Service tax is an indirect tax which charges or collecting from the service 
providers at certain percentage is called service tax and It is actually borne whom who consumed the service from the service providers, is also liable for payment of service tax to the Government. It is levied at 14.5% on the value of the taxable service which includes Education Cess @ 2% on the service tax amount, and Secondary and Higher Education Cess @ 1% on the service tax amount.

Once the turnover of the assesses crosses a threshold limit of Rs 9 lacs, the service provider is required to get itself registered and compulsorily required to charge service tax on services provided once the turnover crosses Rs 10 lacs. VAT (Value Added Tax) registration is compulsory for dealers having turnover exceeding Rs 5 lacs (or increased limit of Rs 10 lacs in some states). On registration, such dealer is allotted a unique 11 digit TIN (Taxpayer’s Identification Number).

Advantages:

1. Service tax reduces the cascading effect of taxes on the final price of the product. Eliminate tax-on-tax effect.
2. It is Simple, transparent, easy and reduces numbers of indirect taxes which result good administration of tax structure.
3. It increases GDP, tax-GDP ratio and revenue surplus.
4.  It will be levied only at the final destination of consumption and not at various points (from manufacturing to retail outlets). This will help in removing economic distortions and bring about development of a common national market.
5. It will reduce the tax burden for consumers.
6. It is very elastic in yield, if imposed on necessaries of life which have an inelastic demand. Indirect taxes on necessaries yield large revenue, because people must buy these things.