1. Service Tax Shift to Negative List and Challenges in the context of GST Dilip Save 2 nd June, 2012 Indian Merchant Chamber Conference on GST

2. Negative List : Concerns & Challenges Macro Issues :  Expansion of Tax base with limited input tax credit without fiscal reforms  Large tax base with small and medium service providers: concerns of small players on compliance  High Tax rate without full set off will lead to cascading effect.  Complexities in compliance could hit growth and employment in service sector  Bogey of revenue concerns post GST and full set off (?)

3. Negative List : Concerns & Challenges Micro Issues :  Reverse charge liability on certain services – Tax liability on services procured from service providers below taxable limit.  Discharge of reverse charge tax liability – Payment from accumulated CENVAT credit.  Taxability of certain services like payments under non- compete agreement, penalties for breach of contract  Composite contracts – double taxation (?)  Treatment of seasonal, casual employment and secondment to group companies