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Guide · GST

Service Tax in India — Abolished, Now GST

Service tax no longer exists. It was subsumed into GST from 1 July 2017. Here is the last service tax rate, how it maps to today's GST, and how to settle any pending pre-GST dues.

Written by
TaxClue GST Desk
Updated
18 August 2026
Reading time
4 min
Questions
14 answered
  • Verified for FY 2025-26
  • GST Expert Reviewed
  • Legacy → GST Mapping
Quick Answer

Service tax does not exist anymore. It was abolished on 1 July 2017 and subsumed into the Goods and Services Tax (GST). The last service tax rate was 15% (14% basic + 0.5% Swachh Bharat Cess + 0.5% Krishi Kalyan Cess). Today, most services attract 18% GST (9% CGST + 9% SGST, or 18% IGST). New businesses register under GST — service tax registration is no longer issued. Pending pre-GST dues are settled on the ACES portal.

If you are looking to register for "service tax" — you actually need GST

There is no service tax registration in 2026. Any service provider crossing the turnover threshold (generally ₹20 lakh; ₹10 lakh in special-category states) must take GST registration, not service tax. Beware old articles or agents still referring to "service tax registration".

For the record

Service Tax Rate History (1994–2017)

Service tax was introduced in 1994 and climbed from 5% to a final effective 15% before GST replaced it. The last rate stack is the one most people remember.

PeriodBasic RateCessEffective Rate
1994–20035%—5%
2004–20068–10%—8–10%
2009–201210%—10%
2012–201512%Education Cess 3%12.36%
Jun 2015 – Nov 201514%—14%
Nov 2015 – Jun 201614%SBC 0.5%14.5%
Jun 2016 – Jun 201714%SBC 0.5% + KKC 0.5%15%
From 1 Jul 2017——GST (no service tax)

SBC = Swachh Bharat Cess; KKC = Krishi Kalyan Cess. Abated services (construction, restaurants, GTA) had a lower effective rate on the abated value.

What changed

Service Tax vs GST — Key Differences

GST is broader than service tax: it covers both goods and services, is levied by the Centre and States together, and allows seamless input tax credit across the supply chain.

Old

Service Tax (pre-July 2017)

  • Central levy on services only
  • Standard 15% (14% + SBC + KKC)
  • Limited CENVAT credit
  • Half-yearly ST-3 return
  • Registration threshold ₹10 lakh
Now

GST (current)

  • Dual levy on goods & services
  • 5% / 12% / 18% / 28% slabs
  • Full ITC across supply chain
  • Monthly GSTR-1 & GSTR-3B
  • Threshold ₹20–40 lakh
Reverse charge carried over

The reverse-charge concept from service tax continues under GST. On notified supplies (goods transport agency, legal services, security, import of service, etc.) the recipient pays GST directly. See our reverse charge mechanism guide.

Provide services and unsure of your GST rate or registration?

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Then and now

Common Services — Old Rate to Current GST

How everyday services that once attracted service tax are taxed under GST today. Check the exact rate for a specific service using its HSN/SAC code.

ServiceOld Service TaxCurrent GST
IT / software / professional services15%18%
Banking & finance15%18%
Insurance (life / health)15%18%
Telecom15%18%
Restaurants (non-AC / standalone)~6% (abated)5% (no ITC)
Construction (residential)~4.5% (abated)5% (no ITC)
Goods transport (GTA)~4.5% (abated)5% (RCM) / 12%
Healthcare (hospitals)ExemptExempt

Indicative rates. GST rates are periodically rationalised (GST 2.0, eff. 22 Sep 2025) — confirm the current rate for your service on the GST portal.

Want the exact GST rate and SAC for your service?

Check GST Rates →
Pre-GST period

Pending Service Tax Dues & Old Records

Service tax is gone, but liabilities from before 1 July 2017 can still arise on assessment or audit. Here is how to deal with legacy matters.

  1. 1Trace old recordsST-3 returns, service tax registration (ACES)
  2. 2Compute duesTax, interest and penalty for pre-GST period
  3. 3Pay / settleThrough ACES / the notified challan route
  4. 4Handle noticesReply to jurisdictional Central Excise / ST office
  5. 5Move to GSTRegister & comply under GST going forward
SVLDRS was a one-time window

The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 offered a one-time settlement of pre-GST service tax and excise disputes, but that window has closed. Ongoing legacy disputes are now handled through normal adjudication and appeal at the jurisdictional Central Excise / Service Tax Commissionerate.

