Service tax is the tax paid to the Government for some particular services known as taxable services. The service tax has to be paid by service providers. No matter the service provider is an individual or a reputed firm. Except for Jammu & Kashmir, the service providers of every other state in India have to pay tax on the taxable services provided by them. On September 2004, education cess at a rate of 2% was also introduced. Before recession time, the tax was 12% and now that got reduced to 10%.
Under section 64 of financial act 1994, there are some procedure for registration for tax. These are:
- Application for registration: The person has to apply for registration in concerned with Superintendent of Central Excise within 30 days after service tax got imposed. If he has started his business after service tax got imposed, then application has to be made within 30 days from the date of starting of business.
- For more than one service: If the individual is about to pay for more than one taxable services, a single registration have to be filled by mentioning all the services that he renders.
- Service in more than one premise: If services are from more than one place and if any one of the services has centralized billing system then that particular service needs to be registered. If a person is rendering more than one taxable services at different places and does not have a centralized billing system, then he have to make different application for those all services located at different places.
- Inclusion of PAN numbers: Except the Stockbroker registration, the service provider has to give all details including service divisions.
- Provision of certificates: A certificate is provided to the service provider after the receipt of application. This certificate is provided within a week after application got received. If the certificate is not granted within these days, the application is again produced for judgment once again.
- New registration: If registered provider is changed then the new person has to acquire a new registration certificate. Those who fail to pay the tax will result in immediate cancellation of certificate.
- There is no limit for a formal registration.
There are rules for paying the service tax. Those are:
• The tax has to be paid for those services listed under the taxable services.
• The payment of tax can be done on or within 25th of the month after the receipt of service tax rates.
• An NRI has to pay tax through an authorized person, if he does not have any office located in India.