FILING SERVICE TAX RETURNS
Service tax is an indirect tax which is levied on the services provided by a service provider in India. It is a tax that the service provider pays and later recovers the same from the service recipient of the taxable services.
Service Tax Registration is compulsory for all service providers with a turnover of over Rs. 9 Lakh. Failure to apply would result in penalties of Rs. 5,000 or Rs. 200 per day, whichever is higher.
If you have a Service Tax Registration, you need to file your returns by October 25th (for April to September) and by April 25 (for October to March), even if you don’t have any revenues. All your Service tax dues are required to be cleared before this filing. Penalties would be levied if there is any failure to pay tax returns by the due date.
FEATURES OF SERVICE TAX
- Small scale service providers are exempted from Service tax registration that provides service of less than Rs. 10 Lacs in a year.
- Service tax registration is deemed to be guaranteed if registration of service tax is not issued within 7 days, after filing of form ST1 along with the relevant documents.
- Service tax is not applicable for services exported from India.
- Service tax return is filed twice a year. Return is required to be filed by 25th October and 25th April respectively for half-year ending 30th September and 31st march.
- Service tax will be levied at a Flat rate of 14% on the amount.
- To obtain service tax registration, a copy of PAN Card, proof of address of business and constitution of the business [Partnership deed, Incorporation Certificate, etc.,] is required.
- Service return payments must be deposited by Companies, Societies, Trust, etc., monthly. Proprietary Firms and Partnership Firms are required to make service return payments quarterly.
- Failure to apply would result in penalties of Rs. 5,000 or Rs. 200 a day, whichever is higher.
- Service Returns are filed half-yearly. Returns are to be filed twice a year on 25th October and 25th April for the half-year ending September and March respectively.
- All persons or entities liable to pay this tax or having service tax registration must file service tax return.
- The fine is Rs. 500 if the delay is up to 15 days, Rs. 1000 if the delay is up to 30 days and an additional Rs. 100 per day thereon, subject to a maximum of Rs. 20,000.
FILING SALES TAX
Value Added Tax (VAT) Registration or Taxpayer Identification Number (TIN) Registration is a tax registration required for business trading or manufacturing goods in India. Any business entity engaged in the sale of goods in India with the turnover of over Rs. 5 Lacs is mandatory to register Sales Tax. VAT is collected and represented by the state government, so every state government in India has distinct guidelines applicable for their state based on the type of goods manufactured or sold.
After registration of VAT, the producer or dealer is allotted a unique 11 digit number which will serve as the TIN Number for the business.
If you are a registered dealer, you must file VAT returns. Payment of tax has to be done before the filing of returns. E-filing of VAT returns is permitted in various states across India.
FEATURES OF SALES TAX
- VAT is a tax levied on sale of goods within the state in India. Producer and dealer should obtain VAT registration, if their annual sale is more than Rs. 5 lacs (Rs. 10 lacs in some states)
- VAT is determined and collected by state government, so each state has different VAT rules and regulations.
- VAT is not levied on goods which are exported from India.
- Payment of VAT is deposited in designated bank quarterly in case of Proprietary Firms, Partnership Firms or Limited Liability Partnership and monthly in case of another type of business entities like Companies.
- The VAT rate will depend on the type of goods being sold and the State in which the goods is being sold.
- To obtain sales tax registration, a copy of PAN Card, proof of address of business, constitution of the business
[Partnership deed, Incorporation Certificate, etc.,] and Identity Proof of Promoters is required.
- VAT Registration applies if the annual turnover of the business crosses Rs. 5 lacs in most states, though some have raised this to Rs. 10 lacs.
- VAT payments must be deposited by Proprietary Firms, LLP and Partnership Firms quarterly. Other entities are required to make VAT payment monthly.
- VAT returns are due on the 20th of every month. The VAT information must be filed on the 20th of next month.