Service Tax Returns

Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers.

Definition : Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994.

Description : In this case, the service provider pays the tax and recovers it from the customer. Service Tax was earlier levied on a specified list of services, but in the 2012 budget, its scope was increased. Services provided by air-conditioned restaurants and short term accommodation provided by hotels, inns, etc. were also included in the list of services.

It is charged to the individual service providers on cash basis, and to companies on accrual basis. This tax is payable only when the value of services provided in a financial year is more than Rs 10 lakh. This tax is not applicable in the state of Jammu & Kashmir.


Rule 6(1) of the Service Tax Rules, 1994 specifies the time period for payment of service tax.

For individuals or proprietors or partnership firms:

  • The service tax shall be paid to the credit of the Central Government by the 5th of the month immediately following the respective quarter in which service is deemed to have been provided as per POT Rules made in this regard.
  • Where payment is made through internet banking, such e-payment can be made by 6th of the month immediately following the respective quarter. However, for the quarter ending 31st March, the due date of payment of service tax shall be 31st March.
  • As stated earlier, individuals and partnership firms whose aggregate value of taxable services provided from one or more premises is fifty lakh rupees or less in the previous financial year, the service provider shall have option to pay the service tax on receipt basis by the due dates upto `50 lakhs in the current financial year.
Mandatory e-payment of service tax
  • Under proviso to Rule 6(2), e-payment of service tax is mandatory for the assessee, who has paid service tax of rupees one lakh (cash plus Cenvat credit) and above in the preceding financial year shall be deposit the service tax liable to be paid by him electronically, through internet banking.
  • Further, notwithstanding the time of receipt of payment towards the value of services, no service tax is payable for the part or whole of the value of services, which is attributable to services provided during the period when such services were not taxable.
Returns under Service Tax:
  • Rule 7 of the Service Tax Rules, 1994 return under Service Tax is required to be filed by every assessee on half yearly basis in Form ST-3 or Form ST-3A, as the case may be, along with a copy of the Form TR- 6/GAR-7, in triplicate for the months covered in the half-yearly return.
  • Every assessee shall submit the half yearly return by the 25th of the month following the particular half-year. Every assessee is required to file return electronically. Vide Notification No. 43/2011 dt. 25th August 2011, every Assessee shall submit a half yearly return electronically.