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How to save service tax in India |
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Service tax is levied on specific services that are provided by a certain class of people, firm or agencies. Service tax is mandatory for service providers with annual revenue of 8 lakhs or more. |
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| Author: Yash Saxena |
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A service tax assessee has to file the service tax every half year in Form ST-3 or ST-3a addressed to the Superintendent of the Central Excise. The service tax return needs to be filed within 25 days from the last day of the half year. However, if a service provider does not provide any service for the half year, no service tax needs to be paid.
The service provider is liable to pay the Service Tax on cost of the service that is realized from clients. This tax is to be paid on the value of the services that is received in a specific month or quarter and not on the gross amount that has been billed to the client. However, where the amount received is less than the gross amount that has been billed to the client, the assessee has to rectify the existing bill or issue a bill showing the change in the billed amount. However, if the assessee fails to do so, he is liable to service tax on the amount billed to the client for the services provided.
For failure of payment of service tax, the assessee is liable to pay a minimum penalty of Rs.100/- to Rs 200/- per day. This amount of penalty is decided by the Central Excise officer and would be to the maximum of the amount of service tax that has not been paid.
Service tax cannot be avoided if your annual revenue exceeds 8 lakhs. If your revenue is less than that, service tax is not levied. If you have not rendered any services in a tax span, then also you would not be required to pay any service tax.
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