Revised Negative List of Service Tax for 2013-14 (Section 66D)

June 6, 201355 Comments

The charging section of the Finance Act, 1994, Section 66B provides that service tax should be levied on all services except the services which are specified in Section 66D of the said Act. As per Section 66D of the Financial Act, 1994, Negative list of Service Tax for 2013-14 is given here which is revised as per latest budget. There are currently 17 heads of Services which are given in the “negative list”. This Negative list of service tax is very important because every activity not covered under this list is chargeable to Service Tax. This list is also very useful in CA IPCC Paper 4 Taxation also.negative list of Service-Tax

Negative List of Service Tax

Some updates in the negative list of service tax keeps coming and we keep adding it here. For whole negative list scroll down.

LATEST UPDATES: August 2014:

Changes in Negative List from 01.10.2014

* Notification No. 18/2014 &  19/2014-Service Tax  dated 25th August’ 2014

* Effective date of amendment—1st Oct’14

Services Provided by Radio Taxis:

  • Earlier, radio taxis were excluded from the purview of service tax by virtue of section 66D(o)(vi) of Finance Act,1994;
  • However, in the Finance (No.2) Act, 2014, enacted on 6th August, 2014, the said section was amended & the “radio taxis” got deleted, resulting in levy of service tax thereupon. However, effective date wasn’t notified. Now, the same has been notified as 1stOctober,2014;
  • At the same time, abatement of 40% shall be allowed in such cases, as provided in entry no. 9/9A of N/N 26/2012-ST, amended by N/N 08/2014- ST, subject to the condition that no CENVAT is claimed.
  • Hence, effective rate of service tax shall be 4.944%.

 

SERVICES BY WAY OF ADVERTISEMENT:

  • As per the erstwhile provisions contained in section 66D(g) of Finance Act, 1994, sale of space for advertisement, other than radio & television, used to remain excluded from the levy of service tax.
  • In the Finance (no. 2) Act, 2014, all advertisements, other than in print media, were made subject to service tax, though effective date of applicability of amended provisions, was not defined.
  • Now, the same has been notified as 1st October, 2014.

 

DETERMINATION OF RATE OF EXCHANGE:

  • From 28-May-2012, section 67A was inserted to determine the rate of exchange to be opted for the purpose of determination of value of the taxable service & such rate was construed to be the rates notified by CBEC from time to time, in accordance with section 14 of Customs Act,1962.
  • This had led to various practical difficulties in the industry, since they had to separately maintain a track record as per CBEC rates for the purpose of valuing import or export of service, while in financial statements the rates were taken on a different basis(e.g. RBI rates, [email protected] TT buying/selling rate, etc.)
  • Now, w.e.f. 1st October, 2014, rule 10 has been inserted in Service Tax Rules, 1994 to consider the rate of exchange as per GAAP on the date when Point of taxation arises in terms of the Point of Taxation Rules, 2011.
  • Post this amendment, an ambiguity may arise as to whether the same rates may also be used for valuing export of services, or department may take the other view?

 

Updated on 16/06/2013.

Negative List of Service Tax 2013-14

Negative list of Service Tax is comprised of following 17 heads. I have given all the 17 heads of negative list of Service Tax below.

  1. Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere:
    1. services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Government;
    2. services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
    3. transport of goods or passengers; or
    4. Support services, other than services covered under clauses (i) to (iii) above, provided to business entities.
  2. Services by the Reserve [email protected] of India;
  3. Services by a foreign diplomatic mission located in India.
  4. Services relating to agriculture or agricultural produce by way of –
    1. agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing;
    2. supply of farm labour;
    3. processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter essential characteristics of agricultural produce but make it only marketable for the primary market;
    4. renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;
    5. loading, unloading, packing, storage or warehousing of agricultural produce;
    6. agricultural extension services;
    7. Services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce.
  5. Trading of goods.
  6. Any process amounting to manufacture or production of goods.
  7. Selling of space or time slots for advertisements other than advertisements broadcast by radio or television.
  8. Service by way of access to a road or a bridge on payment of toll charges.
  9. Betting, gambling or lottery.
  10. Admission to entertainment events or access to amusement facilities.
  11. Transmission or distribution of electricity by an electricity transmission or distribution utility.
  12. Services by way of –
    1. Pre-school education and education up to higher secondary school or equivalent;
    2. Education as a part of a curriculum for obtaining a qualification recognized by law;
    3. Education as a part of an approved vocational education course.
  13. Services by way of renting of residential dwelling for use as residence;
  14. Services by way of –
    1. extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount;
    2. inter-se sale or purchase of foreign currency amongst [email protected] or authorized dealers of foreign exchange or amongst [email protected] and such dealers;
  15. Service of transportation of passengers, with or without accompanied belongings, by –
    1. a stage carriage;
    2. railways in a class other than – (A) first class; or
      (B) an air conditioned coach;
    3. metro, monorail or tramway;
    4. inland waterways;
    5. public transport, other than predominantly for tourism purpose, in a vessel between
    6. places located in India; and
    7. metered cabs, radio taxis or auto rickshaws;
  16. Services by way of transportation of goods –
    1. by road except the services of –

