By IANS,
Kolkata : A “negative list” of service tax, or a list of services not attracting the tax, is being mulled and public debate on the measure will be held soon, a senior official said Thursday.
The “negative list” would mean that barring the services listed, everything else could be taxed.
“Right now it (preparation of the negative list) is in idea stage. Dr Govinda Rao, director of the National Institute of Public Finance and Policy, had recommended that service tax should be based on negative list. The concept is (that) everything is taxable unless it is in the negative list,” V.K. Garg, joint secretary (Tax Research Unit) in the union finance ministry, said on the sideline of a programme organised by the Bengal Chamber of Commerce and Industry here.
“Right now, we have a positive list which specifies which (service) is taxable. There is a belief that a large part of service sector is outside the levy. And one may not be aware of what is left out. We will take a conscious call on what should be left out,” he said.
“It (negative list) was in the union finance minister’s (Pranab Mukherjee) budget speech. He said he wants a public debate on it. Debate cannot be done in isolation, it would be in public domain,” Garg said.
Noting that preparing a negative list of service tax was a very challenging and complex subject, he said the models were available all over the world.
To a question on whether the rollout of Goods and Services Tax (GST) will be synchronised with the negative list, he said both options were possible. “You can have GST with negative list or GST without negative list. The two models can go together.”