Discuss in detail the Salient Features of Service Tax.

Service tax is a form of indirect tax levied by the government on the provision of taxable services. It was introduced in India in 1994 under the Finance Act, 1994, and has undergone several amendments and revisions over the years. Here are the salient features of service tax:

1. Levy and Scope:
   Service tax is levied on the provision of taxable services specified under the Finance Act, 1994. It applies to a wide range of services such as banking and financial services, telecommunications, transportation, hospitality, advertising, consulting, and professional services. The tax is levied on the value of taxable services provided by service providers in India.

2. Taxable Event:
   The taxable event for service tax is the provision of taxable services by a service provider to a service recipient. It is levied at the time when the service is provided or agreed to be provided, whichever is earlier. Unlike goods, which are subject to taxation at the point of sale or manufacture, service tax is applicable at the time of rendering the service.

3. Exemptions and Abatements:
   Certain services are exempted from the purview of service tax, either fully or partially, based on specified criteria. Additionally, the government may provide abatements or concessions on the taxable value of certain services, leading to a reduced tax liability for service providers. These exemptions and abatements are intended to promote specific sectors or activities and provide relief to small-scale service providers.

4. Registration and Compliance:
   Service providers whose aggregate turnover exceeds the prescribed threshold are required to register with the tax authorities and obtain a service tax registration number (STN). Registered service providers are required to collect service tax from their customers, file periodic returns, and remit the tax to the government within the specified timelines. Non-compliance with registration and filing requirements may attract penalties and legal consequences.

5. Input Tax Credit:
   Service tax paid on inputs and input services used in the provision of taxable services is available as input tax credit (ITC) to registered service providers. ITC allows service providers to offset the tax paid on inputs against their output tax liability, thereby reducing the overall tax burden. However, ITC is subject to certain conditions and restrictions specified under the law.

6. Tax Rate and Amendments:
   The rate of service tax is determined by the government and may be revised from time to time through amendments to the Finance Act. Changes in the tax rate may be influenced by economic factors, fiscal policy objectives, and revenue requirements of the government. Service providers are required to comply with the applicable tax rate as notified by the government.

7. Comprehensive Coverage:
   Service tax legislation is designed to provide comprehensive coverage of taxable services while minimizing scope for tax evasion and avoidance. The law includes provisions for the classification of services, valuation of taxable services, determination of place of provision, and assessment and adjudication of tax liabilities.

Overall, service tax plays a significant role in mobilizing revenue for the government and promoting fiscal equity by taxing consumption of services. The salient features of service tax outlined above demonstrate its importance as a source of revenue and its impact on various sectors of the economy.