Negative List 66D

1. CA GULZAR KARISHMA
MALIK
W W W. C AK A R I S H M A . C O
M

2. NEGATIVE LIST 66D
Charging section 66B provides that services specified
in negative list are not subject to ST.
 Theses are spread in 17 categories.
 Reason for Negative list:-
Earlier the Selective Taxation of Services method
being implemented
 The proposed new service tax regime based on
negative list of services will help widening the tax
base.
W W W. C AK A R I S H M A . C O

3. 1. SERVICE PROVIDED BY GOVT/ LA
 Services provided by Govt are not taxable
however the following are taxable
1. Services rendered by department of post
Taxable Services: Speed Post, Express
parcel post, Iife Insurance, agency services
Non Taxable Services: Basic mail services
like post card, inland letter, regtd post,
transfer of money through money order,
postal order, savings account
W W W. C AK A R I S H M A . C O

4. SERVICE PROVIDED BY GOVT/ LA
 Service in relation to aircraft, vessel in port/
airport
Taxable Services: Handling passenger & Cargo
Traffic, baggage handling, cleaning of aircraft, hotel,
rest room, restaurant, security services, warehouse,
parking, bringing vessel to dock, repairing vessel,
supply of labour
 Transport of goods or passengers
 Support Services Provided to Business entities like
infrastructural, operational, administrative,
marketing, advertisement, construction, research &
testing, Security etc A K A R I S H M A . C O
W W W. C

5. 2. SERVICES PROVIDED BY THE RBI
 Whether services provided by RBI taxable?
Ans. No (Specified in negative list)
 Whether services provided to RBI taxable?
Ans. Yes (Not specified in negative list)
 Whether services provided by Subsidiaries of RBI
taxable?
Ans. Yes (Example DICGC)
 Whether similar services provided by other banks
taxable?
Ans. Yes (Example Clearing houses)
W W W. C AK A R I S H M A . C O

6. 3. SERVICES BY A FOREIGN DIPLOMATIC
MISSION LOCATED IN INDIA
Functions:
1. Protect interest of citizens
2. Negotiate with GOVT
3. Issue Visas, travel documents.
All services are not taxable .
W W W. C AK A R I S H M A . C O

7. 4. SERVICES RELATING TO AGRICULTURE OR
AGRICULTURAL PRODUCE
1. Agricultural operations directly related to production of any
agricultural produce including cultivation, harvesting,
threshing, plant protection or seed testing;
2. Supply of farm labour;
3. Processes carried out at an agricultural farm (tending,
pruning, fumigating)
4.Renting or leasing of agro machinery or vacant land with or
without a structure
5.Loading, unloading, packing, storage or warehousing of
agricultural produce;
6. Agricultural Extension Services (DARE, ICAR)
7.Services by any Agricultural Produce Marketing Committee
or Board or services provided by a commission agent for
sale or purchase of agricultural produce;
W W W. C AK A R I S H M A . C O

8. 5. TRADING OF GOODS
 Activity of trading of goods shall be non
taxable
 As Definition of service excludes transfer of
title of goods/immovable property by sale, gift.
 Would activities of a commission agent or
a clearing and forwarding agent who sells
goods on behalf of another for a
commission be included in trading of
goods?
Ans: It is not trading of goods. Hence
taxable W W W. C AK A R I S H M A . C O

9. 6. PROCESSES AMOUNTING TO MANUFACTURE
OR PRODUCTION OF GOODS
 Any process/ product/ Job work/ production of
goods on which excise duty is leviable is not
liable to service tax.
W W W. C AK A R I S H M A . C O

10. 7. SELLING OF SPACE OR TIME SLOTS FOR
ADVERTISEMENTS OTHER THAN ADVERTISEMENTS
BROADCAST BY RADIO OR TELEVISION
W W W. C AK A R I S H M A . C O

11. Contd.
 One of the items in List II (State List)
Taxes on advt other than advt published in
newspaper & advt broadcast by radio/TV is
required to be framed by state govt.
W W W. C AK A R I S H M A . C O

12. Contd.
Producer TV Serial TV channel
Producer
Advt agency Broadcast TV
informs Advt
procures orders serial &
agency about
from customers provides FCT
FCT
Revenue from broadcasting advt is retained by producer & TV
channels are paid fixed amount for providing time slot
W W W. C AK A R I S H M A . C O

13. 8. ACCESS TO A ROAD OR A BRIDGE
ON PAYMENT OF TOLL CHARGES
 Not taxable ( Toll charges are collected by staff
of govt therefore there is no service rendered
by one person to another)
 Are service charges paid to any toll
collecting agency also Taxable/ Exempt?
Ans. Service of toll collection on behalf of
authority is taxable, actual toll charges are not
taxable.
Toll<Bid amount – No consideration- No STL
Toll>Bid amount – Profit= Consideration- STL
W W W. C AK A R I S H M A . C O

