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Service Tax

Payment of Service Tax

  • The Service Tax amount is required to be paid in Form TR-6 challan (yellow in colour ) in the specified branches of designated banks. The list of such Banks and Branches is available in every Commissionerate of Central Excise. Different heads of accounts have been specified for different taxable service by the Govt. under which payment has to be made. While making the payment of service tax to the credit of Central Govt., head of account should be correctly and properly indicated under major and minor heads and sub-heads to avoid misclassification.
  • If the assessee is an individual or a proprietary or partnership firm, the service tax is to be paid on quarterly basis. The payment is to be made by the 25th day of the month following the quarter. For example, Service Tax for the quarter ending 30th June is to be paid by 25th July.

In respect of other categories, the tax is payable on monthly basis and is to be paid by 25th day of the succeeding month.

Important Clarifications

  • The Service Tax for a particular period is payable on the value of taxable service received in that period and not on the gross amount billed to the client.
  • For payment of service tax, specific Bank has been nominated for every Central Excise Commissionerate . If service tax amount is deposited in a branch of Bank other than nominated Bank, it amounts to non-payment of Service Tax.
  • The date of deposit of cheque is the date of payment of Service Tax. The Service Tax Rules as amended provide that it would suffice if the cheque is presented to the bank by the 25th of the month. However, if the cheque bounces, it would mean as if the tax has not been paid and the necessary penal consequences would follow.
  • Service tax is payable on all taxable services rendered in India , whether to an Indian or foreign client.
  • Services rendered abroad shall not attract service tax as the levy covers only the services provided within India.
  • The Service Tax is to be paid on the value of taxable services which is charged by an assessee . Any income tax deducted at source is included in the charged amount. Therefore, Service Tax is to be paid on the amount of income tax deducted at source also.
  • 0In case of delay in making payment of Service Tax to the Government within the prescribed or stipulated period, the interest is payable at the rate of 1.25% per month or part thereof. The interest is to be computed on the amount of Service Tax due or unpaid.
  • 0For failure to pay the Service Tax, the assessee would be required to pay a minimum penalty of Rs.100/- to Rs.200/- for every day during which the failure continues. However, the penalty shall not exceed the amount of Service Tax that the assessee failed to pay Interest is also payable at the rate of 15 percent per annum.


Service Tax is administered by the Central Excise Commissionerates working under the Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, Government of India. The unique feature of Service Tax is reliance on collection of tax, primarily through voluntary compliance.

Process for Registration

All persons providing taxable services are required to register with the Central Excise department. They would have to take only one registration even if they operate from more than one premise but have centralized billing at one place. However, if such persons do not have Centralized billing at one place, then they will have to register at each place separately. Besides, only one registration is required to be taken even if an individual provides more than one service but from the same premises.

Generally, all Commissionerates of Central Excise, have a Service Tax Cell, headed by Assistant Commissioner / Deputy Commissioner. However, in certain Commissionerates , separate Service Tax Divisions have been constituted. The work is also delegated to Central Excise Divisions in many Commissionerates . A prospective assessee of Service Tax can approach the Assistant Commissioner/Deputy Commissioner in charge of Service Tax cell of the Commissionerates or Central Excise Division for registration depending upon the arrangements made in the Commissionerate .

A prospective taxable service provider seeking registration should file an application in Form ST-1 (in duplicate) before the jurisdictional Central Excise officer / Service Tax officer within thirty days from the date of notification of the taxable service. Department is required to issue the registration certificate within 7 days of the receipt of application. In case of failure to issue registration certificate within 7 days, the registration applied for is deemed to have been granted and the assessee can carry on with his activities.

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