India taxation guide | Updated October 2026

Service Tax in India: Legacy Law and GST on Services

Service tax was a central indirect tax on specified taxable services in India. For most services, it was subsumed into Goods and Services Tax (GST) from 1 July 2017. Understanding the distinction is essential when dealing with current invoices and returns or resolving disputes relating to earlier periods.

Important: The historical service tax payment dates and half-yearly return deadlines below are not current GST deadlines. Legacy service tax liabilities, refunds, investigations and appeals may still arise under the saved provisions of the former law.

What was service tax in India?

Service tax was imposed under Chapter V of the Finance Act, 1994. Under the negative-list framework introduced in 2012, section 66B provided for the levy of service tax on taxable services, subject to applicable exclusions and exemptions. Section 65B contained relevant definitions, while section 68 addressed payment of service tax. The Service Tax Rules, 1994 prescribed operational requirements.

With GST introduced on 1 July 2017, the central service tax levy was replaced for most ongoing service supplies by GST under the Central Goods and Services Tax Act, 2017 (CGST Act), the Integrated Goods and Services Tax Act, 2017 (IGST Act), and corresponding State or Union Territory GST legislation. Section 174 of the CGST Act contains repeal and saving provisions relevant to earlier liabilities and proceedings.

Payment of service tax under the former regime

Under section 68 of the Finance Act, 1994, the service provider generally paid service tax. In notified cases, the recipient or another prescribed person was responsible under the reverse-charge mechanism. The tax treatment of advances and the applicable point of taxation depended on the rules in force for the relevant period.

Historically, Rule 6 of the Service Tax Rules, 1994 governed payment, including differing periodicity for certain classes of assessees. The earlier GAR-7 challan and later electronic payment arrangements were part of the pre-GST framework. Deadlines varied over time: older provisions included payment by the fifth or sixth day of the following month or quarter, with special March deadlines. These dates should be checked against the exact rules and notifications applicable to the disputed tax period rather than treated as universal deadlines.

Former service tax return filing

Under Rule 7 of the Service Tax Rules, 1994, service tax returns were generally furnished in Form ST-3 on a half-yearly basis. The traditional filing dates were 25 October for April to September and 25 April for October to March, subject to amendments, extensions and transitional arrangements. These are historical dates; ST-3 is not the regular return for services supplied under GST today.

Who pays GST on services now?

Under section 9 of the CGST Act and section 5 of the IGST Act, GST applies to taxable supplies as prescribed by law. The supplier ordinarily accounts for tax, but notified categories are subject to reverse charge, where the recipient is liable. The place of supply and the location of the supplier determine whether CGST and SGST/UTGST or IGST applies.

Registration: Section 22 of the CGST Act establishes the general registration threshold, subject to special provisions, exemptions and compulsory registration under section 24.
Time of supply: Section 13 governs when tax becomes payable on services, including rules relating to receipt of payment and invoices.
Value of supply: Section 15 governs valuation, subject to applicable rules.
Payment: Section 49 covers payment through the electronic cash and credit ledgers, subject to applicable restrictions and rules.
Input tax credit: Section 16 specifies eligibility and conditions for credit, with restrictions under section 17.

Rates and exemptions depend on the classification of the particular service and current notifications. Refer to the CBIC GST portal for statutory material and notifications.

GST return filing and compliance

GST-registered service providers may be required to file outward-supply details in GSTR-1 and a summary return with payment in GSTR-3B, subject to the applicable scheme and filing frequency. Sections 37 and 39 of the CGST Act address these obligations. Certain eligible taxpayers may use the quarterly return and monthly payment (QRMP) scheme. Due dates, extensions and special filing requirements should be verified for each return period on the official GST portal.

Businesses should maintain tax invoices and records under sections 31 and 35, reconcile outward supplies and input tax credit, and monitor notices and assessments. Late fees and interest may apply under sections 47 and 50, respectively, where relevant.

Legacy service tax assessments, demands and appeals

Although service tax is no longer the ordinary levy on new service supplies, past-period issues can remain relevant. These may include unpaid tax, credit disputes, refunds, adjudication, appeals and recovery proceedings. The repeal and saving provisions of section 174 of the CGST Act, 2017 preserve specified rights, liabilities and proceedings arising under repealed laws.

For a historical demand, identify the taxable period, statutory provisions then in force, applicable exemptions, limitation rules, relevant notices and available appeal procedures. Current GST forms and deadlines should not be substituted for the procedures governing a legacy dispute.

Official government resources

GST Common Portal - registration, returns, payment and taxpayer services.
Central Board of Indirect Taxes and Customs: GST - Acts, rules, notifications and circulars.
Central Board of Indirect Taxes and Customs - central indirect tax administration and legacy information.
India Code - official central legislation, including the CGST Act and Finance Act, 1994.

Professional assistance with indirect tax compliance

Service tax and GST matters can involve detailed documentation, return preparation, payment reconciliation, classification, reverse-charge analysis, notices and litigation. Professional assistance can help businesses review historical service tax records and meet current GST compliance requirements. For enquiries, contact Contact@businesswonder.com.

This article provides general information, not case-specific legal or tax advice. Always check the relevant law, notifications and portal instructions for the period and transaction concerned.