* Service Tax was introduced by the finance act 1994.
* This is an indirect Tax leived on the services provided.
* The service provider can recover the tax from the service receiver.
*The tax liability shifts to the end user.
* Service Tax is levied on the services we avail of.
* In the past few years, the list of Taxed services as well as the tax rate has expanded.
* This is especially important because all service providers simply pass on the tax to the end user.
* The service tax provider has to pay service tax at the rate of 10% plus education cess of 3% which effectively comes to 10.30%.
* Service Tax Act is administrated by the Central Excise department u/s 83 of the Finance Act.
* Provisions relating to the Service Tax do not extend to the State of Jammu & Kashmir.
* The initial exemptions limit or the threshold limit has been increased from RS 8lksd to RS 10lks with effect from 1/04/98.
* The New Services under the rate are:
1.Legal Consultancy Service.
2.Cosmetic & Plastic Surgery Service.
3.Service Provided in relation to transport of goods by rail.
4.Service Provided in relation to transport of coastal goods & goods through inland water including national waterways.
==Minimum Alternate Tax (MAT)==
* MAT is levied @15% of the adjusted book profits in case of those companies where income tax payable on the taxable income according to the normal provisions of the income Tax Act, 1961 is less than 10% of the adjusted book profits.
* Surcharge is applicable @ 10% in case of domestic companies if adjusted book profits are in excess of Rs. 1 crore.
Education cess applicable @3% on income tax (inclusive of surcharge. If any).
==Security Transaction Tax (SIT)==
*STT is levied on the value of taxable securities transactions by the purchaser and seller will pay 0.17% on sale of derivatives and 0.25% on sale of unit of an equity oriented fund to the mutual fund.
*Wealth Tax is imposed at the rate of 1% on the value of specified assets held by the tax payer in excess of the basic exemption of RS 30,00,000/-