Negative list for service tax to be effective from July 1
June, 06th 2012
Finance ministry sources informed that all notifications pertaining to the negative list for service tax will be issued today. The negative list approach will be effective from July 1, 2012. CNBC-TV18's Aakansha Sethi reports, the negative list will help the finance ministry to rake in 10-12% additional revenue, adding up to about Rs 18000 crore.
In a year when there is a constraint on the fiscal deficit, the government would like to go ahead and introduce the negative list. The negative list essentially includes everything that cannot be considered as goods but can be defined as a service. All such items will be taxed from now onwards.
The ministry has specified 17 items as part of the negative list and these will include education, healthcare as well as a deemed sale of goods.
Apart from these 17 items, every other service that is provided will be taxed and this will come into effect from July 1. This will also have an impact on the consumers because a lot of items that were untaxed till now, will have a levy of about 12% as service tax.