What is Service Tax?
Service tax, though no longer a direct tax in India (since July 2017), plays a crucial role in understanding the Goods and Services Tax (GST) regime. Service tax was essentially a tax levied on the taxable services provided by businesses. While it has been subsumed under GST, knowledge of service tax registration is still relevant for several reasons:
Who Needs Service Tax Registration?
Prior to July 2017, service tax registration was mandatory for businesses exceeding a specific threshold of annual turnover from providing taxable services. The threshold varied depending on the nature of the service and the location of the business.
Service Tax Registration Process
The service tax registration process is no longer active since it has been integrated into GST registration. However, here’s a brief overview of the previous process for informational purposes:
- Eligibility: Businesses meeting the service tax registration threshold had to apply.
- Application: The application for registration was typically filed online through the portal of the Central Board of Excise and Customs (CBEC).
- Documents Required: Documents like PAN card, address proof, bank account details, and proof of business nature were usually required.
- Registration Certificate: Upon successful application, a service tax registration certificate was issued.
Current Scenario - Service Tax and GST
- With the implementation of GST in July 2017, service tax merged with central excise duty to form a unified tax system.
- The concept of service tax registration no longer exists. Businesses providing taxable services now register under GST.
- The service component of GST functions similarly to service tax, with a focus on levying tax on the value added at each stage of service provision.