Negative List based Service Tax_ Effective from July 1, 2012

---------- Forwarded message ----------

From: SK Patodia & Associates <ashish@skpatodia.in>
Date: Tue, Jun 5, 2012 at 10:11 PM
Subject: Negative List based Service Tax_ Effective from July 1, 2012
To: cvpawar@gmail.com

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Dear Sir/Madam,

     One of the most awaited economic reform in the field of Indirect Taxation i.e. "Introduction of Negative List based Service Tax" is now coming to reality. Central Government has appointed July 1, 2012 (vide Notification No. 19/2012-ST dated 5.6.2012) as the effective date from which Negative List based service tax will come into operation. 

 

     Now no need to classify the services under any particular category for taxing purpose. Any activity carried out by one person for another for a consideration, unless covered by the Negative List or by some exemption Notification, will be liable to service tax. Many transactions/activities which were hitherto out of the scope of service tax may now be liable to service tax.

 

     It is expected that there would be corresponding changes in Cenvat Credit Rules, 2004, Place of Provision of Services Rules, 2012, Point of Taxation Rules, 2011 and Service Tax Rules, 1994 to align these with the Negative List based service tax regime. These amendments are expected to shower in next few days.

 

     So be cautious!!!  Now more activities will be covered by Service Tax Law. Important to analyse existing and future transactions afresh to ascertain the applicability of service tax or otherwise.

 

     Be ready to face the challenges of new service tax law which is expected to bring paradigm shift in the manner of charging of service tax.

 

Regards,

 

S K PATOdiA & ASSOCiATES 

CHARTERED ACCOUNTANTS