Negative list under Service tax comes into force from 1st July
16th June, 2012
Finance Act, 2012 has brought a paradigm shift in the Service Tax regime by bringing the concept of negative list to determine taxability. New Sections 65B, 66B, 66C, 66D, 66E, 66F and certain clauses of Section 68 will come into effect from 1st of July, 2012 while Sections 65, 65A, 66, 66A and part of Section 67 of Finance Act, 1994 will cease to have effect from the same date.
As per the new provisions, all services except those specified in the negative list under Section 66D, are taxable. Notification Nos. 19 to 23/2012-S.T., all dated 5-6-2012, which bring such provisions into effect from 1-7-2012, have been issued in this regard. Further, Notification Nos. 12 to 14/2012-S.T., all dated 17-3-2012, which provide for exemptions/abatements for specified services, will also come into effect from 1st of July.
As per the new provisions, as contained in the amended Section 68(2) of the Finance Act, 1994, Service tax is payable partly or wholly by the service recipients in respect of specified services. Notification No. 15/2012-S.T., dated 17-3-2012 which provides for quantum of tax payable by both service providers and service recipients in such specified cases, will also come into effect from 1-7-2012.