The most concerning section about Service Tax is the Service Tax Payment procedure. When it comes to Service tax, you have two options of payment i.e. you can either make the payment of Service Tax physically (manually) in the specified banks or assessee can choose the possibility of Service Tax Online Payment. The Payment of Service Tax is liable to be made on a Monthly or Quarterly basis and in the case of deposit after the Due Date of Service Tax Payment; Late Payment penalty is likely to be paid.
Service Tax Online Payment
An Assessee can make a service tax payment manually (physically) using G.A.R.-7 Form. G.A.R.-7 is a challan available in all specified branches of banks. The Taxpayer needs to fill the challan with relevant information and submit the challan in nearest branch. However, Assessee can also pay his service tax online by using the e-payment provision offered by the Central Board of Excise & Custom. For E-payment of Service Tax, internet banking account in the authorized bank is mandatory.
Online payment of Central Excise and Service Tax is available to all Retail or Corporate customers. The Assesses maintaining Accounts with the Bank can now pay online Excise and Service Tax for all Commission rates
Advantages of Online Tax Payment
- Ease of operation & convenience.
- Online Service tax payment facility is available 24X7X365 basis.
- Anyone can pay on behalf of the company or firm and others from anywhere in the country.
- No submission of physical Challan by the assessee.
- Immediate acknowledgement of tax payment in the form of Cyber Receipt.
With effect from 01/01/2014, service tax online payment has been made (as per Notification No. 16/2013) mandatory for the taxpayer who have paid more than Rs. 1 Lakh as service tax in the previous financial year.
Service Tax Payment – GAR 7 Challan
The taxpayers can make Service Tax Payment manually in a bank through the GAR-7 Challan. With effect from April 2007, the payment of service tax physically paid through the GAR-7 Challan. At the time of Payment of tax in a bank, the banker shall stamp the acknowledgement of the GAR 7 Challan with the Challan Identification Number (CIN). The GAR-7 Challan Identification Number has three parts as shown below.
- Seven Digit BSR Code of the Bank where the Service Tax is deposited.
- Challan Serial Number.
- Date of Deposit of Tax (DD/MM/YY).
CIN (Challan Identification Number) is stamped on the acknowledgement receipt to identify uniquely the tax payment. The Challan Identification Number (CIN) has to be quoted in the return of income as a proof of payment. CIN is also to be cited in any further enquiry. Therefore, you must ensure that the CIN (comprising of the above three parts) is stamped on the Challan by the Bank.
The Reserve Bank of India has already passed an order dated April 1, 2004, making it compulsory for all tax collecting branches of banks to use a rubber stamp acknowledgement that carried the CIN. A Separate CIN is given for each Challan Deposited.
GAR – 7 CHALLAN STATUS ENQUIRY
A Unique element has been launched wherein the taxpayer can track the status of the Challans deposited in the Banks. On entering the Challan Identification No. on the taxpayer can the view the following details as below.
- Date of Deposit (DD/MM/YY).
- BSR Code.
- Name of the Assessee.
- Assessee Code.
- Challan Serial Number.
- Confirmation that the amount entered is correct.
- Date of Receipt by NSDL.
E-payment of Service Tax
As the name suggests, any payment made online is called known as e-payment. For e-payment of service tax, the taxpayer should have an account(net banking) with one of the authorized banks which are mentioned in the list of banks authorised.
- Allahabad 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 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.
Online Payment of Service Tax
The following three steps will help you to know the Service Tax Online payment. Let us take a look at Service Tax Online Payment procedure here.
- Visit the official www.cbec-easiest.gov.in website.
- Click on the e-payment icon.
- Enter your 15-digit Service Tax Registration Number.
- Enter the captcha code on the NSDL website and click on enter.
- After successful verification, your details as saved in the Assesses code master will be displayed on the screen.
- Now the taxpayer can select the accounting systems for which he is filing tax and then choose the service for which tax is being paid.
- Select the education cess(as per relevant year) and click on submit.
- After successful submission of your account details, you will be prompted to choose your bank of choice.
- Select the bank, and log in to access your account Login ID and password for online banking.
- Choose the amount and carry out the transaction for service tax payment.
- After completion of the payment transaction, the page will show a confirmation receipt with Challan Identification Number(CIN) for future reference.
- In the case of the excess payment of service tax, the assessee can either get it adjusted against tax for the next financial year or can raise a refund request for the same and get it refunded.
Due dates for Service Tax Payment
Let us take a look at due dates of Online payment fo Service Tax.
Proprietary Firms and
|Quarterly as mentioned below.
(e.g. Companies, Societies, Trusts, etc.)
||By 5th of the month immediately following
the month in which payments are received
towards the value of taxable services. However,
in the month in which payments are received towards the value of taxable services.
Failure to Pay Service Tax
Every person, liable to pay the service tax under 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 at the rate of 18% per annum. Interest is payable for the period from the first day after the due date until the time of payment of any defaulted service Tax amount. Interest payments are mandatory in nature, and the same cannot be waived.
If an individual who is liable to pay Service Tax fails to pay service tax, then he shall pay in addition to such tax and interest. A penalty amount of which shall not be less than Rs.100/- for every day during which such failure continues or at the rate of 1% of such tax per month, whichever is higher. But, the penalty amount payable shall not exceed the amount of Service Tax payable.