New Delhi June 6,
2012(PTI):
Funerals, betting and gambling have been exempted while almost all other
services will be taxed from July 1.
Under the new Service Tax regime,
only 17 services are in the negative list, which means they will not be
subjected to tax.
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.
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.
The services sector account for
about 60 per cent of the country’s Gross Domestic Product.
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”.
The government aims to garner Rs
1.24 lakh crore from the Service Tax during 2012-13.