views
Service tax is a type of indirect tax that one is liable to pay to the government once you consume the taxable services offered by different service providers such as restaurants, cab services, hotels, travel agents, cable providers etc.
The consumer pays the service tax to the service provider while paying the bill (for example, your restaurant bill has a component of service tax). The government in turn collects the tax from the service providers.
Service tax was introduced in the year 1994. As per section 65 of the Finance Act 1994, service tax is imposed on certain services such as AC restaurants, hotels and guest houses etc. As per the new regulation, service tax is also applicable on both individual service providers and companies in India.
Service tax can be paid in two ways - cash payment (for service providers) and on accrual basis (for companies). Service tax, however, is applicable only if the value of services exceeds Rs. 10 lakh in a single financial year.
Presently, all services including declared services, other than those specified in the negative list, or otherwise exempted, provided or agreed to be provided in the taxable territory i.e. (India except the state of Jammu and Kashmir) are subjected to service tax at the rate of 14%. In addition Swacch Bharat Cess @ 0.5 is also levied.
Comments
0 comment