Starting today, most services will be taxed Negative list of 38 will escape levy
All services, except those under a ‘negative list’, will cost more Except 38 services under the negative list, all others will be taxed at 12 per cent under the new service tax regime that kicks in on July 1. The Government had said earlier it would implement the negative list from July 1. Metered taxis, auto-rickshaws, betting, gambling, lottery, entry into amusement parks, transport of goods or passengers and electricity transmission or distribution are in the negative list. Other important services that will not be taxed include funeral and burial, and transport of the 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. Services provided to the Government, local authorities or a Government authority to repair or maintain aircraft would also fall under the negative list. Services that advocates provide to other advocates, or business entities — up to a turnover of Rs. 10 lakh in the preceding financial year — are exempt. Service providers offering facilities for public convenience, such as bathrooms, washrooms, urinals or toilets, will not be taxed . Rail fares There is, however, no clarity on whether the tax would apply to rail freight and passenger fares . The Union Minister of Railways, Mr Mukul Roy said the rail transporter will not impose tax on freight movement and passenger fares from July 1. He has written to Prime Minister, Dr Manmohan Singh, who now holds the Finance portfolio, in this regard. Negative to positive The Government has widened the definition of ‘services’ to tax more business activity. As of now, 119 services that come under the ‘positive list’ will attract the levy. This new approach to taxation of services is intended to take the economy a step closer to the proposed Goods and Service Tax regime. The finance ministry is aiming to mop up Rs. 1.24 lakh crore by taxing services during the current fiscal. Last fiscal, the collections were Rs. 97,000 crore .