Service Tax

The Government of India, Ministry of Finance, in the Budget 1994-95 proposed for the first time to levy a Service Tax on Telephones, Insurance and Stock Brokerage under the provisions of Finance Act. 1994 and accordingly, decided to implement the proposal for levy of Service Tax with effect from 1.7.1994. "Service Tax Rules 1994" were also framed and circulated by the Govt. Of India, Ministry of Finance, Department of Revenue, New Delhi, which came into force on the 1st July, 1994. The Service Tax has been extended to Advertising, Radio Paging & Courier services w.e.f. 1.11.96. It was further extended to 30 services upto the year 2000-2001. During 2001-2002 15 new services have been added to the Service Tax.

The existing system as applicable to the collection of Central Board of Excise & Customs (CBEC) revenue is also applicable to the Collection of Service Tax. Accordingly, the assesses except the Department of Telecommunications in relation to telephone services, deposit the collections into the authorised branches of the nominated banks under CBEC collection scheme. It is deposited through TR-6 challan by the 15th of the subsequent month. The Service Tax so collected by the assesses is credited to the Major Head "0044 - Service Tax". As for the Service Tax collected by the Director General of Posts & Telegraph, it had been decided in consultation with the Department of Telecommunications and the Finance Ministry that the Department of Telecommunication shall directly book such collections to the final head of account i.e. "0044 - Service Tax - Tax on Telephone Billing."