Electronic payment of service tax made mandatory

New Delhi, Sept 21: The government has made electronic payment of service tax mandatory with effect from October 1, 2006, for certain category of service tax assessees.

''In consonance with Government's policy to increasingly use information technology to improve the operational efficiency of collection of taxes and to reduce the transaction cost, government has made electronic mode of payment of service tax obligatory for high value service tax payers,'' a release said here.

''Electronic payment of service tax is a simple, transparent, efficient and economic way of payment of tax. This will reduce human interface and compliance cost. Improvements in the banking payment system make it possible to move towards electronic mode of payment of taxes,'' the release said.

At present, 24 designated banks are enabled for electronic payment.

All service tax assessees who have paid Rs 50 lakh or more as service tax during the preceding financial year or whose payment of service tax exceeded Rs 50 lakh during the current financial year, will be required to pay service tax electronically.

The release said field officers and banks have been advised to contact the service tax assessees and extend all necessary assistance to make the transition smooth and successful. Service Tax Commissionerates have also been organising Interactive Programmes, for the benefit of the assessees, in coordination with the bankers and the officers of the Principal Chief Controller of Accounts.

Though it is mandatory for certain category of service tax assessees to make payment of service tax electronically with effect from October 1,2006, the Finance Ministry is also making concerted efforts to ensure that service tax assessees who are below the threshold limit are also being encouraged to make payment of service tax electronically.

UNI