Service Tax in India
Service tax is An Indirect tax levied by Central Government of India on services provided or to be provided to the ultimate consumers. It is an indirect tax wherein the service provider collects the tax on services from service receiver and pays the same to government of India. Presently from 1 June 2016, service tax rate has been increased to consolidated rate at 15% of value of services provided or to be provided. The service tax rate now is consolidated rate as education cess and secondary higher education cess are subsumed with 2% of "Swach Bharat Cess(0.50%)" has been notified by the Government.
As per Finance Act,1994 "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". Service tax payments can be made online or offline. In case you are making payment online. Service tax returns are to be filed twice a year. In case a service provider doesn't pay tax on time then a simple interest of 18% p.a is applicable. Penalty can also be imposed of amount 100 per day. The total amount of penalty cannot increase the amount of service tax due.