      1. a goods transportation agency; or
      2. a courier agency;
    2. by an aircraft or a vessel from a place outside India up to the customs station of clearance in India; or
    3. by inland waterways;

17. Funeral, burial, crematorium or mortuary services including transportation of the deceased.

2 extra services included in Negative list

Two more services have been included in the negative list for service tax. These are:

Vocational courses offered by institutes affiliated to the State Council of Vocational Training; and, testing activities in relation to agriculture and agricultural produce.

 

The Finance Minister has also accepted the request of the Film Industry that full exemption of service tax granted on copy right on cinematography be limited to the films exhibited in cinema halls only.

 

All air conditioned restaurants will be brought under the service tax net. At present service tax does not apply to those air conditioned restaurants which do not serve liquor. But considering this distinction to be artificial, P. Chidambaram has proposed the uniformity of service tax for the two.

 

The rate of abatement for such homes and Flats which have a carpet area of 2000 sq. ft. or more; or have a value of Rs. 1 crore or more, has been reduced from 75% to 70%. However, low cost housing and single residential units will continue to enjoy existing exemptions from service tax.

That’s all in the list of Negative Services for 2013-14.

If you have any query then kindly comment below.


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About the Author ()

I am Noor Punasiya, owner & founder of CAcracker, aspiring Chartered Accountant and a passionate blogger. I write about educational updates for CA, CS, CMA at CAcracker. Stay in touch with me through Facebook, Twitter or Google+.

Comments (55)

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  1. Hitendra Nath says:

    Dear SIr,

    Thanks for the negitive list .
    I would like to know whether point 4 ( Support services ) can be applicable for an individual who is residing and working in India
    as consultant for a foriegn based company. This individual is exporting his intellectual knowhow of the market in India and receive fees in convertible foriegn exchange. directly from the foriegn company.

    The services and knowhow are used by the foriegn company to globally compete in the indian market .

    Since in this case this Indian resident individual is providing support service to a FOriegn business entity – therefore he is NOT liable to pay service tax.

    Please confirm if this understanding is correct.

    Thanks and Best REgards,
    Hitendra N.R
    a

    • ST says:

      Hi, this question is from an overseas importer. We have buying agents in india they charge us commission on the goods that we import from the factories recommended by agents. Are we supposed to pay service tax on buying commission charged by the agent?

  2. Narendra Jain says:

    valuation rule 10 of Place of Provisions of Service Rules, 2012 expressed: Place of provision of a service of transport of goods in the place of destination of goods.
    In Freight forwarding business place of destination is outside India and as per this rule service tax will not applicable on Freight forwarding business. but nothing mentioned in Negative List.

    In this situation what we should do,

    if margin add in Export Freight, Service tax will be applicable.

    Please advice

  3. Sheraz Ali says:

    Dear Sir,

    With kind respect I would like to ask you a question i.e. Is the TAILORING is under cover in service tax act with the turn over is more than 10.00 lacs.

  4. N.Santhoshni says:

    Whether service tax applicable to a special economic zone authority?
    Kindly reply as soon as possible. Thank You in advance:)

  5. Aseem Chhabra says:

    Pl do advice whether selling of paintings by artist fall in the services tax or it is matter of vat etc.

  6. Pradeep says:

    Is contract for hiring ambulance services taxable. Please note ambulances are used for bringing patients to hospitals for treatment.

  7. Anas says:

    Services to educational institution up-to higher secondary level is noted.
    my doubt is services to engineering college ( B.TEch , M.Tech )is exempted from Service tax ?