14. 9. BETTING, GAMBLING OR LOTTERY
 Tax on betting/ gambling/ sale of lottery tickets
is a state subject hence Central Govt cannot
levy tax.
 Are auxiliary services that are used for
organizing or promoting betting or
gambling events taxable/exempt?
Ans. Taxable (Many organisations run casino
which charge entry fee & percent of bet for
organising premises, maintenance of premises
etc)
W W W. C AK A R I S H M A . C O

15. 10. ENTRY TO ENTERTAINMENT EVENTS
AND ACCESS TO AMUSEMENT FACILITIES
 Tax on entertainment events/amusement is
state subject . Hence no service tax.
 Entertainment event- exhibition of
cinematographic films, circus, concerts,
sporting events, fairs, pageants, award
functions, dance performances, musical
performances, theatrical performances cultural
programs, drama, etc
 ‘Amusement facility- amusement parks,
amusement arcades, water parks, theme
parks, gaming devices, bowling alleys.
W W W. C AK A R I S H M A . C O

16. Contd.
 Would auxiliary services provided by a
person, like an event manager, for
organizing an entertainment event or by an
entertainer for providing the entertainment
to an entertainment event organizer be
covered in this entry?
Ans: Taxable (As these are used for
providing services specified in negative
list)
W W W. C AK A R I S H M A . C O

17. 11. TRANSMISSION OR
DISTRIBUTION OF ELECTRICITY
Generation station
Transmission
Substation
Distribution
End consumer
W W W. C AK A R I S H M A . C O

18. Contd.
 Transmission or distribution utility?
Central Electricity Authority
State Electricity Board
Central Transmission Utility (CTU)
State Transmission Utility (STU)
Distribution or transmission licensee (Tata
Power, Reliance Energy)
W W W. C AK A R I S H M A . C O

19. Contd.
 If charges are collected by a developer or a
housing society for distribution of
electricity within a residential complex then
are such services covered under this
entry?
Ans. Taxable
 If the services provided by way installation
of gensets or similar equipment by private
contractors for distribution of electricity
covered by this entry?
Ans. Taxable (not by way of transmission or
distribution of electricity)I S H M A . C O
W W W. C AK A R

20. 12. SPECIFIED SERVICES RELATING
TO EDUCATION
 Pre-school education and education up to
higher secondary school or equivalent
 Education as a part of a prescribed curriculum
for obtaining a qualification recognized by law
for the time being in force;
 Education as a part of an approved vocational
education course
W W W. C AK A R I S H M A . C O

21. Contd.
 What is pre school?
Nursery, kindergarten, play homes, crèche.
 What is education up to Higher secondary
school or equivalent?
Education from 1st to 12th standard
Equivalent- schools in India affiliate with universities
located outside India( International Baccalaureate
IB- CBSE, ICSE etc)
W W W. C AK A R I S H M A . C O

22. Contd.
 What is the meaning of ‘education for
obtaining a qualification recognized by
law’?
 Uniiversities, colleges, boards
 Professional Institutes like CA, CWA, CS
 Director General of civil Aviation, IRDA
 Courses recognised by AICTE, MCI,BCI, ICAR
W W W. C AK A R I S H M A . C O

23. Contd.
 What are approved vocational education courses?
• a course run by an industrial training institute or an
industrial training centre affiliated to the National
Council for Vocational Training, offering courses in
designated trades as notified under the Apprentices Act,
1961(52 of 1961)
• a Modular Employable Skill Course, approved by the
National Council of Vocational Training, run by a person
registered with the Directorate General of Employment
and Training, Ministry of Labour and Employment,
Government of India;
• a course run by an institute affiliated to the National
Skill Development W . C A K A R I S H M Aup O the
W W Corporation set . C by

24. Contd.
 Are services provided to educational
institutions also covered in this entry?
Following are exempt
(a) auxiliary educational services (mega
exemption)
(b) renting of immovable property
W W W. C AK A R I S H M A . C O

25. Contd.
 Are private tuitions covered in the entry
relating to education?
No. However, private tutors can avail the
benefit of threshold exemption.
 Are services provided by way of education
for obtaining a qualification recognized by
a law of a foreign country covered in the
negative list entry?
No. To be covered in the negative list a course
should be recognized by an Indian law.
W W W. C AK A R I S H M A . C O

