Services to cost 12 per cent more from tomorrow
30 Jun 2012
Beginning tomorrow (1 July 2012) all services, including train travel, but excepting those which are in the negative list, will be taxable at the rate of 12 per cent, making them expensive under the new service tax regime.
The new negative list, released by the finance ministry last week, exempts 38 services from the ambit of service tax. All other services will be subject to 12 per cent tax.
Services like metered taxis, auto rickshaws, betting, gambling, lottery, entry to amusement parks, goods and passenger transport and electricity distribution by discoms have been kept in the negative list and will not be subject to tax.
The negative list also includes services like funeral, burial, mutate services and transport of dead bodies.
The finance ministry has not exempted rail freight and passenger fares from the ambit of service tax so far and passengers and cargo operators will have to cough up 12 per cent more on an already raised fares.
Coaching classes and training institutions will also come under the service tax net. However, the finance minister has exempted school and university education and other ''approved'' vocational courses from service tax.
