Dear V S Sudhaker

Thanks and same to you.
Since you collect ST from the clients since November 2006 and receive payment through DD or Cheque, in the covering letter your clients don't mention any details ask them to mention, it is mandatory. As you Service tax is presently payable @ 12% w.e.f. 18-4-2006 (plus education cess of 2% i.e. total 12.24%) on ‘taxable services’ i.e. those services which are specified in section 65(105) of Finance Act, 1994.
Education cess - Legally, you have to show service tax and education cess separately in invoice. You cannot just charge 12.24% as ‘service tax’. In that case, department can ask you to pay further 0.24% amount. You should also pay it by showing separate account head in TR-6 challan’, indicates appropriate code.
Secondly after collection of this 12.24 % in how many days i should pay it in the bank - can i pay all at the time of half yearly return
Rule 4A(1) of Service Tax Rules, as amended w.e.f. 1-4-2005 provides that every person providing taxable service shall issue an invoice, bill or challan within 14 days from date of completion of such taxable service or receipt of any payment towards value of the taxable service, whichever is earlier. Rule 6(1) has also been amended w.e.f. 1-4-2005 to provide for payment of service tax to credit of Central Government by 5th of following month in which payments are received towards taxable services.
Thus, service tax will be payable on advance received also w.e.f. 13th May 2005.
Thirdly you total turnover is around 4 Lakhs – since your turn over is less than Rs. 4 lakh you are exempted till you reach 4 Lakhs.
Small service providers - Small units whose turnover less than Rs. four Lakhs per annum are exempt from service tax.
Services provided by RBI exempt - Exemption firm service tax has been provided to all taxable services provided by Reserve Bank of India. (Notification No. 7/2006-ST dated 1.3.2006).
General Exemption to small service providers
The small service providers whose turnover of taxable services from one or more premises did not exceed Rs. four lakhs in previous year will be exempt from service tax in next financial year upto the turnover of Rs. 4 lakhs. The provisions are prescribed in Notification No. 6/2005-ST dated 1-3-2005.
I hope you got your reply.
Regards
Arun k mishra

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Arun K Mishra
Senior Manager (Legal & Administration) Corporate Office Gurgaon
-cum-
Factory Manager -Unit-I (Samana Bahu-Karnal)
Tilda Riceland Pvt. Limited

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