Tuesday, September 6, 2011

What is Service tax ? what is secvice tax procedure & how to calculate ?

What is Service tax ? what is secvice tax procedure & how to calculate ?

 Service Tax is a form of indirect tax imposed on specified services called "taxable services". Service tax cannot be levied on any service which is not included in the list of taxable services. Over the past few years, service tax been expanded to cover new services. The objective behind levying service tax is to reduce the degree of intensity of taxation on manufacturing and trade without forcing the government to compromise on the revenue needs. The intention of the government is to gradually increase the list of taxable services until most services fall within the scope of service tax. For the purpose of levying service tax, the value of any taxable service should be the gross amount charged by the service provider for the service rendered by him.

Service Tax was first brought into force with effect from 1 July 1994. All service providers in India, except those in the state of Jammu and Kashmir, are required to pay a Service Tax in India. Initially only three services were brought under the net of service tax and the tax rate was 5%. Gradually more services came under the ambit of Service Tax. The rate of tax was increased from 5% to 8% w.e.f 14 May 2003. From 10 September 2004 the rate of Service Tax was enhanced to 10% from 8%. Besides this 2% education cess on the amount of Service Tax was also introduced. In the Union Budget of India for the year 2006-2007, service tax was increased from 10% to 12%. On February 24, 2009 in order to give relief to the industry reeling under the impact of economic recession, The rate of Service Tax was reduced from 12 per cent to 10 per cent.

Some of the major services that come under the ambit of Service Tax are:
Telephone
Stockbroker
General Insurance
Advertising agencies
Courier agencies
Consulting engineers
Custom house agents
Steamer agents
Clearing & forwarding agents
Air travel agents
Tour operators
Rent-a-Cab Operators
Manpower recruitment Agency
Mandap Keepers
Architects
Interior Decorators
Management Consultants
Practicing Chartered Accountants
Practicing Company Secretaries
Practicing Cost Accountants
Real Estates Agents/Consultants
Credit Rating Agencies
Private Security Agencies
Market Research Agencies
Underwriters Agencies
Scientific and technical consultancy services
Photography
Convention
Telegraph
Telex
Facsimile
Online information and database access or retrieval
Video-tape production
Sound recording
Broadcasting
Insurance auxiliary activity
Banking and other financial services
Port
Authorised Service Stations
Leased circuits Services
Auxiliary services to life insurance
Cargo handling
Storage and warehousing services
Event Management
Cable operators
Beauty parlours
Health and fitness centres
Fashion designer
Rail travel agents
Dry cleaning services
Commercial vocational institute, coaching centres and private tutorials
Technical testing and analysis (excluding health & diagnostic testing) technical inspection and certification service
Maintenance & repair services
Commission and Installation Services
Business auxiliary services, namely business promotion and Support services (excluding on information technology services)
Internet café
Franchise Services
Out door Caterer’s service
Airport Services
Transport of Goods by Air Services
Business Exhibition Services
Intellectual Property Services
Opinion Poll Services
TV or Radio Programme Services
Survey and Exploration of Minerals Services
Travel Agent's Services other than Rail and Air travel agents
Forward Contract Services
Transport of goods through pipe line or other conduit Service
Site preparation & clearance Services
Dredging Services
Survey & Mapmaking Services
Cleaning Services
Membership of Clubs & Associations
Packaging Services
Mailing list compilation & Mailing Services

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