Negative list for service taxation: exempt specified services while widening the taxable service base ahead of GST transition.
Introduction of a negative list would exempt specified services while subjecting all other services to service tax, replacing the existing positive list. The concept paper proposes an inclusive definition of "service" with express inclusions (such as rights to use immovable property and temporary transfers of intellectual property) and recommends exemptions for government, judicial, international, social welfare, agricultural, certain financial, transport, education, health and construction services, while warning that broadening the tax base without a comprehensive GST and a robust credit system could raise prices and compliance burdens. (AI Summary)