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Budget to Widen Services Tax Base

Indian govt is looking at whopping Rs 82,000 crore by widening the service tax base by bringing more services in the tax net and may introduce a negative list in the forthcoming Budget. 22 services are likely to be in the negative list and as of now 119 services are in the ambit of service tax. So next next fiscal (2012-13) we are going to see more services under the umbrella as Empowered Committee of State Finance Ministers on GST had approved imposition of service tax based on a negative list of services after the Central Board of Excise and Customs (CBEC) came out with a draft report in December.

Why Negative List in Service Tax Regime?

Indian industry had demanded that government should come out with negative list, while expanding the service tax base. A negative list based on service tax represents a change in the government’s approach as it is taxes on the principle of the positive list. The negative list concept is practiced globally and is proposed to be introduced in India as part of the Goods and Services Tax (GST).

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