Service sector contributes about 64% to the GDP of India. It has become an Industry by itself. In the contemporary world, development of service sector has become synonymous with the advancement of the economy.
The primary sources of revenue are direct and indirect taxes. Central excise duty is a tax on the goods produced in India whereas customs duty is the tax on imports. To augment revenue, the Central Government introduced “service tax” in the year 1994-95 by imposing tax on a few services like telephones, non-life insurance and stock-brokers.
Service tax is levied under chapter V of the Finance Act, 1994 and various rules framed thereunder.
