How to Deposit Service Tax

From 1st October 2014, it has become mandatory to deposit service tax through internet banking. Prior to the requirement for compulsory e-payment, payments were made through

Compulsory E-Payment of Service Tax

The requirement for compulsory e-payment of service tax has been introduced gradually by the service tax department. Initially, the service tax department required those paying Rs.50 lakh or more in service tax to make e-payments. This threshold was then reduced to Rs.10 lakhs in 1-4-2010 and then to Rs.1 lakh in 1-1-2014. Finally, the provisions have been changed and all service tax payments are now required to be made electronically through internet banking facilities from 1-10-2014.

Depositing Service Tax

To deposit service tax, the assessee must first open an internet banking account with one of the banks authorized by the service tax department. Currently, the following banks are authorized to handle service tax payments:

Allahabad Bank
Andhra Bank
AXIS Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
HDFC Bank
ICICI Bank
IDBI Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab & Sind Bank
Punjab National Bank
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank

Once an account is opened, the service tax assessees can access the ACES website and click on the e-payment link to begin the process for depositing service tax. To deposit service tax, the assessee should select the option to pay service tax, complete the online challan and authorise payment by way of debit to the bank account. On successful payment, a copy of the acknowledgement and challans are generated for the records of the service tax assessee.

More on Service Tax

Service Tax Registration is a tax registration required for businesses providing services in India. Service tax registration is an indirect tax wherein the service provider pays the tax and recovers the same from the recipient of the taxable service. At present, Service Tax is levied at 12.3% on the value of the taxable service. This includes Education Cess @ 2% on the service tax amount, and Secondary and Higher Education Cess @ 1% on the service tax amount. Service Tax registration is mandatory for every person or business in India that has provided a taxable service of value exceeding Rs.9 lakhs, in the previous financial year. Service Tax Registration is required for the identification of the assessee, deposit service tax, file service tax returns and undertakes various processes required under the Finance Act, 1994. Failure to obtain service tax registration would attract penalty in terms of Section 77 of the Finance Act, 1994.