In some good news, 14 more services will be exempted from tax as announced on June 20 by the Finance Minister Pranab Mukherjee. The services have been included in the negative list which is set to begin on July 1, 2012.
The services like that of the lawyers, sale of businesses, small firms and construction of metro and monorail will not be included under service tax. The exempted services also include the services from the advocates with the turn over of up to Rs. 10 lakh in the preceding financial year.
Mukherjee, while unveiling the guidance paper on the negative list regime said, “We have made some further changes to the list of exemptions… As a result of these exemptions and some other minor changes, the total number of exemptions has gone up from 34 to 39″. If the specific exemption was not provided to services then the mergers and acquisitions would have attracted service tax under the new regime.
R Muralidharan, the PWC executive director said, “Sale of businesses, by virtue of not being a sale of goods, would have come under the service tax net”. The fresh exemptions will also cover certain services in formal education, transportation of passengers by ropeway, cable car or air tram, public libraries, public conveniences, and services provided on a taxable territory.