From Spring Documentation:

The @Repository annotation is a marker for any class that fulfils the role or stereotype of a repository (also known as Data Access Object or DAO). Among the uses of this marker is the automatic translation of exceptions, as described in Exception Translation.

Spring provides further stereotype annotations: @Component, @Service, and @Controller. @Component is a generic stereotype for any Spring-managed component. @Repository, @Service, and @Controller are specializations of @Component for more specific use cases (in the persistence, service, and presentation layers, respectively). Therefore, you can annotate your component classes with @Component, but, by annotating them with @Repository, @Service, or @Controller instead, your classes are more properly suited for processing by tools or associating with aspects.

For example, these stereotype annotations make ideal targets for pointcuts. @Repository, @Service, and @Controller can also carry additional semantics in future releases of the Spring Framework. Thus, if you are choosing between using @Component or @Service for your service layer, @Service is clearly the better choice. Similarly, as stated earlier, @Repository is already supported as a marker for automatic exception translation in your persistence layer.

┌──────────────┬─────────────────────────────────────────────────────┐
│ Annotation   │ Meaning                                             │
├──────────────┼─────────────────────────────────────────────────────┤
│  @Component  │ generic stereotype for any Spring-managed component │
│  @Repository │ stereotype for persistence layer                    │
│  @Service    │ stereotype for service layer                        │
│  @Controller │ stereotype for presentation layer (spring-mvc)      │
└──────────────┴─────────────────────────────────────────────────────┘