What is Service Tax

Service Tax

What is Service Tax
What is Service Tax
Service tax was an indirect tax levied by the government on services offered by service providers. Introduced under Section 65 of the Finance Act, 1994, service tax was on July 2017 replaced by Goods and Services Tax (GST), which subsumed the various types of indirect taxes.
Service tax was paid to the government in exchange for different services received from service providers. Though the tax was paid by service providers, it was recovered from customers who bought or availed of the taxable services. It was set, more recently, at 15% for transactions that occurred on or after June 1, 2016.
Rollout of service tax: Service tax had been introduced in Union Budget 1994, and rolled out with effect from July 1, 1994. Following this, services that were included under the service tax were increased gradually from 1994. Services provided by air-conditioned restaurants, lodging (both long and short term), guest houses and other amenities were included under the tax. Going by regulations, the tax was levied on companies as well as individual service providers. While companies paid it on the basis of accrual, individuals paid the tax via cash. However, it was paid only if the total value of the service provider by an entity exceeded Rs 1 million in a given financial year. The erstwhile state of Jammu & Kashmir was exempt from this addition to the service tax rules.
The service tax payment was made via GAR 7, which was the erstwhile TR6 Challan. Designated banks’ branches accepted the payments for service tax. Another option of making the service tax payment was through the e-payment facility.
The tax invoice would have the following:
  • Serial number
  • Name and address of the service receiver
  • Name, address and registration number of the service provider
  • Classification, description as well as taxable service value of the service that is rendered
  • Payable service tax amount to be mentioned on the invoice
Abolition of service tax: Service tax was abolished with the rollout of GST on July 1, 2017, as the new tax subsumed service tax in addition to many other indirect taxes.

Latest Updates on Service Tax

SC rules on service tax on corporate guarantees, gives pvt firm relief

4 min read Last Updated :Apr 04 2023 | 6:50 PM IST
Settlement Commission looks to raise awareness through FAQs

3 min read Last Updated :Mar 12 2023 | 10:53 PM IST
No service tax on takeaway food items sold by restaurants: CESTAT

3 min read Last Updated :Feb 17 2023 | 10:28 PM IST
GST Council meet: The Goose Point Theorem for rate rationalisation

4 min read Last Updated :Jun 30 2022 | 10:51 AM IST
Study bats for OECD multilateral approach to tax digital services

5 min read Last Updated :Oct 05 2021 | 1:30 AM IST
Pooled investment funds likely to attract service tax: Check details here

4 min read Last Updated :Aug 05 2021 | 1:53 AM IST
BS Number Wise: Tax mop up shines through fragile recovery

1 min read Last Updated :Aug 03 2021 | 10:02 PM IST
Banks may not have to pay service tax for facilitating international trade

4 min read Last Updated :Aug 08 2020 | 1:13 AM IST
DGS has to take a call on waiving detention charges

3 min read Last Updated :May 03 2020 | 10:46 PM IST
Coronavirus outbreak may delay roll-out of Vivad se Vishwas scheme

4 min read Last Updated :Mar 09 2020 | 2:05 AM IST
Panel to take decision within 60-days under tax amnesty scheme: CBIC

2 min read Last Updated :Aug 27 2019 | 1:28 AM IST
'Service tax and excise duty amnesty scheme comes into effect from Sep 1'

3 min read Last Updated :Aug 26 2019 | 11:07 PM IST
Budget impact: Tax on liquor licence fee scrapped retrospectively

4 min read Last Updated :Jul 17 2019 | 1:53 AM IST
Delhi HC agrees to hear banks' plea against service tax on minimum balance

2 min read Last Updated :Jul 08 2019 | 10:00 PM IST
Total service tax arrears rise to Rs 1.66 trillion in FY18: CAG report

2 min read Last Updated :Jul 01 2019 | 6:53 PM IST
Wide difference

Last Updated :May 31 2017 | 11:39 PM IST