Tax levying is an ancient tradition in which public used to pay a definite quantity to their masters as a share from their earnings. This tradition is somehow still in practice in the modern era which disguises as sales tax, income tax, direct tax, indirect tax and many more depending on the varying criteria. Service tax is the latest edition to them, that may be referred as, “amount surcharged on the special services utilized”.

Service tax was introduced by an amendment in the Financial Act, in the year 1994. Primarily, several services like telecom, general insurance companies, stock brokers etc. fell under the service tax. With the passage of time and rapid growth of the economy, the range of service tax widened as today several streams have been identified liable to pay the service tax for example rent a cab scheme operators, architects/interior decorators, practicing cost accountants and practicing company secretaries, management consultant, real estate agents, security and detective agencies, market research agencies and many more and still the procedure of identification is going on. However, there are several services that have been exempted from the service tax like tour operators, caterers, good transport and many others.

There has been a lot of confusion on the issue of service tax, which is quite visible by the frequent amendments and the policy changes of service tax over the years. Service tax has played a vital role in the financial boost of our country. However, govt. is trying to reduce the burdens of all the taxes including service tax by unifying all of the taxes. Hopefully, this procedure would bury all the skepticisms on the taxes and tax viabilities.

Service Tax