Service Tax - Taxable Services, Negative List and Mega Exemption Notifications Post Budget 2015-16

Levy of Service Tax has been introduced by insertion of article 268A in the Constitution of India. The provisions relating to Service Tax were brought into force with effect from 1st July 1994. It extends to the whole of India except the state of Jammu & Kashmir. Service Tax is administered by the Central Excise & Service Tax Commissionerates and the Service Tax Commissionerates working under the Central Board of Excise & Customs (CBEC), Department of Revenue, Ministry of Finance, Government of India.

With effect from 1.07.2012, Service Tax regime based on negative list has been introduced.

Charge of Service Tax:  

Currently,taxable services are:  
1.Services covered under section 65B(44)
2.Services that do not form part of Negative List
3.Declared Services
4.Services that are not exempted under Mega Exemption Notification(s)
5.Services that are not exempted under a specific Notification

1.Services covered under section 65B(44):
Services that comes under the broad definition of services as provided in section 65B(44) are liable to service tax.  As per Section 65B(44)   "service" means any activity carried out by a person for another for consideration, and includes a declared service,...." It also includes exclusions.  

2.Services that do not form part of Negative List:  
With effect from 1st July, 2012, service tax is payable on all services as persection 65B(44) except those seventeen services (clause a to q) as listed insection 66D. This list is called as Negative List of Services.

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3. Declared Services:  
Nine Services specifically covered under section 66E as "Declared Services"

4.Services that are not exempted under Mega Exemption Notification(s):
The Government, in the public interest by issue of   Notification 25/2012 dated 20th June, 2012   had initially exempted 39 services from the levy of service tax. This notification is popularly referred to as Mega Exemption Notification which came into force with effect from 1st July, 2012. In other words services not covered in mega exemptions or negative list are taxable services unless specifically exempted.

Since then, there have been eleven amendments in the said mega exemption notification.These amendments (latest to past) as under:

Notification No. 20/2015       dated 21-10-2015: Services by Business Facilitator/corrospondent for Basic Savings Bank Deposit Account under PMJDY

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Notification No. 12/2015       dated 30-04-2015: PM Suraksha Bima/Jeewan Jyoti Beema/Jan Dhan Yonja

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Notification No. 06/2015       dated 01-03-2015: Withdrawal and grant of new Exemptions

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Notification No. 17/2014       dated 20-08-2014: Exemption to Hajand Mansarovar Religious Pilgrimage Yatra

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Notification No. 06/2014       dated 11-07-2014: Addition,substitution and omission of several entries.

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Notification No. 04/2014       dated 17-02-2014: New entry 2A related to cord blood banks and New entry 40 related to Services by way of loading, unloading, packing, storage or warehousing of rice.

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Notification No. 14/2013       dated 22-10-2013: New entry 19A related to Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act,1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the year.      

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Notification No. 13/2013 dated 10-09-2013 :       New Entry 9A for services provided by-

(i)    The National Skill Development Corporation set up by the Government of India;

(ii)    A Sector Skill Council approved by the National Skill Development Corporation;  

(iii)   An assessment agency approved by the Sector Skill Council or the National Skill Development Corporation

(iv)   A training partner approved by the National Skill Development Corporation or the Sector Skill Council in relation to (a) the National Skill Development Programme implemented by the National Skill Development Corporation; or (b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or (c) any other Scheme implemented by the NationalSkill Development Corporation.   

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Notification No. 03/2013 dated 01-03-2013:   Various amendments.

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Notification No. 49/2012 dated 24-12-2012:    New Entry 26A added to includeServices of life insurance business provided under –