FAQ’s on Service Tax Continued
How to pay service tax?
Form G.A.R.7 (previously known as TR6 Challan) should be used to make service tax payments. Payment of service tax may be made at the specified branches of the designated banks. The details of such banks and branches may be obtained from the nearest Central Excise Office/Service Tax Office. Service tax can also be paid electronically, using e-payment facility.
When is service tax required to be paid? (or) What is the due date for payment of service tax?
If payment is made through bank:
|In case of Individuals, Proprietary Firms & Partnership Firms||Quarterly as mentioned below – (i) For Q.E. 30th June(ii) For Q.E. 30th Sept.(iii) For Q.E. 31St Dec.(iv ) For Q.E. 31st March||– by 5th July- by 5th Oct- by 5th Jan.- by 31st March|
|Others (e.g. Companies, Societies, Trusts etc.)||Monthly||By 5th of the month immediately following the month in which payments are received towards the value of taxable services. However, in case of March, the payment should be made by 31st March.|
If service tax payment is made electronically, that is, through internet (online):
|In case of Individuals, Proprietary Firms & Partnership Firms||Quarterly as mentioned below – (i) For Q.E. 30th June(ii) For Q.E. 30th Sept.(iii) For Q.E. 31St Dec.(iv ) For Q.E. 31st March||– by 6th July- by 6th Oct- by 6th Jan.- by 31st March|
|Others (e.g. Companies, Societies, Trusts etc.)||Monthly||By 6th of the month immediately following the month in which payments are received towards the value of taxable services. However, in case of March, the payment should be made by 31st March.|
What if the due date is public holiday?
If the due date is a public holiday, then service provider may pay service tax to the government on the next working day immediately following the holiday.
What is the procedure to be followed for payment of service tax if full details are not available to assess the correct service tax liability? (or)
Under what circumstances, provisional assessment is resorted to?
If an assessee is unable to correctly calculate the actual amount of service tax payable for any particular month or quarter, as the case may be, he can make a request in writing to the Assistant / Deputy Commissioner of Central Excise, giving reasons for seeking payment of service tax on provisional assessment basis. On receipt of such request for provisional assessment, the Assistant / Deputy Commissioner of Central Excise may allow payment of service tax on provisional basis on such value of taxable service as may be specified by him in a speaking order issued to that effect.
How is the provisional assessment finalized?
In case the service tax assessee resorts to provisional assessment after following the procedure and furnishes the returns along with original return, it is the responsibility of the Assistant /Deputy Commissioner to complete the assessment after calling for, from the assessee, the relevant documents or records, as may be considered necessary by him. The order finalizing the assessment shall be passed as soon as the relevant information is received.
Can the service tax be deposited in non-designated banks?
No. For payment of service tax, specific bank has been nominated for every Central Excise/Service Tax Commissionerate. If service tax is deposited in a branch /bank other than the nominated bank / branch, it amounts to non payment of Service Tax [Rule 6(2) of the STR, 1994]. In any case, a non designated bank will not accept service tax challans. You may approach the local Service Tax Commissionerate to know the name of the nominated bank for payment of your tax dues.
Whether the payment of service tax is to be made for the billed amount or for the amount received?
Payment of service tax is to be made in following two manners. This is called as Point of Taxation.
- Service tax is to be paid on the invoice amount or the billed amount. Where invoice is not issued within a period of 14 days then the tax becomes payable on the date of such completion of the provision of the service and on the amount mentioned in the invoice. In any case issue of invoice is mandatory as per Rule 3 of Point of Taxation Rules 2011.
- Further the amount of tax to be paid in a case where the person providing the service receives a payment before 14 days, then it will be on the basis of the extent of such payment received by the service provider. For instance, whenever any advance by whatever name known is received by the service provider to the provision of taxable service, that advance will form the basis for calculating the service tax liability.
Can service tax be paid in advance, where the gross amount has not yet been received?
Yes. As per Rule 6(1A) of Service Tax Rules, 1994, service tax can be paid in advance to the credit of the central government and adjust the amount so paid against the service tax which he is liable to pay for the subsequent period. The assessee is required to intimate the details of the amount of service tax paid in advance to the jurisdictional superintendent of Central Excise/Service Tax within a period of 15 days of such payment and indicate the details of the advance payment made, and its adjustment, if any in the subsequent return to be filed under section 70 of the Act.
When payment is made by a client to an assessee after deducting his Income Tax liability under the Tax deduction at source (TDS) provision, whether the Service Tax liability of the assessee is only towards the amount actually received from that client or tax is to be paid on the amount including the income tax deducted at source also?
Service tax is to be paid on the gross value of taxable service which is charged by a Service Tax assessee for providing a taxable service. Income tax deducted at source is includible in the charged amount. Therefore, service tax is payable on the gross amount including the amount of income tax deducted at source also.
What is the interest rate applicable on delayed payment of service tax?
Delay in payment of service tax would attract penalty as follows:
- Upto 6 months of delay: 18 percent p.a.
- More than 6 months and upto 1 year: 24 percent p.a.
- More than 1 year: 30 percent p.a. beyond 1 year.
Concessional rate of 15 percent p.a. is available to tax payers whose turnover during any of the years covered under notice or preceding FY is upto Rs 60 lakhs (applicable upto first 6 months).