Metered taxis, entry to amusement facilities, second-class rail travel, betting, gambling and lottery will not attract the 12 per cent service tax, as per the budget proposal.
The negative list of services, on which the increased service tax of 12 per cent will not be levied, also include admission to entertainment events, access to amusement facilities and travel by radio taxis and auto rickshaws.
Other important services which will not attract the tax include funeral, burial, mutate services and transport of deceased.
According to the budget proposals of Finance Minister Pranab Mukherjee, service tax will be levied on all services which are not mentioned in the negative list.
To increase revenue
The minister has proposed to increase the rate of levy from 10 per cent to 12 per cent. It was clarified that tax will be levied on travel by first class and in air conditioned rail coaches, transport of goods and courier agencies.
In the education sector, service tax will not be levied on school, university education and approved vocational courses. The coaching classes and training institutions, however, will continue to be subject to the service tax.
In order to bring as many services as possible in the net, the government has defined service as “any activity carried out by a person for consideration”, with some exception. The services sector account for about 59 per cent of the country's Gross Domestic Product.
