Service Tax

You can register for service tax online without any hassles. ACES or Automation of Central Excise and Service Tax is a software that was introduced by the central board of excise tax and customs to make taxpayers' services better. You can use it to accomplish the complete service tax registration process - registration, returns, accounts, refunds, etc.

The following are the steps involved in service tax registration:

• Visit the official website of ACES
• Select the service tax option
• You will be redirected to the registration page once you select the new user option.
• The Assessee should enter details like the name of the unit, designation, and phone number. Then he/she should submit the form.
• After submitting the form, you will receive the username and password through email within 24 hours.

You can find the service tax registration form, ST 1, online on the ACES website. The form can be downloaded once you register with ACES. The following details have to be filled in when you apply for a service tax:

• Name
• PAN (Permanent Account Number)
• Address
• Contact details of the proprietor
• Category of registrant
• Constitution of applicant

You can keep a track of the status of your submitted form online through the ACES account.

Service Tax Rules

The government has laid down a set of service tax rules for assessing and collecting service tax. There are a total of 9 rules with the exemption of 2 sub-rules. Given below is the description of each rule set down by the government:

Rule 1: Rule 1 defines the service tax rules.

Rule 2: It deals with the description of terms related to service tax. The terms include ‘act’, ‘assessment’, ‘large taxpayer’, etc.

Rule 3: It deals with the appointment of officers.

Rule 4: It deals with the registration of service tax.

Rule 5: This rule deals with records

Rule 6: It deals with the payment of service tax

Rule 7: Rule 7 contains regulations for tax returns

Rule 8: It deals with a form of appeals to the commissioner of central excise

Rule 9: This rule deals with a form of appeals to the Appellate Tribunal

Central Excise And Service Tax

The Central Excise and Service Tax is charged to all the people who take part in the production, manufacture, and/or distribution of a trade. This tax is generally revised every year when the union budget for the year comes out.

Service Tax Input Credit

Service tax input credit is used by manufacturers and adjusted against the tax to be paid on output services. There is a list of services that are included and excluded from service tax input credit.

Some of the input services included are:

• market research services
• Advertisement
• Sales promotion
• Auditing
• Accounting
• Training
• Legal services.

Some of the services excluded are:

• input services
• building construction
• architect service
• complex construction
• renting of a cab

Service Tax Return Filing Due Date Late Fee

Service tax returns are filed every six months in a financial year. It is important to keep yourself updated with the due dates since you will be penalized for not filing on time. Service taxes are submitted every month or every quarter of the year.

Penalties Under Service Tax

Failure to stick to the service tax rules and regulations leads to penalties. However, if there are valid reasons for not paying service tax on time, then you do not have to pay the penalty. The following are the penalties according to the delay in filing of return after the due date.

• For the first 15 days, the late fee is Rs. 500
• For more than 15 days but not more than 30 days, it is Rs. 1000
• For more than 30 days, it is 1000 plus 100 per day

The late fees cannot exceed 25,000

Service Tax Advance Ruling

An advance ruling is a process executed by an authority to decide a specific fact that is present in the application furnished by the applicant. This is with respect to his or her requirement towards making payments for service tax for a taxable service that has been proposed to be provided by the service provider.

There are six varied categories of individuals or entities that can apply for an advance ruling. They are as follows:

1. Any non-resident who joins with another non-resident or resident Indian for setting up a joint venture in India.

2. Any resident of India who joins with a non-resident for setting up a joint-venture in India.

3. A subsidiary Indian company that has proposed to carry out business operations within India provided the parent company of the subsidiary is a company based out of India.

4. Any joint venture that is based out in India as per the provisions laid out in Section 96A of the Finance Act, 1994.

5. An individual who is a resident Indian and who has applied for advance ruling as per the provisions laid out in the following sections of the various acts.

• Section 28H of the Customs Act
• Section 23C of the Central Excise Act
• Section 96C of the Service Tax provisions of the Finance Act, 1994

6. A resident of India who wishes to import or procure any goods or products from Singapore according to the regulations of CECA (Comprehensive Economic Co-operation Agreement).

Service Tax Exemption

Small service providers can make use of deductions on service tax provided they satisfy certain conditions. Those who provide any kind of service can avail of these exemptions irrespective of the type of service they provide. The conditions that should be met by service providers are as follows:

• Small scale service providers can claim service tax deductions up to Rs. 10 Lakhs.
• Any entity providing service to an international organization or to the United Nations can claim this deduction from service tax.
• Services offered to units of special economic zones or to special economic zone developers are exempted from tax.
• Any service that is done free of cost is exempt from service tax.
• Taxable services that cater to diplomats and their family members for official reasons and personal reasons are exempt from service tax.
• A service that was offered before it was considered to be a taxable service even if payments were made at a later date is exempt from service tax.

Service Tax Payment Due Date

The government of India has established that entities whether businesses or individuals should collect and pay service tax at the specified rate in the Act. To register for service tax is necessary for all entities that provide taxable services over Rs. 9 Lakhs per year. Those people who offer taxable services less than Rs. 10 Lakhs are exempted from paying service tax dues. Service tax payment due dates can be monthly or quarterly.

Some of the service taxes that are due every quarter are:

• Individual service tax
• Proprietorship service tax
• Partnership service tax
• Private limited company service tax
• Limited liability partnership

The one person company service tax is a monthly payment.

Service Tax Penal Provisions

What happens when entities fail to pay or make late payment of a service tax? Section 76 of the Finance Act, 1994 deals with this situation. Entities will be levied a penalty for this. It is the maximum amount out of Rs. 100 per day of delay or interest of 1% per month calculated on a daily basis.

Service Tax Refund Status

Refund of service tax can be claimed when service tax is paid in excess by the entity. As a result of adjustment or assessment, refund should be claimed within one year from the date of payment of tax.

Service Tax Accounting Codes

Any entity that has to collect and pay service tax should have a service tax accounting code. These codes are given in the service tax payment challan. The amount accumulated for various taxable services has to be mentioned for the corresponding accounting code in the GAR 7 challan. Accounting codes aid the government in tracking your service tax payments.

Conclusion

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