What is Service Tax? Definition, Meaning & Rates in India

Q: What is the current Service Tax Rate?

How Do I Make a ServicTaxpayers were required to pay service tax online through the ACES portal. However, service tax is no longer applicable. Instead, GST is paid based on the applicable rate for the service.e Tax Payment?

There are several types of taxes in India that can impact your finances. Understanding these taxes and their effects is essential to planning ahead, maximising your income and minimising cash outflow. While the service tax was abolished and replaced by the Goods & Services Tax (GST) in 2017, understanding it is still important. Let’s explore service tax and its impact in this article.

What is Service Tax?

Service tax was an indirect levy imposed on services offered by businesses or individuals. Governed by The Finance Act, 1994, under Section 66B, it required service providers to collect the tax from customers as part of their bill. The collected amount was then remitted to the government.

What are the Current Service Tax rates?

Service tax is no longer applicable, as it was replaced by GST in 2017. The GST system categorises goods and services under different tax slabs of 0%, 5%, 12%, 18% and 28%. The applicable rate depends on the type of product or service being provided.

FAQs on Service Tax

Who is liable to pay Service Tax?

Customers were responsible for paying service tax to the service provider, who then remitted it to the government.

What is the current Service Tax rate?

Before the service tax was abolished, the rate stood at 15%, which included a 0.5% Krishi Kalyan Cess. It was replaced by GST, which introduced multiple tax slabs. Under GST, services are now taxed at 0%, 5%, 12%, 18% or 28%, depending on the category of service.

How do I make a Service Tax payment?

Taxpayers were required to pay service tax online through the ACES portal. However, service tax is no longer applicable. Instead, GST is paid based on the applicable rate for the service.

Is Service Tax still applicable in India?

No, the service tax is no longer in effect. It was abolished on 1st July 2017 when the Goods & Services Tax (GST) was introduced. All services that were previously subject to service tax now fall under the GST regime.

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Disclaimer

Tax benefits are subject to conditions under different Sections and other provisions of the Income Tax Act, 1961. Goods and Services tax and Cesses, if any will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for more details.

COMP/DOC/Jun/2025/116/0448

Service Tax: Definition and Meaning