The 95th amendment of the Indian Constitution in 2003 has empowered the Central Government to formulate laws for determining the modalities of levying the Service Tax and both the Central and the State Governments to collect the proceeds of the Service Tax. The Finance Act of 1994 provides that every person providing taxable service to any person shall pay service tax at the specified rate and in such manner as may be prescribed. Service tax is imposed at the rate of 10% with an addition of 2% education cess on certain identified taxable services provided in India by specified service providers. Taxable services rendered in India are exempt from Service tax when payment for such services is received in convertible foreign exchange in India and the same is not repatriated outside India. The office of Director General (Service Tax) has been established in the year 1997 in consideration of the increasing workload due to the expanding coverage of service tax. The Directorate of Service Tax co-ordinates between the Board and Central Excise Commissionerates and also monitors the collection and the assessment of Service Tax
