Service Tax Registration Guidelines for Entrepreneurs

Service Tax is simply a tax on services. As per the rules framed by the Government of India, every service provider entity has to mandatorily apply for Service Tax Registration if the value of services expected to be rendered by him in a financial year is more than Rs 9 Lakhs. However, if the value of services rendered in a financial year is less than Rs 9 lakhs, then the service tax registration is optional at the opinion of service tax payer.

The service tax came into effect in 1994 and was introduced by the then Finance Minister Dr. Manmohan Singh. All service providers in India, except those in the state of Jammu and Kashmir, are required to pay this tax.

The current service tax rate is 12%

Education Cess @ 2% and Senior and Higher Education Cess @1% are also liable to be payable on the above service tax rate of 12%. The total effective service tax rate is 12.36%. This tax is required to be deposited on a monthly or quarterly basis. It can be paid either by manually depositing in the bank or by online payment of service tax.

How To Apply For Service Tax

One can file the service tax registration application via ST-1 form and can submit online. At the time of submission users have to create an account before furnishing the details. That account would be a permanent account for all matters related to service tax. After applying for service tax registration online an assessee is need to take a print of acknowledgement slip, sign and submit the hard copy of the ST-1 form to the commissionerate with whom you are registering yourself within 24 hours. Copy of pan card, residence proof and constitution of applicant at the time of filling an application for service tax registration is needed.

As per service tax rules 1994, the superintendent shall after verification of the application either grant the Service Tax Registration Certificate (ST-2) or sent information for non-acceptance of the Registration with 7 working days. For online application Government departmental website is www.aces.gov.in

The applicant would also be allotted a 15 character Service Tax Number which he would be required to quote on all his invoices. One can chose online option also to get the registration.

Every assessee is required to submit a half yearly return in form ST-3  or ST-3A along with the copies of TR-6 challan.