Kerala right-back Surjith's shot hit the horizontal and the Services players erupted in unbridled joy to the disappointment of the home side supporters.
For Services, Dhanji Singh, Sharwan Kumar, M Dileep and Kiran K Varghese scored while two shots were saved by Kerala custodian Jean Christian. For the hosts, Rino Anto, Abdul Basid and BT Sarath found the back of the net in the penalty shootout. This was Services' third Santosh Trophy title.
Services had the first go at the opponents' goal in the sixth minute. But the hero of the second semifinal, Lalian Mawia shot over from inside the box.
Kerala's first chance came in the 11th minute. Kannan, who played in the final shrugging off an injury, latched on to a cross from the midfield inside the 18-yard box. But his strike brought out the best in Services goalkeeper Nano Singh. Mawia had another chance to make amends in the 25th minute when he was set up on top of the box by Subrata Sarkar.
But this time the Kerala goalkeeper blocked his effort. Change of ends saw no change of fortunes for either outfit. They played with same verve but the elusive goal was not coming.