Hi Pooja
Based on the details of your business process requirement, you can consider following:
Simple order related billing
Material type - DIEN (service material)
Item category - TAD
For service tax , you need to configure pricing with condition type for service tax.
Following link might help you:
http://wiki.sdn.sap.com/wiki/display/ERPLO/Service+Tax+Configuration+in+India+%28SD%29
Regards
Atul