All services except 17 in the negative list, and those which are exempted vide mega Notification No. 12/2012-ST dated 17.03.2012 will be taxed from July 1, the Finance Ministry has said. If a particular activity is not excluded by the negative list, then we have to apply the test as to whether it is exempted by the general exemption Notification No. 12/2012-ST dated 17.03.2012.
Under the ‘negative list’ approach, services specified in the list will remain outside the tax net. The government has widened the definition of ‘Services’ to bring in more activities under the tax net. At present, 119 services that come under ‘positive list’ are levied.
The ‘negative list” approach was proposed in the Budget. Following assent of the President to the Finance Bill, the Finance Ministry said the new service tax regime will come into force from July 1.
The Budget also hiked the service tax rate by two per cent to 12 per cent.Online GST Certification Course by TaxGuru & MSME- Click here to Join
On A lighter side Even Paid Toilet Service will come under Service Tax Purview.
Services like metered taxis, auto rickshaws, betting, gambling, lottery, entry to amusement parks, transport of goods or passengers and electricity transmission or distribution by discoms have been kept in the negative list.
Other important services which will not attract the tax include funeral, burial, mutate services and transport of deceased.
Coaching classes and training institutions will come under the net, though the tax will not be levied on school, university education and approved vocational courses,
Travel in first class and in air-conditioned rail coaches, too, will attract service tax.
In order to bring as many services as possible in the net, the government has come out with a very wide definition of service. With some exception, it has been defined service as “any activity carried out by a person for consideration”.