Service tax and education cess must be separate on an invoice

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: Is it necessary to separately show the amount of service tax, education cess and higher education cess or can we just indicate the effective service tax rate—inclusive of the various components, of 12.36% on an invoice raised for providing taxable services?

Technically, the amount of service tax, education cess and higher education cess should be separately shown on the invoice of a service provider. This requirement has also been clarified in a recent circular on service tax by the service tax authorities, for purposes of cenvat credit availment. Therefore, it is preferable that the amount of service tax, education cess and secondary and higher education cess is separately shown on invoices.

If it is not possible for you to indicate the breakup of the service tax, education cess and secondary and higher education cess amounts separately on your invoices, then you can mention on your invoices that the rate reflects the effective service tax rate of 12.36% which is inclusive of education cess at 2% of service tax and secondary and higher education cess at 1% of service tax.

We are engaged in providing security agency services and are registered with the service tax authorities under the taxable service category of ‘security agency services’. We have been charging service tax and education cess along with secondary and higher education cess from our customers on the gross value recovered for the provision of such services. We regularly deposit service tax charged from our customers. We want to know that is there a separate accounting code for secondary and higher education cess.

Yes, the service tax authorities have recently notified a separate accounting code for secondary and higher education cess. The accounting code for this cess is ‘00440426’. You need to separately mention the respective accounting codes for security agency services, education cess and secondary and higher education cess while depositing your monthly service tax liability.

We are a company engaged in providing consulting services. We are registered as management consultants and are depositing service tax. Recently, we provided advice to a SEZ unit. Please advice whether our services will be chargeable to service tax.