Charge of Service tax

As per Section 66B (Charging section) of Finance Act

there shall be levied a tax (hereinafter referred to as the service tax)

at the rate of 14%

on the value of all services,

other than those services specified in the negative list,

provided or agreed to be provided

in the taxable territory

by one person to another

and collected in such manner as may be prescribed

Important Points

  1. Service tax is levied only on Service (not on goods)
  2. Rate of Service tax is 14% on value of service

          (Note:- Till 31/05/2015,the rate was 12% and 3% cess on it., i.e.12.36%)

  1. Service tax is levied on all services except certain services which are mentioned in negative list
  2. Only service provided by one person to another is taxable,  service to own self is not taxable
  3. Only service provided in the taxable territory taxable. (Taxable territory means whole of India except Jammu and Kashmir,hence Service tax not applicable to Jammu and Kashmir)
  4. Service tax is levied on service provided or to be provided in future.(hence it is payable on advance received also)



Lets understand following terms one by one

1.Meaning of Service

2.Meaning of Taxable Territory

3. Negative List meaning


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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.