Procedure for Payment of Service Tax: Online & Physical

Last Updated at: Oct 05, 2020
A person who provides a taxable service is required to mandatorily apply for service tax registration if the value of the services provided by him in a particular financial year exceeds a threshold (currently Rs 10 lakh per annum). The service tax rules allow online application for registration and payment of service tax known as ACES. ACES is also an online portal for central excise and service tax.


All those who paid a service tax of more than Rs 1 lakh in the previous financial year will be required to pay the tax using Net banking. It can be availed of only if the assessee has a bank account with Net banking facility, and the bank is among those registered for providing this facility.


Service tax collected needs to be paid to government by the fifth of the following quarter, in the case of all partnerships and proprietorships. All others need to pay the amount collected by the fifth of the following month. However, in case the payment is being made online, which is now mandatory in case you collect more than Rs. 1 lakh in service tax during the previous year, you get an extra day to make the payment (i.e. the sixth of every month). Making payment is fairly straightforward.

Online Payment
To make payment online, what is called e-payment, you must have a net banking account with one of the banks listed here (do note that some private banks may only be available in certain divisions). If you already do, simply log on to this NSDL page and enter your 15-digit service tax number. Enter the captcha code and verify your personal details, which will appear on the screen.

Register your service tax

Now tick the Service Tax accounting field. You must now simply select your industry you’re operating in (Air Travel Agency, Advertising Agency, etc), followed by the Education Cess field in the second table.

Once done, find your bank and make the payment. You will receive an acknowledgement indicating the Challan Identification Number. This is a proof, to be shown at the time of filing your returns.

Physical Payment
Payment must be made at a branch via the GAR-7 challan, which you can download here. On payment, the teller will stamp the challan identification number, which contains the serial number of the challan, the BSR code of the bank and the date of deposit. All three must be stamped to be valid while filing the return.