Payment of Service Tax

How much do I pay?

A seller provides a service to a buyer and bills the buyer for the service. The bill is inclusive of the service tax. The seller does not have to pay service tax on the total bill amount but only on the payment received.

Example:

Here, the total service-tax turns out to be:

Assuming, the buyer pays the seller Rs.5, 000/- as part payment, the service-tax payable for the payment received is calculated as given below.

Hence, service tax is payable only on the value of payment received by the seller and not on the gross amount charged or billed (invoice value).

Another case is when advance is received Service Tax to be calculated on such advances and to be paid to the government.

Where do I pay?

The service tax amount is to be paid using Form GAR 7 in any Nationalised Commercial Bank

If your company is a corporate company, service tax is payable on a monthly basis by the 5th of the following month. For example, Service tax has to be paid by 5th January for the month of December.

Non-corporate like individuals, proprietary firms, partnership firms and so on, have to pay service tax for the fiscal quarter. The payment is to be made by the 5th day of the month following the quarter. For example, service tax for the quarter ending 30th June is to be paid by 5th July.

For the corporate and non-corporate bodies, service tax for the month of March is payable by 31st of March.

Filing returns

Corporate and non–corporate organizations have to file service tax half-yearly with details in Form ST-3 and Input Credit Form (Form 5) to the Commissionerate of Service Tax. The filing of returns should be within 5 days from the last day of the fiscal half-year. For the fiscal half-year ending-date of 30th September, the last day for filing service-tax returns is 5th October. Copies of all GAR – 7 issued during the period must be attached.