(i) Services by
the department of post, by way of speed post, express parcel post, life
insurance and agency services carried out on payment of commission on
non-government business,
(ii) Services
in relation to a vessel or an aircraft inside or outside the precincts of a
port or an airport,
(iii)
Transportation of goods and/or passengers,
(iv) Support
services other than those covered above to the business entities. Important
support services provided by the Government to the business entities are as
under:
-
Infrastructural, operational, administrative,
logistic, marketing or any other support of any kind comprising functions;
-
Such functions are carried out in ordinary
course of operations by the entities themselves;
-
Such services, however, may be
outsourced from others for any reason whatsoever;
-
and includes advertisement and
promotion, construction or works contract, renting of immovable property,
security, testing and analysis.
2) Services by
Reserve Bank of India;
3) Services by
foreign diplomatic mission located in India;
4) Certain
services in relation to agriculture or agriculture produce by way of,
-
agricultural operations directly related to
production of any agricultural produce including cultivation, harvesting,
threshing, plant protection or seed testing;
-
supply of farm labour;
-
processes carried out at an agricultural farm
including tending, pruning, cutting, harvesting, drying, cleaning, trimming,
sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging
and such like operations which do not alter the essential characteristics of
agricultural produce but make it only marketable for the primary market;
-
renting or leasing of agro machinery or vacant
land with or without a structure incidental to its use;
-
loading, unloading, packing, storage or
warehousing of agricultural produce;
-
agricultural extension services;
-
services by any Agricultural Produce
Marketing Committee or Board or services provided by a commission agent for
sale or purchase of agricultural produce;
The terms,
“agriculture”, “agricultural produce”, “agricultural extension service” and
“Agriculture Produce Marketing Committee or Board” are defined in the Act:
5. Trading of
goods;
A transfer of
title in goods is excluded from the definition
of “service”. Trading in goods involves a transfer of title in goods. Despite
that, trading of goods is also included in the Negative list. This inclusion in
Negative list effectively
means that Cenvat credit in relation to trading of goods will be
denied/restricted.
6. Any process
amounting to manufacture or production of goods;
Generally
speaking, process amounting to manufacture or production of goods cannot be
said to be a “service”, however, the same is not specifically excluded from
the definition of service as we have seen above. Process amounting to
manufacture or production of goods is defined as “a process on which duties of
excise are leviable u/s 3 of the Central Excise Act, 1944 or any process
amounting to manufacture of alcoholic liquors for human consumption, opium,
Indian hemp and other narcotic drugs and narcotics on which duties of excise
are leviable under any State Act for the time being in force”. Further, the
Education Guide clarifies that this entry covers manufacturing activity
carried out on contract or job work basis, which does not involve transfer of
title in goods, provided duties of excise are leviable on such processes under
the Central Excise Act, 1944 or any of the State Acts.
The inclusion
of such activity in Negative list effectively means that Cenvat credit in
relation to such process amounting to manufacture or production of goods may
be denied to a job worker though the principal manufacturer has paid excise
duty.
7) Selling of
space or time slots for advertisements other than advertisement broadcast by
radio or television;
Selling of space
or time slots in cinema theatres, hoardings in public places etc. are covered in
the State List and therefore they are placed in the Negative list.
8) Services by
way of access to a road or a bridge on payment of toll charges;
Allowing access
to road or a bridge on payment of toll is in Negative list. However, services
rendered by any toll collecting agency are leviable to tax.
9) Betting,
gambling or lottery;
Betting or
gambling is defined in the Act to mean, “putting on stake something of value,
particularly money, with consciousness of risk and hope of gain on the outcome
of a game or a contest, whose result may be determined by chance or accident, or
on the likelihood of anything occurring or not occurring”. Lottery is covered
under “actionable claim” which is excluded from the definition of “service”.
Further, the betting or gambling activities are included in the State List.
However, any ancillary service for organising or promoting betting or gambling
events is not covered under the Negative list.
10) Admission to
entertainment event or access to amusement facilities;
Entertainment
event is defined under the Act to mean, “an event or a performance which is
intended to provide; recreation, pastime, fun or enjoyment, by way of exhibition
of cinematographic film, circus, concerts, sporting event, pageants, award
functions, dance, musical or theatrical performances including drama, ballets or
any such event or programme”.
Amusement facility is defined under the
Act to mean, “a facility where fun or recreation is provided by means of rides,
gaming devices or bowling alleys in amusement parks, amusement arcades, water
parks, theme parks or such other places, but does not include a place within
such facility where other services are provided”.
