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There is paradigm shift in the way services to be taxed with effect from 01.07.2012. Taxation is based on what is popularly known as “Negative List of Services”. In simple words, it means that if an activity meets the characteristics of a “service” it is taxable unless specified in the Negative list, comprising 17 heads listed in the Section 66D, or otherwise exempted by a Notification issued under Section 93 of the Act. With the introduction of negative list, the assessees are not anymore required to classify their services.
| Section 66D of the Finance Act, 1994 |
The Section 66D introduced in the Finance Act, 1994 states that the negative list would be comprising of the following :-
The negative list shall comprise of the following services, namely:
(a) Services by Government or a local authority
(b) Services by the Reserve Bank of India
(c) Services by a foreign diplomatic mission located in India
(d) Services relating to agriculture or agriculture produce
(e) Trading of goods
(f) Any process amounting to manufacture or production of goods
(g) Selling of space or time slots for advertisements
(h) Service by way of access to a road or a bridge on payment of toll charges
(i) Betting, gambling or lottery
(j) Admission to entertainment events or access to amusement facilities
(k) Transmission or distribution of electricity by an electricity transmission or distribution utility
(l) Services by way of education
(m) Services by way of renting of residential dwelling
(n) Services by way of extending deposits, loans etc.
(o) Service of transportation of passengers, with or without accompanied belongings
(p) Services by way of transportation of goods
(q) Funeral, burial, crematorium or mortuary services including transportation of the deceased | 
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