Indian govt has levied service charge on almost all the services barring a few services. The calculation of service tax post budget in year 2012 wef 01 Apr 2012 is as following:
The items of service charges in your Statement of Accounts are inclusive of Service Tax @ 12% and Education Cess @2% and Higher Secondary education cess @ 1% on Service Tax. The effective rate of tax is 12.36% and is applied on all service charges levied by the bank for Services rendered.
Now to calculate the service tax use the below service tax formula:
Total Amount on which Service Tax to be Paid @12.6%= Total Gross Receipts/112.6x100
Say if your gross receipt is say Rs 10 Lakh
Net amount on which service tax needs to be paid = 10,00000/112.6=8880.99x100=Rs 8,88099
Thus you need to pay service tax at the rate of 12.6% on the amount of Rs 8,88099 which works to Rs 1,11900 (approx)
The service tax payment is a mandatory requirement and pay it by due date else you may find paying interest @ 18% for the full month even if your payment is late by a day. Moreover if you decide not to pay the service tax by due date and pay at a later date without paying interest than you have a shock as whenever IT authorities ask for interest component they will ask it from your due date to the date till query raised.
The items of service charges in your Statement of Accounts are inclusive of Service Tax @ 12% and Education Cess @2% and Higher Secondary education cess @ 1% on Service Tax. The effective rate of tax is 12.36% and is applied on all service charges levied by the bank for Services rendered.
Now to calculate the service tax use the below service tax formula:
Total Amount on which Service Tax to be Paid @12.6%= Total Gross Receipts/112.6x100
Say if your gross receipt is say Rs 10 Lakh
Net amount on which service tax needs to be paid = 10,00000/112.6=8880.99x100=Rs 8,88099
Thus you need to pay service tax at the rate of 12.6% on the amount of Rs 8,88099 which works to Rs 1,11900 (approx)
The service tax payment is a mandatory requirement and pay it by due date else you may find paying interest @ 18% for the full month even if your payment is late by a day. Moreover if you decide not to pay the service tax by due date and pay at a later date without paying interest than you have a shock as whenever IT authorities ask for interest component they will ask it from your due date to the date till query raised.
