.

Author name – SHEELA JOBY

Senior editor Higrit.com, you could reach her at contact@higrit.com

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