Along with the commencement of the Negative List regime, significant changes have been introduced in the Service Tax law with respect to services liable to taxation. Changes have also been introduced in point of taxation, place of provision and service tax applicability under reverse charge mechanism. Consequently, with effect from July 1, 2012, the collection of service tax has given a new challenge both to the department as well to the assessee.
In today’s scenario, any service, to be chargeable to service tax, must be a ‘service’ covered by the definition in Section 65B of the Finance Act, 1994, and which does not find an entry either in Negative or Mega Exemption List. Further, it is important to note that the place of provision should be in taxable territory. The impact of changes from the Positive List to the current Negative List has made many services earlier classified as non-taxable services to taxable services and vice versa.
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