Negative List for Service Tax: Some Musings
Excise and Customs Reporter, Vol. 189, 2012
9 Pages Posted: 13 Feb 2012
Date Written: February, 12 2012
Abstract
The Finance Minister for the Government of India in his Budget Speech for 2011-12 proposed to initiate a public discussion on negative list for indirect taxation in the backdrop of the proposed ‘Goods and Service Tax’ (GST) framework. However the Central Board of Excise and Customs (CBEC), which is entrusted with the levy and collection of Service Tax, jumped the gun by proposing levy of service tax under a negative list regime. Introduced in 1994, the levy of service tax is upon enumerated activities defined as ‘taxable services’. Much water has flown since its introduction and while a fair certainty had been achieved on the ambit and principles governing this levy, levy of service tax under a negative list regime can effective unsettle the lessons learnt in the past. This paper examines the proposal in varied dimensions to ascertain the ramifications of the changes proposed in the first and second discussion paper issued by the Government of India relating for ‘public debate on a negative list of services concept’.
Keywords: Negative List, Service Tax, India, VAT
JEL Classification: H21, H25, H29, K34
Suggested Citation: Suggested Citation