be deposited into the government treasury . Prior to depositing the tax , the service provider can reduce the service tax paid to others , if any i . e . take credit for input tax .
All person providing taxable services should register with the central excise department of the concerned jurisdiction . Only a single registration is required even if services are provided from more than one premises , provided that the invoices are raised from one place . If invoices are raised from different premises , the registration should be obtained for each such premise where the billing is done . Even if the service provider offers more than one taxable service , multiple registration is not required . In certain cases , liability to deposit service tax to the Government also rests on the service receiver , either fully or in part ( Partial Reverse Charge Mechanism ). Besides , new Service Tax Rules to determine the service tax liability based on Place of Provision of service have also come into force .
In the case of proprietary concern or partnership firm , the service tax is required to be deposited on a quarterly basis . The payment should be made by 5th of the month following the quarter . In case of companies , the service tax is to be deposited into the government treasury on a monthly basis by 5th of the following month . In case of online deposit , service tax can be deposited by the 6th of the following month .
4.7.4 Central Sales Tax ( CST )/ Value Added Tax ( VAT )
Since April 1 , 2005 , all states in India have progressively replaced local sales tax with VAT . VAT is not much different from local sales tax regime , except that it considers tax on value addition at each level of the distribution network . The state VAT is essentially a tax on sale of goods and does not apply to services . There are five slab rates ie 0 per cent , 1 per cent , 5 per cent 12.5 per cent and 20 per cent .
VAT is levied on sale of goods within the state . If the sale is outside the state of origin , Central Sales Tax ( CST ) is levied . The standard rate of CST is 2 per cent provided both the seller and buyer are registered dealers . Else , the rate is as per VAT , as applicable in the state of the seller . CST / VAT is neither imposed on import of goods into , nor export of goods out of India .
4.7.5 Taxation of Works Contracts
The taxation of works contracts is governed through the provisions of VAT . A works contract is a composite contract involving both supply of material and labour . The tax is payable on any transfer of property in materials during the course of execution of the contract . Tax is to be deducted from the payments made to the contractor . The rate at which the tax is to be deducted varies from state to state .
4.7.6 Research & Development Cess
Research & Development Cess Act , 1986 levies a cess on all payments made by an industrial concern for imported technology . At present , the cess is levied at 5 per cent on payment towards technology imports . The R & D cess has to be deposited before the payment for technology import can be made and proof of deposit in respect of R & D cess may be submitted with the bank through whom the technology related payment is being made .
R & D cess can be deposited with any designated bank . Credit for R & D cess is available against the service tax charged on services related to intellectual property rights and technology transfers .
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