Tax on admission
or entry to such events is covered in the State List which is subjected to
Entertainment tax and therefore the same is included in the Negative list. It
has been clarified that membership of a club providing such amusement facility
would not be covered in the Negative list. Further, any ancillary service in
relation to such entertainment event like an event manager for organising such
event or an entertainer for providing the entertainment is also not covered
under the Negative list.
11) Transmission
or distribution of electricity by an electricity transmission or distribution
utility;
Electricity transmission or Distribution
utility is defined under the Act to mean, “the Central Electricity Authority; a
State Electricity Board; the Central Transmission Utility or a State
Transmission Utility notified under the Electricity Act, 2003; or a distribution
or transmission licensee under the said Act, or any other entity entrusted with
such function by the Central Government or, as the case may be, the State
Government”. It has been clarified that a developer or housing society
collecting charges for distribution of electricity within a residential complex
would not be covered under the Negative list. Further, any service provided by
way of installation of gensets etc. by private contractors for distribution of
electricity would not be covered under this entry.
12) Certain
educational services;
-
Any pre-school education and education up to
higher secondary school or equivalent;
-
Education as a part of a curriculum for obtaining
a qualification
recognised by any law for the time being in force;
-
Education as a part of an approved
vocational education course.
Education
services relating to delivery of education as a part of the curriculum that has
been prescribed for obtaining a qualification under Indian law is covered in
this entry. Conduct of degree courses by colleges, universities or institutions
which lead grant of qualifications
recognised by the law, is covered. It has been
clarified that services of international
schools by way of education upto higher secondary school or equivalent giving IB
certifications are covered in this entry. Coaching
or training given by private coaching institutes or tutors is not covered in
this entry.
Approved Vocational Education Course as
defined under the Act, is also covered in the Negative list.
13) Services by
way of renting of residential dwelling unit for use as residence;
Renting is
defined under the Act as “allowing, permitting or granting access, entry,
occupation, use or any such facility, wholly or partly, in an immovable
property, with or without the transfer of possession or control of the said
immovable property and includes letting, leasing, licensing or other similar
arrangements in respect of immovable property”. Renting of a residential
accommodation for use as residence is covered under the Negative list. However,
a hotel accommodation, motel, inn, guest house, camp-site, lodge are not covered
in this entry.
14) (i) Services
by way of extending deposits, loans or advances for interest or discount;
This entry
covers such services wherein money is allowed to be used or retained on
payment of interest or discount. The deposits, loans or advances, corporate
deposits, overdraft facility, mortgage or loans with a collateral security,
corporate deposits lent for interest or discount would also be covered in this
entry. However, any charges like administrative charges, fees, entry charges
recovered in addition to interest, would not form part of this entry. It has
been clarified that, late payment charges signifies extra charges over and
above the normal interest in relation to credit cards and therefore would not
be covered under this entry.
(ii) Inter se,
sale or purchase of foreign currency amongst banks or authorised dealers;
This entry
covers sale and purchase of foreign exchange between banks, or banks and
authorised dealers of foreign exchange. Any commission or discount in relation
to such forex transactions would not be covered in this entry.
15) Services of
transportation of passengers with or without accompanying belongings by,
-
a stage carriage;
-
railways in a class other than first
class; or an
air-conditioned 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;
The term, “stage
carriage”, “inland waterways” and
“metered cabs” are defined under the Act. However the term, “radio taxis”, is
not defined.
In relation to
services by public transport other than for tourism purpose, it has been
clarified that normal public ships or other vessels that sail between places
located in India would be covered in the negative list entry, even if some of
the passengers on board are using the service for tourism as predominantly such
service is not for tourism purpose. However, services provided by leisure or
charter vessels or a cruise ship, predominant purpose of which is tourism, would
not be covered in the negative list even if some of the passengers in such
vessels are not tourists.
16) Services by
way of transportation of goods by road except the services of a goods
transportation agency or a courier agency or by an aircraft or a vessel from a
place outside India to the customs station of clearance in India or by inland
waterways;
The term, “goods
transport agency” is defined under the Act as “any person who provides service
in relation to transport of goods by road and issues consignment note, by
whatever name called”.
The term,
"courier agency" is defined under the act as “any person engaged in the
door-to-door transportation of time-sensitive documents, goods or articles
utilising the services of a person, either directly or indirectly, to carry or
accompany such documents, goods or articles”.
It has been
clarified that service provided by ‘angadia’ is covered within the definition of
courier and liable to Service tax. Services provided by an agent for
transportation of goods by inland waterways would not be covered in the Negative
list.
17) Funeral,
burial, crematorium or mortuary.
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