Negative List of Services

Negative List of Services

• The services not under the negative list will attract 12 percent service tax.

• The services that comprise the negative list include those provided by the government or local authorities, except a few specified services where they compete with private sector.

• The list also includes pre-school and school education, recognised education at higher levels and approved vocational education, renting of residential dwellings, entertainment and amusement services and a large part of public transportation including metered cabs, and agriculture and animal husbandry.

• The negative list concept is practiced globally and is proposed to be introduced in India as part of the goods and services tax (GST) regime.

• Movement towards the negative list will result in reducing nearly 290 definitions and descriptions in the Act to 54, and the exemptions from the existing 88 to 10

Negative List of Services

The negative list shall comprise of the following services, namely:––
1. Services by Government or a local authority excluding the following services to the extent
     they are not covered elsewhere—
    (i) services by the Department of Posts by way of speed post, express parcel post, life
         insurance and agency services provided to a person other than Government;
    (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or
        an airport;
    (iii) transport of goods or passengers; or
    (iv) support services, other than services covered under clauses (i) to (iii) above, provided
        to business entities;
2. Services by the Reserve Bank of India;
3. Services by a foreign diplomatic mission located in India;
4. Services relating to agriculture by way of—
    (i) agricultural operations directly related to production of any agricultural produce including
    cultivation, harvesting, threshing, plant protection or seed testing;
    (ii) supply of farm labour;
    (iii) processes carried out at an agricultural farm including tending, pruning, cutting,
        harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling
        or bulk packaging and such like operations which do not alter the essential characteristics
        of agricultural produce but make it only marketable for the primary market;
     (iv) renting or leasing of agro machinery or vacant land with or without a structure incidental
        to its use;
    (v) loading, unloading, packing, storage or warehousing of agricultural produce;
    (vi) agricultural extension services;
    (vii) services by any Agricultural Produce Marketing Committee or Board or services
        provided by a commission agent for sale or purchase of agricultural produce;
5. Trading of goods;
6. Any process amounting to manufacture or production of goods;
7. Selling of space or time slots for advertisements other than advertisements broadcast by
    radio or television;

8. Service by way of access to a road or a bridge on payment of toll charges;
9. Betting, gambling or lottery;
10. Admission to entertainment events or access to amusement facilities;

11. Transmission or distribution of electricity by an electricity transmission or distribution utility;
12. Services by way of—
    (i) pre-school education and education up to higher secondary school or equivalent;
    (ii) education as a part of a curriculum for obtaining a qualification recognised by any law
        for the time being in force;
    (iii) education as a part of an approved vocational education course;
13. Services by way of renting of residential dwelling for use as residence;
14. Services by way of—
    (i) extending deposits, loans or advances in so far as the consideration is represented by
        way of interest or discount;
    (ii) inter se sale or purchase of foreign currency amongst banks or authorised dealers of
        foreign exchange or amongst banks and such dealers;
15. Service of transportation of passengers, with or without accompanied belongings, by—
    (i) a stage carriage;
    (ii) railways in a class other than—
        (A) first class; or
        (B) an airconditioned coach;
    (iii) metro, monorail or tramway;
    (iv) inland waterways;
    (v) public transport, other than predominantly for tourism purpose, in a vessel of less
        than fifteen tonne net; and
    (vi) metered cabs, radio taxis or auto rickshaws;
16. Services by way of transportation of goods—
    (i) by road except the services of—
        (A) a goods transportation agency; or
        (B) a courier agency;
    (ii) by an aircraft or a vessel from a place outside India to the first customs station of
        landing in India; or
    (iii) by inland waterways;
17. Funeral, burial, crematorium or mortuary services including transportation of the deceased.