1 How to pay Service Tax?

Form G.A.R.7 (previously known as TR6 Challan) should be used to make service tax payments. Payment of service tax may be made at the specified branches of the designated banks. The details of such Banks and branches may be obtained from the nearest Central Excise Office/Service Tax Office.

Service Tax can also be paid electronically, using e-payment facility. (Please refer para 3.16 to 3.25).

2. When is Service Tax required to be paid?

1. Payments through Bank:

Category Frequency Due Dates
In case of Individuals,

Proprietary Firms &

Partnership Firms

Quarterly as mentioned

below –

( i ) For Q.E. 30th June

(ii ) For Q.E. 30th Sept.

( iii ) For Q.E. 31St Dec.

( iv ) For Q.E. 31st March

– by 5th July

– by 5th Oct

– by 5th Jan.

– by 31st March

Others (e.g. Companies,

Societies, Trusts etc.)

Monthly By 5th of the month immediately following the month in which payments are received towards the value of taxable services. However, in case of March, the payment should be made by 31st March.

2. Electronic Payments through Internet:

Category Frequency Due Dates
In case of Individuals,

Proprietary Firms &

Partnership Firms

Quarterly as mentioned

below –

( i ) For Q.E. 30th June

(ii ) For Q.E. 30th Sept.

( iii ) For Q.E. 31St Dec.

( iv ) For Q.E. 31st March

– by 6th July

– by 6th Oct

– by 6th Jan.

– by 31st March

Others (e.g. Companies,

Societies, Trusts etc.)

Monthly By 6th of the month immediately following the month in which payments are received towards the value of taxable services. However, in case of March, the payment should be made by 31st March.

3. Under what circumstances, provisional assessment is resorted to? What is the procedure to be followed for payment of Service Tax if full details are not available to assess correct tax?

If an assessee is unable to correctly estimate the actual amount payable as Service Tax for any particular month or quarter, as the case may be, he may make a request in writing to the Asstt. / Dy.Commissioner of Service Tax/Central Excise as provided under Rule 6(4) of Service Tax Rules, 1994, giving reasons for seeking payment of Service Tax on provisional basis. On receipt of such request for provisional assessment, the authority may allow payment of Service Tax on provisional basis on such value of taxable service as may be specified by him. Upon finalization of such assessment, if a liability of service tax arises, the differential amount has to be paid by the assessee. If he has paid excess amount he would be entitled to refund. The provisions of the Central Excise (No.2) Rules, 2001 relating to provisional assessment (except pertaining to execution of bond), shall apply to such assessment.

The assessee requesting for provisional assessment shall file a statement giving details of the difference between the Service Tax deposited and the Service Tax liable to be paid for each month in a memorandum in Form ST-3A accompanying the half yearly return in Form ST-3.

4. How is the provisional assessment finalized ?

In case the Service Tax assessee resorts to provisional assessment after following the procedure and furnishes the returns in Form ST-3A along with Form ST-3, it is the responsibility of the Asstt./Deputy Commissioner to complete the assessment after calling for from the assessee the relevant documents or records, as may be considered necessary by him. Wherever the Asstt./Dy. Commissioner, after considering all the details/documents proposes to re-assess the Service Tax liability, the finalization of the provisional assessment would be made after providing adequate opportunity to the assessee by issuing the show cause notice and giving opportunity of being heard in person.

5. What is the head of account into which the Service Tax amount is to be paid in respect of various services?

Separate “Head of account has been p ecified for each taxable service. This must be mentioned on G.A.R. 7 (previously known as TR-6) challan for proper accounting. (See Appendix-1 of this Booklet).

6. What is GAR-7 challan? Where is it available?

GAR-7 challan is the document for payment of service tax. GAR-7 challan is available in any stationary shop selling Government forms. The format is also given on web-site www.cbec.gov.in

7. Can the Service Tax be deposited in Non-designated banks?

No. For payment of Service Tax, specific bank has been nominated for every Central Excise/Service Tax Commissionerate. If Service Tax is deposited in a Branch /Bank other than the nominated Bank / Branch, it amounts to non-payment of Service Tax [Rule 6(2) of the STR, 1994]. In any case, a non-designated bank will not accept service tax challans.

8. Whether the payment of Service Tax is to be made for the billed amount or for the amount received?

The Service Tax for a particular period is payable on the amount / value of taxable service received during that period and not on the gross amount billed to the client. If the charges for the taxable service have been received in advance prior to rendering of the services, the Service Tax is payable even if the services are yet to be provided by them [Section 67 of the Act and Rule 6(1A) of the STR, 1994].

[Please also refer to the Service Tax (Determination of Value) Rules, 2006.]

9. Can service tax be paid in advance, where the gross amount has not yet been received?

Yes. With effect from 1-3-2008, a new provision 6(1A) has been incorporated in Service Tax Rules, 1994, whereby service tax can be paid in advance to the credit of the central government and adjust the amount so paid against the service tax which he is liable to pay for the subsequent period. The assessee is required to intimate the details of the amount of service tax paid in advance to the jurisdictional superintendent of Central Excise/Service Tax within a period of 15 days of such payment. The amount shall be paid under the respective head of accounts of the taxable service he is providing.

