The concept of service tax(ST) was first introduced in India in 1994, its scope has gradually increased, in view of the revenue earning potential. The service tax, that is indirect tax(IDT), has become a buzzword in the taxation laws & envisaged as the tax of the future.
Applicability of the service tax: The ST is payable on all the taxable service rendered in India (except Jammu & Kashmir), whether to an Indian or foreign client. However services rendered abroad shall not attract service tax levies, as it extends only to services provided within India, however services have been classified with effect form 15.3.2005 which shall determine their taxability in case the payment is received in convertible foreign exchange(CFE). The rate of service tax is 12% ad valorem plus education cess of 3% .
· Classification of services
· Record to be maintained and invoice.
· Payment of service tax
· Adjustment of excess service tax paid
· Credit of service tax paid
· Calculation of Interest & penalty
· Notice & visit by departmental officer
· Refund of tax.
· Revision & appeal