Service Tax Registration (Your 7 point Cheat sheet on it)

Service Tax was first levied on 1994. Ever since it was imposed, it has been regularly revised upwards (blurring political lines!!). Having introduced at a rate of 8%, currently Service Tax is pegged at 14.5%. We will try to enumerate all the important points you need to know about Service Tax

1-    Any form of Business Registration, be it a Private Limited Company Incorporation or a LLP incorporation or One Person Company Registration are liable to collect Service Tax in case the company is offering services

2-    Even partnership firm requires Service Tax Registration if it falls under the criteria in point no 3 below

3-    If you register new company, you need not take Service Tax Registration. Service Tax is only mandatory for those business registration who does more than 10 Lacs of revenue per annum

4-    Once a client has taken Service Tax Registration, it will have to continuously keep on collecting and filing service Tax return even if their revenue gets less than 10 Lacs annually

5-    Some services are exempted from Service Tax (and are mentioned in negative list which could be found in government website)

6-    Service Tax is NOT levied on service rendered to foreign clients and revenue for which is in foreign currency (Outsourcing Industry)

7-    Service Tax collected can be credited against Service Tax Paid. For eg. if your business collects Service Tax of Rs 1000/- from clients and has paid Service Tax of Rs 600/- to vendors (it can be amount paid to your HR consultant, Telecom service provider, IRCTC tickets booked, Movie Tickets for your team etc. etc.), you have to deposit service Tax of Rs 400/- only to Government (Rs 1000 – Rs 600)

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