Service tax is imposed by Govt. of India on services provided in india,Service provider has to pay this tax to government. it includes all services except illegal /Negative services The current rate is 12.36% on gross value of the service.

Generally, the liability to pay service tax has been placed on the ‘service provider’:

  • Service tax is payable @ 12% of the ‘gross amount’ ( in specific cases partial deductions are allowed, refer section 67 of the Finance Act) charged by the service provider for providing such taxable service. The Education Cess is payable @2% of the service tax payable. The liability to pay service tax has been placed on the ‘receiver / recipient’ of the service under certain situations.( Refer section 68 of the Finance Act and Rule 2(1)(d) of Service Tax Rules, 1994) Example: Suppose the value of taxable service is Rs.100. Service tax @12% will be Rs.12 and Education Cess @2% of the Service Tax will be Rs.0.24
  • 1.3 The Table below shows the category of services which are taxable with the date of introduction of such service. The table also shows the ‘accounting heads’ for each category service, for the purpose of payment of service tax, interest / penalty and Education Cess.



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