Which services are taxable?

Now, important to know – not all services are taxable. Only those which are ‘taxable services’ are taxable under service tax!

‘Taxable services’ – means those services which are taxable under the service tax net.

In other words,

Taxable Services = All services + Declared Services – Negative List – Any exemptions

Examples:

i. giving the right to use intellectual property right (declared service)

ii. Services by Chartered Accountants

iii. Services by beauty salons!

iv. Services by advertising agencies

v. Courier services

vi. Event management services etc.

Now you must be wondering if you maternal aunt, who runs a ladies beauty parlour at her home in South Delhi is liable to collect and deposit service tax – take heart!

Service tax liability arises if the total value of services provided in a financial year exceeds Rs, 10,00,000!

Negative List?

The current service tax laws provide that all services as such are taxable – except for those mentioned in the negative list.

So if you are a service provider – go check if the service you are providing is in the negative list – if so – breathe easy – if not – you’ve got service tax liability and you’ll need to adhere to the very strict service tax formalities, rule and regulations!

i. Services provided by government or local authority

ii. Services provided by RBI

iii. Transmission or distribution of electricity

iv. Services relating to transportation of passengers etc.