Now a new negative list of services regime has been introduced. All services except those in negative list are taxable @ 12% (rate effective from first April)
This will enhance tax liability of all products and services. Manufacturing companies and traders utilize many services all of which will go to enhance cost. This will increase inflation.
what will be the taxable amount for negative list service?
All services appearing in the negative list are zero-rated.
Chinmoy, could you please explain what zero rating means?/
It has already been explained by Gulshanji that services featuring in the negative list belong to exempted category. Hence these should not attract any tax. As tax professionals know that exemption operates on the strength of departmental notification which exempts some services.But here we have to understand that any service figuring in the negative list is not permanently exempted. It might so happen that any service which is for the time being exempted, may be brought back again for imposition of service tax. Thus all services are taxable and in the case of a few,the taxability is suspended which we call zero-rated- meaning attracting zero rate - nil.Hope it clarifies!
[quote]
It has already been explained by Gulshanji that services featuring in the negative list belong to exempted category. Hence these should not attract any tax. As tax professionals know that exemption operates on the strength of departmental notification which exempts some services.But here we have to understand that any service figuring in the negative list is not permanently exempted. It might so happen that any service which is for the time being exempted, may be brought back again for imposition of service tax. Thus all services are taxable and in the case of a few,the taxability is suspended which we call zero-rated- meaning attracting zero rate - nil.Hope it clarifies! [/quote]
Yes, it does now! Thank you very much! :)
"I am free of all prejudice. I hate everyone equally." - W. C. Fields :)
Most of the services in negative list pertain to service received by government department, UNO or international organizations.
There is no point in taxing a service received by a government department. This will be like some one shifting money from one pocket to another.
I have just tried to give the conceptual background which guide imposition of indirect taxes in India. Obviously to obviate the practical problems notifications are issued to exempt or not to exempt!
