Service tax
Tax is defined as a fee paid by the individuals to the government. It is not a donation or voluntary payment but an enforced contribution to the government. Taxes are of two types they are direct and indirect taxes. Service tax is form of indirect tax applied on certain categories of persons, firms or agencies. The person who provides service is supposed to pay the service tax. For example a person who owns a movie theatre pays service tax to the government as he provides the theater service to the public. A film actor pays service tax as he provides entertainment services to everyone. The people who are liable to pay service tax should register themselves with the central Excise department. They have to register only once even if they run their services in different premises or regions but have the billing at one place.
The rate of service tax is 12% of the total income of the service provider. The service provider should pay an amount equal to 12% of the annual income. Some services which are included and defined in the taxable services are Services provided by registrar to an issue, Services provided by a Share Transfer agent, Services in relation to automated teller machine operations, maintenance or management., service provided by recovery agent, Business support services, Public relations service, Internet telephone service, Ship management service etc. Presently service tax covers 58 services.
Service tax can be paid on a quarterly basis. The tax should be paid by 25th of the month following the quarter. In case of service providers such as companies the service tax should be paid on monthly basis, it should be paid before 25th of every month.
Service tax can be paid in specified branches of designated banks which the Income tax department or you can also pay your taxes online through the payment gateway website of the tax department. The online payment of the tax is named as Electronic Federal Tax payment system which allows the user to make the payment through his credit card, debit card etc. The service provider can also make our payment through third party agents also. The agents give us assistance on the tax payments and the amount that can be payable depending on the total income of the profits of the service provider. The provider can give a check or cash to third party who will pay the tax in behalf of the customer to the government. This saves a lot of time to the customer as the agent will come to the customers place and assist them, instead of the customer going to the income tax department office or the banks to make the payment.
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