    • G.Raghunath says:

      Please inform whether Insurance premium paid by the Educational Institutions for their own/hired school/college buses are exempted from paying Service Tax while taking/renewing the motor policies

  8. Divya says:

    Let me know whether Service tax under reverse charge mechanism applies in case payment made by indian company to skype, godaddy.com ,google adwords ?

    whether indian co is liable to pay service tax?

    whether import of service rules apply?

  9. Amit Maheshwari says:

    Dear Sir,

    THis is informed to you we are working with Natrip Implementation society at pitampur,dhar,MP,Please confirm to me service tax applicable or not against submission of RA Bill.

    Regards,

    Amit Maheshwari

  10. SUNITA GROVER says:

    Please let me know if dental services are covered by Service tax.

  11. Narinder Rehani says:

    Dear sir,

    Please let me know whether service Tax applicable on Advocates.If yes, under which service and what is the rate of abatement.

    Regards,

    Narinder Rehani

  12. Gyanendra Kumar Bhatnegar says:

    Sir,
    whether on Directors remuneration paid as salary to full time directors of Private Ltd Co on which T D S Is deducted U/S 192 per the Income Tax Act, and Form 16 is issued to them is liable to pay Service Tax under reverse charge.
    Thanks
    Regards
    G.K.Bhatnagar

  13. bipin says:

    Sir..
    My query is regarding hotels and restraints. Whether non AC hotels.. Take away counters like dominoz, mc Donalds, subways where we place order directly and AC restarunts with no licence to serve liquor are supposed to charge us service tax ???
    And same qustion for food courts in mall and multiplexes also.

    Would appreciate if you clear my doubt’s here by emailing me.

    I have argued with above mentioned eating food joints and they returned my service tax back to me… So need a proper clarification.

    Thanks

  14. Vikram Agarwal says:

    Dear sir

    My query is regarding service tax implication on government contracts for road building etc.

    1. Is it applicable on contracts directly taken from government bodies.
    2. Is it applicable for subcontracts of the above government contracts.
    3. In case a road is made privately but for the benefit of public. Will it attract service tax.

    Rgds

  15. S.K.Sharma says:

    Sir,
    Please confirm that job work done for Assembly and testing of electronic PCB boards, falls under negative list or it is a taxable service.
    Can we take it under category ( Any process amounting to manufacture or production of goods.)
    Here we use our premises,consumables,tools and labor.
    Material is provided by service receiver.
    No Sale only labor charges claimed.

    Regards.

  16. b.s.bansal says:

    sir/madam,

    pl. guide me that cicil work done for hafed i.e construction of godown.

    is contractor liable to pay service tax or service tax not applicable ?

  17. chanchal says:

    whether service tax to be charged by the actor or model who providing modeling or acting as an actor in serial (if yes) under which head of service tax such services to be charged

    PLZ reply

  18. Rashi khandelwal says:

    Can u plz explain the point no. 1 dat these r exempted or not…

  19. Munish Gupta says:

    Sir Please ask me whether is service tax applicable on Agents providing service of travelling Agent, Tour Travel, Tickting of Airways etc….

  20. S.Patra says:

    Please tell me applicability of service tax on edc/idc collected by builder on flat sale

  21. talikot s says:

    my query is whether water procured from water tankers for use in apartments is liable for service tax by asssn on the MMF of residents . the local muncipality ie BWSSb does not supply water in our area.

    Regards

  22. M.K says:

    whether hiring of plants/ giving plants on hire by a nursery is liable to service tax. If yes then under which service..
    Please reply.
    Thanks.

  23. Ramesh V.Pardeshi says:

    A Civil Contractor register under works contract service providing service for construction of seed unit/godown to Karnataka state seeds corporation, bangalore, weather this service is taxable service or exempeted under service relating to agricultural or agricultural produce.

    Please reply.

    Thanking you.

  24. Rajan Uttekar says:

    Dear Sir,
    We have laundry unit , on dry cleaning there is service tax is liable (limit ten lakh) .But From july 2012 they introduced the negative list in which tax is liable to wet cleaning, pressing, and darning also.
    Now my question is at present what is the status of negative list ? or they have introduced again as specified services ?If so then only tax is on dry cleaning.And other activity exempted ( Wet ,Pressing,Darning)
    Please guide us.
    Thanking You.

  25. ajinkya says:

    Dear sir,
    can u tell me that is it applicable to pay service tax on a rent of commercial space to the owner of a space ? owner of my commercial space demands me service tax on the decided rent should i pay him service tax?

