Finance Tax

Tips And Ideas For Service Tax

Published at 04/04/2012 20:52:04


There are countries where services are charged ;what has come to be known as service tax. This is carried out by the same organization responsible for collecting the other types of taxes in that particular country. One of the countries that is famous for taxing services is India where the Central Board of Excise and Customs collects the tax charged on service from all the states except for areas like Jammu and Kashmir.



Step 1

In India which is the main country known for collecting service tax the Minister of Finance mentioned in his budget speech that the government was intending to merge all similar taxes in to a common service and goods tax come the year 2011.Usually small service provider are not required to pay such tax. The government would progressively alter the rate of the Central Excise taxes until they were brought to a common rate.



Step 2

Countries where there is a liability to pay service tax is often placed on services providers under particular sections of the taxable services. Though this may be applied in other countries that don’t necessarily refer to it in such terms it is charged under different conditions and terms. Usually services that are required to be liable for paying the particular tax include the telecommunications services, insurance business, transport businesses especially by roads as well as most factories and companies that offer goods and services.


Step 3

Every person liable to pay service tax is supposed to make application to the relevant authorities in a specific form. This is often required to be done within 30 days from the date the service commences. Once the person is registered a copy of the identification number is issued as a card which is based on a code.



Step 4

Usually a single registration for service tax is required even in the event that the person is providing more than one taxable service, however he has to mention all the services provided in all the applications for registration provided. On the other hand the relevant offices will make suitable endorsement in the registration certificate to that effect.


Step 5

Once the party or person who had registered for paying the service tax transfer the business to another person, the person to whom the business has been transferred to has to register afresh with the same authorities in order to be liable for paying the taxes. At the same time anyone who ceases to provide the taxable services should surrender their registration certificate at once.



Any person providing services that are required to render service tax are required to issue an invoice or bill signed by him or any other person authorized by him. The invoice or bill should have a serial number with the name, registration number issued at the moment of registration and address. A description and classification of the taxable services that are provided and the taxa payable should also be indicated. Transport agencies providing services that relates to moving of goods by roads in a goods carriage are usually required to issue a consignment note to the recipient of the service.



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