Service Tax Registration in Chennai, Service Tax Return efile

ServiceTax efile in chennai, Tax e filing, Taxation services, Tax filing, Returns e-filing, Returns filing, VAT, Excise, Service Tax audit, Accountants firm

What is Service Tax?

Service tax is, as the name suggests, a tax on Services. It is a tax levied on the transaction of certain services (as on date most of the services has been brought under service tax purview) specified by the Central Government under the Finance Act, 1994.
It is an indirect tax (akin to Excise Duty or Sales Tax) which means that normally, the service provider pays the tax and recovers the amount from the recipient of taxable service.

Who is liable to pay service tax?

Normally, the ‘person’ who provides the taxable service on receipt of service charges is responsible for paying the Service Tax to the Government (Sec.68 (1) of the Act). However, in the following situations, the receiver of the Services is responsible for the payment of Service tax :
• Where taxable services are provided by foreign service providers with no establishment in India , the recipient of such services in India is liable to pay Service Tax,;
• For the services in relation to Insurance Auxiliary Service by an Insurance Agent , the Service Tax is to be paid by the Insurance Company
• For the taxable services provided by a Goods Transport Agency for transport of goods by road, the person who pays or is liable to pay freight is liable to pay Service Tax , if the consignor or consignee falls under any of the seven categories viz. (a) a factory (b) a company (c) a corporation (d) a society (e) a co-operative society (f) a registered dealer of excisable goods (g) a body corporate or a partnership firm
• For the taxable services provided by Mutual Fund Distributors in relation to distribution of Mutual Fund the Service Tax is to be paid by the Mutual Fund or the Asset Management Company receiving such service.

Service Tax in nutshell

•You get an exemption from service tax payments if your gross revenue has not crossed Rs.10 Lacs in a year. This is a kind of shelter for small businesses and once you have crossed Rs. 9 Lacs of turnover in a particular financial year, you should apply for the service tax registration.
•Once you receive the service tax registration, you may start charging to your customers additionally for service tax. Please note that service tax is your responsibility to pay, irrespective of whether you have charged your customer service tax additionally or not.
•Service tax exemption of Rs. 10 Lacs is based on your turnover in the previous financial year. This means if your turnover has been 10 Lacs or more in the previous financial year, you need to pay service tax on each and every rupee in the current financial year (irrespective of your current turnover).
•E.g. You started your business in FY 2005-06 and your turnover in FY 2005-06 was 5 lacs, FY2006-07 was 12 lacs, FY 2007-08 was 9 lacs, FY 2008-09 was 15 lacs and FY2009-10 was 8 lacs. This is how you shall traverse in service tax. You should register for service tax in FY FY2006-07 when you cross 9 lacs of turnover and start collecting/ paying service tax on your revenues more than 10 lacs (in the above example on 2 lacs of turnover). In FY 2007-08 you should pay service tax on complete 9 lacs. In FY 2008-09 you may choose not to pay service tax till you cross 10 lacs of turnover (please note that you should also not collect the service tax in this case till 10 lacs of turnover). In FY2009-10 you again have to pay service tax on each and every rupee (here 8 lacs).
•Currently export of services is exempted from service tax. This exemption is applicable for calculating 10 Lac limits.
•You may choose to obtain a service tax registration before crossing 10Lac specified limit. The above example helps you to understand how service tax will be applicable.
• You get a set off of service tax. This means if you have paid service tax while availing services of another company or person, then the same can be set off from your service tax payments and the balance should be deposited with the Government. Set off is applicable for related activities only and provided you have not claimed 10 lac exemption during the period.
•Service tax s are required to be filed every half year. If you have not done any business during a half year period then NIL s should be filed in time else you may have to incur penalty for late

Service Tax Registration in Chennai, Service Tax Return efile, Service Tax efile in chennai, Tax e filing

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