  • Old service tax registration number (if any)
  • ST-3 half-yearly returns filed pre-July 2017
  • Reconciliation of service tax vs GST transition
  • Any pending show-cause notice / demand
  • Transitional credit (TRAN-1) position
  • Current GST registration in place
  • GSTR-1 & GSTR-3B filed on time
  • Correct SAC and GST rate for your service

Facing a legacy service tax notice or GST transition query?

Get Expert Help →
Sources
  1. GST portal: gst.gov.in
  2. Legacy service tax / excise (ACES): aces.gov.in
  3. CBIC: cbic-gst.gov.in
  4. GST replaced service tax w.e.f. 1 July 2017 (Constitution 101st Amendment)

Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position with the official source before you act on it.

People also ask

Service Tax — Frequently Asked Questions

Short, direct answers to the 14 questions readers ask most on this topic.

No. Service tax was abolished on 1 July 2017 when GST replaced it. There is no service tax in 2026. Services are now taxed under GST at 5%, 12%, 18% or 28% depending on the type, with 18% being the standard rate for most services (9% CGST + 9% SGST, or 18% IGST).

Service tax, along with VAT, excise duty and several other indirect taxes, was subsumed into GST from 1 July 2017 to create a single, unified indirect-tax system for goods and services across India. GST removed the cascading of taxes and enabled seamless input tax credit across the supply chain.

GST (Goods and Services Tax) replaced service tax. Most B2B services that attracted 14–15% service tax now attract 18% GST. Unlike service tax, GST is levied by both the Centre and States (dual GST), covers goods as well as services, and allows full input tax credit.

The last service tax rate (up to 30 June 2017) was 15% — 14% basic service tax + 0.5% Swachh Bharat Cess (SBC) + 0.5% Krishi Kalyan Cess (KKC). Some services (construction, restaurants, goods transport) had abatements, so the effective rate on the abated value was lower.

For most services the 15% service tax has become 18% GST. IT and professional services, banking, insurance and telecom are all at 18%. Some sectors differ: standalone restaurants are 5% without ITC, residential construction is 5% without ITC, and healthcare and education (school) remain exempt.

The standard GST rate on most services is 18%. However, specific services carry other rates: 5% (e.g., standalone restaurants, GTA under RCM, economy transport), 12% (e.g., certain works contracts, business-class air travel) and 28% on a few luxury services. Always confirm the SAC-specific rate for your service.

You cannot — service tax registration is no longer issued. If you provide services and cross the turnover threshold, you must take GST registration instead (generally ₹20 lakh aggregate turnover; ₹10 lakh in special-category states). For a copy of an old service tax registration certificate, log in to the ACES portal (aces.gov.in) with your old credentials.

No. GSTIN is a 15-digit PAN-based registration number issued under GST and is completely different from the old 15-character service tax registration number (STC). If you were registered under service tax, you would have migrated to a fresh GSTIN during the GST transition; new applicants get a GSTIN directly.

Under GST, a service provider must register once aggregate turnover exceeds ₹20 lakh a year (₹10 lakh in special-category states). This replaced the old service tax threshold of ₹10 lakh. Inter-state supply of services and certain notified categories may require registration regardless of turnover.

Pre-July 2017 service tax dues, interest and penalty are dealt with through the ACES portal (aces.gov.in) under your old service tax registration and the notified challan route. For disputes, respond to your jurisdictional Central Excise / Service Tax Commissionerate. The SVLDRS 2019 one-time settlement scheme has since closed.

The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was a one-time amnesty that let taxpayers settle pending pre-GST service tax and central excise disputes with substantial waiver of interest and penalty. It was a time-bound window that has closed; current legacy disputes go through normal adjudication and appeal.

Eligible CENVAT credit as on 30 June 2017 could be carried into GST through the transitional credit form TRAN-1 during the transition window. That window (including court-permitted extensions) has closed, so fresh transitional credit claims are generally not possible now. Any such claim already made is subject to verification.

Yes, the reverse-charge concept continues under GST. On notified supplies — goods transport agency (GTA), legal services from advocates, security services, sponsorship, import of services and more — the recipient pays GST directly instead of the supplier. See our reverse charge mechanism guide for the full list.

Export of services is treated as a zero-rated supply under GST, just as it was zero-rated under service tax. You can export without paying tax under a Letter of Undertaking (LUT), or pay IGST and claim a refund, provided the transaction meets the conditions for export of services (including receipt of payment in convertible foreign exchange).