According to proposals made by the Finance Ministry, services like traveling in air-conditioned railway coaches and renting a house, if the service incurs a cost of more than Rs 1 lakh a month, this will elicit more service tax.
The matter was proposed in a revised concept paper on service tax that stated that more tax should be imposed that is is proposed to be implemented in April next year. Close to 22 categories listed in the "negative list" will however be exempted. The first concept paper of the nature was released in July. The new list of services under the tax net will come under the proposed goods and services tax (GST).
The Chairman of the central board of excise and customs, SK Goel said, "While some feel that it should be introduced at the time of implementing the GST with a wider constitutional mandate, others feel that the introduction of the 'negative list" should be independent of the GST."
The proposed tax net will include renting of vacant land for commercial use, employment agencies or placement services and highway toll agencies. Those services excluded from the tax net are interest paid on bank deposits, dividend on investments and public transport.