'Other Than Negative List' should be abolished

[KASTURI SETHI]

‘OTHER THAN NEGATIVE LIST’ SHOULD BE ABOLISHED

The Central Govt. introduced the category of, “OTHER THAN NEGATIVE LIST” w.e.f. 1.7. 2012. This category/list can be called a sea where any disputed service can be fitted into by the Govt. It is a gross injustice against the assessees inasmuch as whatever has been left due to oversight by the Govt. or if there has been a confusion or absurdity or ambiguity about the exact nature of service that can be classified under the category of ,”Other Than Negative List”. A period of more than three years has elapsed since its implementation. By now Govt. should have been able to specifically and categorically classify each and every taxable service. Any assessee can become victim of show cause notice by way of inclusion of any left out or disputed service under the category of ‘Other Than Negative List’. In case, there is any flaw in the law or any confusion regarding proper classification of any service, the benefit should go to the assessee and not to Govt. of India. There is no dearth of legal experts in the CBEC to ascertain exact nature and classification of taxable service. The category of ‘Other Than Negative List’ can be compared to ‘Goods Elsewhere Not Specified’ under Tariff Item 68 of the Central Excise Tariff Act, 1944. At that time the manufacturers of excisable goods were so fed up with this classification that they called it as ‘Terror Item’. The manufacturers raised voice against this T.I.68 and this terror item was abolished by Govt. in the year 1985 in the new Central Excise Tariff Act.

Classification of any taxable service must be specific and categorical, especially in view of the benefits of abatements and Reverse Charge Mechanism. Any Service Tax assessee can be deprived of the benefits of abatements and Reverse Charge Mechanism by way of classifying the disputed service in the category of ‘Other Than Negative List’. This category will not be abolished until or unless Service Tax assesses are united and raise voice against this category. Undoubtedly CBEC has retained the old accounting codes but these have no statutory force and this will not alter the status of the category of, ‘Other Than Negative List’ There is no justification in continuing this category indefinitely.