Electronic payment which is also popularly known as E-payment is an additional mode of paying Service Tax to the Government apart from the conventional methods offered by the banks to their customers.

This scheme facilitates assessee by using the concept of “anytime anywhere” i.e. to say the payment of tax can be made by any assessee who may be outside location which may not be nearer to his Bank(Branch), payment can be made through this facility even after normal banking  hours. Such flexibility was not available in conventional method of Tax Payment.

E-Tax Payment is made Mandatory w.e.f. from 01-10-2006 for the assessee who has “paid” Service Tax of Rs. 10 Lakh or more in the current financial year or the previous financial year. Here for considering limit of Rs. 10 Lakh “paid” includes payment through CASH as well as CENVAT Credit. ( Service Tax Circular No.  88/06/2006-ST. Dated, 6th November, 2006) (Notification No. 1/2010-Service Tax 19.02.2010)
Certain doubts have also been raised as regards the interpretation of qualifying amount of Service Tax of Rs 10 lakh paid by the assessee,
More than one premises :- For a person providing taxable service from more than one premises, where each such premises is separately registered with the department for payment of Service Tax, the criterion of Rs 10 lakh would apply to each registered premises individually, as each registered premises is separately an assessee in terms of law.
Person is paying Service Tax for both Providing as well as receiving taxable service :- If a person pays Service Tax from a registered premises for both the taxable services provided by him and the taxable service received by him on which he is liable to pay Service Tax, the cumulative Service Tax paid, i.e., Service Tax paid on taxable service provided from and Service Tax paid on taxable service received in such registered premises would be taken into account for the purposes of satisfaction of criterion of payment of Service Tax amount of Rs 10 lakh.  E.g. A person providing taxable service as well as receiving Goods Transport Agency(GTA)  Services  then for considering Rs. 10 Lakh criterion total of taxable services provided as well as GTA services received should be considered. 

Ease of operation and convenience.

Facility is available 24x7.

No queue and waiting.

On line filling of single challan.

Minimum fields of the challan need to be filled. Most of the fields are populated automatically.

Selection of tax type is from drop-down menu.

Instant Cyber receipt with banks transaction number becomes available.

This is a 24x7 facility. It is operated through a system known as OLTAS (On Line Tax Assessment System)

All payments effected up to 8 p.m. will be accounted for the day as that day’s receipt.

For taxpayers who opt to maintain account with the concerned bank and willing to use Internet banking facility: 

1.  Taxpayer logs on to the bank’s web site.

2.  The bank’s site allows the taxpayer to enter into the secure banking area after verifying the user ID and password provided to the taxpayer by the bank;

3.  Once in the secure banking area of the bank, the tax payer can select the “Pay Tax” menu which will further offer option to select various taxes he can pay on-line;

4.  Once opted for CBEC (Indirect Tax), the taxpayer is guided to the challan form for filling up the details;

5.  There will be an on-line validation for Assessee Code, Location Code, Account Head against the masters provided to the bank from the concerned Pay and Accounts Office.  The validation is mandatory and only successful entrants will be allowed to proceed further;

6.  Banks will obtain and keep only such Assessee Codes, in their master, which belongs to the assessee who falls under the Commissionerates for which the bank is authorized to collect Indirect Tax revenue.  This will ensure that the bank is not collecting and accounting indirect tax revenue for a Commissionerate for which it is not authorized;

7.  On successful validation of the details in the challan format, the taxpayer is guided to a ‘make payment screen’ showing the payment details filled in by the taxpayer on the challan format;

8.  The taxpayer gets an option to “Continue” or “Cancel”;

9.  On selecting “Cancel”, the taxpayer is prompt for entering his user ID and password to enter into the bank’s e-transaction module;

10. On selecting “continue”, the taxpayer is prompt for entering his user ID and password to enter into the bank’s transaction module;

11. This screen further leads the taxpayer to the page describing his account details with the bank;

12. Taxpayer selects the account to be debited;

13. Authorise the payment transaction;

14. On successful payment transaction, the account of the taxpayer gets debited and taxpayer gets a unique system generated payment confirmation number;

15. The concerned Focal Point Bank prints the challan and include in the scroll on a day to day basis and forward to the concerned PAO and, to the Range Officer as per the existing procedure and ensures two copies of the challan in delivered to the taxpayer;

16. Fund transaction and settlement with Government will be the exclusive responsibility of the bank as per the existing procedure.

To avail this facility, the taxpayer has to get registered with the bank authorized for the respective Commissionerate and offering net banking e-payment solution.

The list of 26 Banks authorised to collect Service Tax electronically:

Note:  Excise or Service Tax payment done through ICICI Bank , HDFC Bank and Axis Bank can be done by assesses for select Commissionerates only. For all other banks authorized for collection of excise duty or Service Tax payment can be made for all Commissionerates.   

List of Commissionerates for which payment can be made through ICICI Bank, HDFC Bank and Axis Bank is as under:

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