10. Can service tax be paid by cheque?

Yes, service tax can be paid by cheque. [Rule 6(2A) of Service Tax Rules,1 994] 3.11. When paid by cheque, which date will be treated as date of payment?

The date of deposit of cheque is the date of payment of Service Tax. If the cheque is dishonoured, it would mean as if the Service Tax has not been paid and the relevant penal consequences would follow. [Rule 6(2) of the STR, 1994]

11 When payment is made by a client to an assessee after deducting his Income Tax liability under the Tax deduction at source (TDS) provision, whether the Service Tax liability of the assessee is only towards the amount actually received from that client or tax is to be paid on the amount including the Income Tax deducted at source also?

Service Tax is to be paid on the gross value of taxable service which is charged by a Service Tax assessee for providing a taxable service. Income tax deducted at source is includible in the charged amount. Therefore, service Tax is payable on the gross amount including the amount of Income Tax deducted at source also.

12 What is the interest rate applicable on delayed payment of Service Tax?

Every person, liable to pay the service tax in accordance with the provisions of section 68 of the Act or rules made thereunder, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest @13% per annum. Interest is payable for the period from the first day after the due date till the date of payment of any defaulted service Tax amount. [Refer to Section 75 of the Finance Act, 1994]

13. Can interest be waived, and by whom?

Interest payments are mandatory in nature and the same cannot be waived.

14. What are the penal consequences if the Service Tax is not paid or paid late?

If a person who is liable to pay Service Tax fails to pay service tax, he shall pay in addition to such tax and interest in accordance with the provisions of Section 75 of the Finance Act, 1994, a penalty which shall not be less than Rs.200/- for every day during which such failure continues or @2% of such tax per month, whichever is higher.

However, the penalty amount payable shall not exceed the amount of Service Tax payable. (Refer to Section 76 of the Finance Act, 1994).

15. What is e-Payment of Central Excise and Service Tax?

e-Payment is a payment made through which a Taxpayer can remit his tax dues to the Govt. (CBEC) using Internet Banking Service. It is an additional facility being offered by the banks besides conventional procedure.

16. Is E-payment of Service Tax mandatory?

Yes. E-payment is mandatory for assesses who have paid service tax of Rs.10 lakhs or more including the amount paid by utilization of CENVAT credit, in the preceding financial year.(Refer Rule 6(2) of Service Tax Rules,1994). However, there is no bar for other assessees to pay their tax electronically. In other words, other assessees may also pay their service tax through e-payment, if they choose to do so.

17. Which banks provide the facility of e-payment of Service Tax? The following banks provide e-payment facility.

Sr.

No

Name of Bank Name of Central Excise / Service Tax Commissionerate for which the Bank is authorised to collect Revenue through e-Payment
1 Union Bank of India All Commissionerates
2 State Bank of India All Commissionerates
3 Punjab National Bank All Commissionerates
4 Indian Overseas Bank All Commissionerates
5 State Bank of Travancore All Commissionerates
6 Bank of India All Commissionerates
7 Corporation Bank All Commissionerates
8 State Bank of Saurashtra All Commissionerates
9 Indian Bank All Commissionerates
10 State Bank of Patiala All Commissionerates
11 State Bank of Hyderabad All Commissionerates
12 Syndicate Bank All Commissionerates
13 State Bank of Bikaner & Jaipur All Commissionerates
14 Vijaya Bank All Commissionerates
15 State Bank of Indore All Commissionerates
16 Bank of Maharashtra All Commissionerates
17 Canara Bank All Commissionerates
18 State Bank of Mysore All Commissionerates
19 United Bank of India All Commissionerates
20 Bank of Baroda All Commissionerates
21 Axis Bank Delhi, Bangalore, Hyderabad, Mumbai
22 ICICI Bank Delhi, Chennai, Hyderabad, Mumbai
23 HDFC Bank Delhi, Bangalore, Kolkata, Mumbai
24 IDBI Bank Delhi, Chennai, Kolkata, Mumbai
25 UCO Bank All Commissionerates

More banks will be added over a period of time. You may find out the latest position on the web site of Principal Controller of Accounts http//:pccacbec.nic.in or check with the local Central Excise/Service Tax office.

18. How to get Internet banking facility of Bank?

The customers of Bank can request this facility on prescribed application forms to any bank having internet banking facility.

19. Are there any geographical restrictions on Banks?

No. Customer can effect payment from anywhere for the Commissionerate in which he is registered with, provided that particular bank is designated and authorized to collect revenue for that Commissionerate.

20. Up to what time in a day the e-Payments can be made?

e-Payment can be made 24 hours a day using Internet banking service of Bank. Payment made up to 8 pm will be accounted on the same day. However payments effected after 8 pm will only be included in next working day’s scroll by the Focal point Branch. So, to ensure timely payment, e-payment should be made latest by 8 p.m. on the due date.

21. Does the Internet banking service give any receipt/confirmation for the e- Payment?

Yes, on successful payment the Internet banking user gets a Cyber Receipt for the Tax payment, which he can save or print for his record.

22. How does the taxpayer get the regular Challan stamped and receipted by Bank?

The respective Focal Point Bank on the next working day will send the Challan copies duly receipted and stamped to the taxpayer by courier at the mailing address provided by the taxpayer.

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