26. Contd.
 Educational institutes such as IITs, IIMs
charge a fee from prospective employers
like corporate houses/ MNCs, who come to
the institutes for recruiting candidates
through campus interviews. Whether
services provided by such institutions are
taxable?
Yes. Service tax is liable on services provided
by such institutions in relation to campus
recruitment as such services are not covered
in the negative list. A K A R I S H M A . C O
W W W. C

27. 13. SERVICES BY WAY OF RENTING OF
RESIDENTIAL DWELLING FOR USE AS RESIDENCE
 Renting of immovable property is taxable as it
is specified in declared services.
 However following are not taxable.
1. Renting of vacant land relating to agriculture
2. Renting of residential dwelling for use as
residence
3. Renting of property by RBI
4. Renting out of property by Govt/ Local Auth
to all non business entity
W W W. C AK A R I S H M A . C O

28. Contd.
 Residential dwelling means?
 Includes- Bldg, place, home, flat for residence
 Does not include- hotel, motel, inn, guest
house, lodge, house boat etc
 If residential dwelling is used for commercial
purpose it is taxable. If Co/firm takes
residential dwelling on rent and provides same
to employees for residence, no tax is payable.
W W W. C AK A R I S H M A . C O

29. W W W. C AK A R I S H M A . C O

30. 14. SERVICES PROVIDED BY FINANCIAL
SECTOR
1. Services by way of extending
deposits, loans or advances in so far
as the consideration is represented by
way of interest or discount.
2. Service of inter se sale/purchase of
foreign currency among
banks/authorised dealer/between
them
W W W. C AK A R I S H M A . C O

31. ILLUSTRATIONS
 Fixed deposits or saving deposits or any
other such deposits in a bank or a financial
institution for which return is received by way
of interest.
 Providing a loan or overdraft facility or a
credit limit facility in consideration for payment
of interest.
 Corporate deposits to the extent that the
consideration for advancing such loans or
advances are represented by way of interest
or discount. W W W . C A K A R I S H M A . C O

32. Contd.
 If any service charges or administrative
charges or entry charges are recovered in
addition to interest on a loan, advance or a
deposit would such charges be also a part of
this negative list entry?
No. The services of loans, advances or deposits
are exempt in so far as the consideration is
represented by way of interest or discount. Any
charges or amounts collected over and above
the interest or discount amounts would
represent taxable consideration.
W W W. C AK A R I S H M A . C O

33. Contd.
 Would services provided by banks or
authorized dealers of foreign exchange by
way of sale of foreign exchange to general
public be covered in this entry?
Ans. No. This entry only covers sale and
purchase of foreign exchange between banks
or authorized dealers of foreign exchange or
between banks and such dealers
W W W. C AK A R I S H M A . C O

34. 15. SERVICES RELATING TO
TRANSPORTATION OF PASSENGERS
 Services by:
• a stage carriage;
• railways in a class other than (i) first class; or (ii)
an AC coach;
• metro, monorail or tramway;
• inland waterways;
• public transport, other than predominantly for
tourism purpose, in a vessel, between places
located in India; and
• metered cabs, radio taxis or auto rickshaws.
W W W. C AK A R I S H M A . C O

35. 16. SERVICE RELATING TO
TRANSPORTATION OF GOODS
 by road except the services of (i) a goods
transportation agency; or (ii) a courier
agency
 by aircraft or vessel from a place outside
India up to the customs station of
clearance in India; or
 by inland waterways
W W W. C AK A R I S H M A . C O

36. ARE ALL SERVICES PROVIDED BY GOODS
TRANSPORT AGENCY EXCLUDED FROM THE
NEGATIVE LIST?
 Yes. However, there are separate exemptions
available to the services provided by the goods transport
agency. These are services by way of transportation of –
• fruits, vegetables, eggs, milk, food grains or pulses in a
goods carriage;
• goods where gross amount charged on a consignment
transported in a single goods carriage does not exceed
one thousand five hundred rupees; or
• goods where gross amount charged for transportation
of all such goods for a single consignee in the goods
carriage does not exceed rupees seven hundred fifty.
W W W. C AK A R I S H M A . C O

37. Contd.
W W W. C AK A R I S H M A . C O

38. WHAT IS GTA?
 Any person providing service of transportation
of goods by road & issues consignment note.
 Transportation of goods by road by GTA is
taxable.
 Hiring of vehicle by GTA is exempt
 Payment of service tax by reverse charge.
W W W. C AK A R I S H M A . C O

39. 17. FUNERAL, BURIAL, CREMATORIUM OR MORTUARY
SERVICES INCLUDING TRANSPORTATION OF THE
DECEASED
 These services provided by all persons are not
taxable.
 Local authority provides mortuary, space for
cremation, burial.
 Transportation of dead body by vehicle,
ambulance, air is exempt.
W W W. C AK A R I S H M A . C O