Most services to be taxed from today; AC train fares spared

All services except those that are in the negative list will become expensive

All services except those that are in the negative list will become expensive from Sunday with the implementation of the new service tax regime.

With the exception of 38 services figuring in the negative list,all other activities would attract 12 per cent tax. The government had earlier decided to implement the negative list from July 1.

As per the negative list,services like metered taxis,auto rickshaws,betting,gambling,lottery,entry to amusement parks,transport of goods or passengers and electricity transmission or distribution would not attract tax.

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Coaching classes and training institutions will come under the net,though the tax will not be levied on school,university education and approved vocational courses.

To save passengers from the additional burden of service tax on airconditioned classes fares,railway minister Mukul Roy has decided to hold back any move to levy the tax from July.

Roy,on Friday,stated this in a letter addressed to Prime Minister Manmohan Singh,who currently holds the finance portfolio.

The railways are likely to get around two more months for levying service tax on rail freight and passenger fares.

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According to government officials,the railways had sought more time so as to prepare an accounting system for availing the CENVAT credit both on input services and goods. The government is likely to agree to the extension,the officials said.

Service tax on passenger travel and freight was introduced in the Union Budget for 2009-10 but was kept on hold due to opposition from the then railway minister Mamata Banerjee.