|Service tax is a tax charged on Indian service providers, except the State of Jammu and Kashmir. The responsibility of collecting the services taxes lies with the Central Board of Excise and Customs. The provision related to this tax was brought into force with effect from 1st July 1994. Telephone, stockbroker and general insurance are the services that were brought under the tax net in the year 1994-95.
In 1996, the Finance Act enlarged the scope of charge of Service Tax by covering three more services- advertising agencies, courier agencies and radio pager services. Many more services were later added in the service tax net. Service tax is levied at the rate of 10% on certain identified taxable services.