Explain the nature of Service Tax. Define Service Provider & Service Receiver.
Answers
As per section 65 (95) of finance act , 1994 ,’sevice tax ‘ means tax leviable under the provision. Section 66 of Finance Act, 1994 is the charing section of service tax. Section 66 provides that there shall be levied a tax (service tax) @12% of the value of taxable service referred to in various clauses of section 65(105).It will be collected in a manner as may be prescribed. Though the tariff rate is 12%, the effective rate is 10% w.e.f 24-2-2009.Thus; total service tax payable is 10.30%w.e.f.24-2-2009.
Service Provider: Service Provider is only a means for depositing service tax to the credit of the Central Government. Services provider provider service to the service receiver.
Service Receiver:Service receiver is a person who receives or avail the service provided by the service provider
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