Draft Tax rules

No service tax for non-AC rail, cabs and autos

Nov 19, 2011 |

The government has kept non-AC second-class train and metro travel and pre-school and recognised education institutions out of service tax in the revised draft of ‘taxation of service based on negative list’ released Friday.

It also excluded services such as insurance, post — other than post card, money orders and inland letters — security, trade fairs and exhibitions, transport of goods and passenger and warehousing. All services not on the negative list would be taxed. This is an attempt to widen the tax net.
As per the revised discussion paper, 22 services will be on the negative list as against 27 proposed in an earlier draft. The government said as far as timing for introduction of the negative list was concerned, the opinion was divided.
“While some feel it should be introduced at the time of GST, with a wider constitutional mandate, there are others who feel the introduction should be done independently of the GST,” said the draft paper.