The Indian Service Tax regime will change from 1 July 2012. Currently, Service Tax, part of the Indian VAT CENVAT regime, is charged on services at varying, codified rates.
This is now moving to a ‘Negative List’ system, meaning that all services are taxable unless they are specified on the list. There will be over 15 categories within the Negative List, and this is expected to rise. They are similar in nature to the European reduced or nil-rated lists, so the items on the Negative List include public services, financial services, education and the supply of power and water. Goods continue to be exempt from Indian Service Tax.
