Preparation of negative list for service tax likely to start soon

The Finance Ministry expects to begin the compilation of the negative list for service tax soon.

Negative list is a list of items on which tax will not be charged as compared to a positive list which the government already has.

The government believes that service tax contribution to the overall tax kitty can be increased significantly if a negative list is prepared.

"Deliberations are expected to start soon on the negative list," Department of Revenue joint secretary V K Garg said here today on the sidelines of a workshop on service tax organised by the Bengal Chamber of Commerce and Industry .

The Finance Ministry may choose to get inputs and public opinion first and then prepare a discussion paper based on that. Garg, however, said, "I personally believe that getting a feedback on a consultation paper largely invites criticism and not suggestions and ideas."

The Union budget hopes to collect service tax to the tune of Rs 82,000 crore from 121 services in the financial year 2011-12.

In 2010-11, the government collected service tax in excess of Rs 70,000 crore more than the revised target of Rs 69,400 crore.

Asked if the negative list will be prepared in sync with the rollout of Goods and Services Tax, Garg said it is not known yet.

After missing the original deadline of April, 2010, for a GST rollout, the government had proposed to introduce it in April, 2011.