    • mukesh says:

      payment of service tax should be only if the invoice reflect the service tax charged with service tax number if the land owner is asking on old payment with retrospective effect it will be consider that amount what you have paid to him is inclusive of service tAX

      regards

  26. bharath says:

    Sir,
    Please confirm that job work done for gold pure and silver pure to make gold ornaments and silver ornaments , falls under negative list or it is a taxable service.
    Can we take it under category ( Any process amounting to manufacture or production of goods.)
    Here we use our premises,consumables,tools and labor.
    Material is provided by service receiver.
    No Sale only labor charges claimed.

  27. amit nagar says:

    whether doctors are required to pay service tax

  28. mukesh says:

    recognized medical treatment of a clinical establishment register under sec 2(h) of clinical establishment are exempt from Service tax
    but exclude some cosmetics surgery for beauty look

  29. jeetendra acharya says:

    hello sir,
    Sir I have outdoor catring and mandap keepar business.
    i have work in government.type of Election and other in govt.Tender
    can i have laybel to pay services tax.

  30. SURESH GOYAL says:

    Dear Sir,

    Please clear whether a) service tax is leviable on Shipment from Indian Border to other country and vice-versa b) service tax is leviable on Travelling/booking of goods by Aircraft from Indian Border to other country and vice-versa c) Carrying of goods by sea within India d) Carrying of passengers within India by sea or any other mode in water.

  31. Bijender SIngh says:

    Dear Sir, We are Primary Contractor of Bharat Dynamic Ltd. (A Gov. Organisation) for storage Building & we sublet project part to subcontractor please clear service tax levied portion om subcontractor

    • Hello Bijendrer,

      You need to charge service tax on the gross amount charged to customer. Subcontracting will be a separate transaction between you and subcontractor. if you are not availing any abatement then you can avail CENVAT credit for Service tax paid on subcontracting part. however if you are covered under work contract tax then pls refer the Work contract service for detailed information.

      Regards.
      CA Pradeep Gupta

      • shishir nigam says:

        I want to know that my friend is a govt.contractor under Ganga action plan and he is provided staff like election/operators monthely contact basis to govt dept. Will he came in under service tax?

  32. Narendra Sharma says:

    Dear Sir, We would provide security services to foreign diplomat office. Whether service tax should be charged or not?

    • Lokesh reddy says:

      Services provided by foreign diplomat office are exempt for ST but not services provided to foreign diplomat office so ST should be charged.

  33. Lokesh reddy says:

    Dear sir please confirm, ST on air fare for transportation of goods by aircracft from outside india to the customer place is chargible or not.

  34. ajay pal says:

    dear sir we hired some coolers for summer whether service tax payable or not.

  35. Rajeev says:

    Is service tax applicable for a service given to an educational institution?

  36. Contractor Chennai says:

    Dear Sir,

    What about JNNURM and RAY projects. We have undertaken a project in this scheme in 2012 when it was obvious in the negative list. Please advice.

    Thanks,

  37. Srihari.S says:

    when we are paying for gym we should pay service tax If we should pay means how much percent

  38. shishir nigam says:

    I want to know that my friend is a govt.contractor under Ganga action plan (Ganga pollution control unit) and he is provided staff like election/operators monthely contact basis to govt dept. Will he came in under service tax?????

  39. akhil says:

    sevices provided to government institution is excempt from service tax sir

  40. akhil says:

    then by which notification it is excempt of services provided to government institution (iiit)

  41. Siddharth Jain says:

    If Any Association provide services to defense in a manner of constrution,is likely to pay service tax on or after 1.4.2015 or it is fully exempt??????

  42. karuppasamy says:

    whether printing for the party ,when they provide paper and rest material like ink is borne by printer is under service ta

  43. Arunachalam says:

    Sir,

    Please let me know whether Ministry of Corporate Affairs (MCA) is exempted paying service tax on rent for the office paid by them. Please revert back ASAP.

  44. Soumen Kundu says:

    Dear Sir,
    We would provide the services( Press ,Electronic Advt. and Event organisation) as a Advertising Agency to different clients like Govt. & Private office. Whether service tax should be charged or not?

    with regards,

    Expression Ad Agency Pvt. Ltd
    Kolkata

  45. ved parkash says:

    whether service tax is applicable on royality payment made by Delhi Doordarshan to a right holder for telecast of hindi feature film.

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