An individual or business that provides a service deemed taxable has to pay service tax to the government of India. This stands at 14% and has to be made over a regular period. There are specific deadlines for individuals and proprietorships.
Note: Service Tax has been replaced by the Goods and Services Tax (GST) starting 1 July 2017.
Service tax is required to be paid to the government by all individuals and businesses that provide any kind of service that may be deemed taxable. If any of these individuals or businesses are found to provide these services beyond a value of Rs 9 lakhs on an annual basis, service tax registration is absolutely compulsory. At present, the rate of service tax charged stands at 14%. The payment of this tax has to be made over regular period, and is to be collected and remitted to the Central Government prior to the expiration of the payment deadline.
The deadline for the payment of service tax differs from entity to entity. These deadlines are prescribed in accordance with Rule 6 of the Service Tax Rules 1994 and are to be made either on a monthly basis or a quarterly basis, depending on the type of entity making the payment.
Individuals:
All individuals who provide services that are deemed to be taxable, with a value found to be more than Rs 9 lakhs over the course of a financial year, are required to make payment of service tax on a quarterly basis. The due dates for service tax payment made by these individuals differs depending on the mode of payment chosen.
Proprietorship:
Any proprietorship that provides services that are deemed to be taxable, with a value found to be more than Rs 9 lakhs over the course of a financial year, are required to make payment of service tax on a quarterly basis. The due dates for service tax payment made by proprietorships differs depending on the mode of payment chosen.
Partnership Firm:
Any partnership firm that provides services that are deemed to be taxable, with a value found to be more than Rs 9 lakhs over the course of a financial year, are required to make payment of service tax on a quarterly basis. The due dates for service tax payment made by partnership firms differs depending on the mode of payment chosen.
Private Limited Company:
Any private limited company that provides services that are deemed to be taxable, with a value found to be more than Rs 9 lakhs over the course of a financial year, are required to make payment of service tax on a monthly basis. The due dates for service tax payment made by private limited companies differs depending on the mode of payment chosen.
Limited Liability Partnership (LLP):
Any Limited Liability Partnership that provides services that are deemed to be taxable, with a value found to be more than Rs 9 lakhs over the course of a financial year, are required to make payment of service tax on a monthly basis. The due dates for service tax payment made by Limited Liability Partnerships differs depending on the mode of payment chosen.
One Person Company (OPC):
Any One Person Company that provides services that are deemed to be taxable, with a value found to be more than Rs 9 lakhs over the course of a financial year, are required to make payment of service tax on a monthly basis. The due dates for service tax payment made by One Person Companies differs depending on the mode of payment chosen.
Failure to pay service tax to the Central Government before the expiration of the relevant due date will attract a penalty in the form of simple interest on the amount to be paid.
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