Negative list

This query is : Resolved

AYUSH (Querist)
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15 November 2013 when composite service provided "providing space for advertisement and designong of advertisement" one is under negative list and other one is taxable" Thanks......

Annu Agarwal

Annu Agarwal (Expert)
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16 November 2013 As per my views if seperate invoice is issued for each service rendered then service tax will not be levied on the service specified in negative list i.e. renting of space for advertisement.
Therefore service tax shall be levied only on designing of sdvertisement.
In support of my view i would refer to the guidance note 9 which reads as follows:
"9.2.2 Services which are not naturally bundled in the ordinary course of business
The rule is – ‘If various elements of a bundled service are not naturally bundled in the ordinary
course of business, it shall be treated as provision of a service which attracts the highest
amount of service tax."
Illustrations -
• A house is given on rent one floor of which is to be used as residence and the other
for housing a printing press. Such renting for two different purposes is not naturally
bundled in the ordinary course of business. Therefore, if a single rent deed is
executed it will be treated as a service comprising entirely of such service which
attracts highest liability of service tax. In this case renting for use as residence is a
negative list service while renting for non-residence use is chargeable to tax. Since
the latter category attracts highest liability of service tax amongst the two services
bundled together, the entire bundle would be treated as renting of commercial
property.
Inference from above example:
The above illustrations mention that if a SINGLE RENT DEED is entered then the entire service be taxable.If seperate rent deed be entered ,then only the floor rented for commercial purpose be taxable.

therefore in your case if you enter into two seperate service contract,maybe the provisions of bundled services be avoided and you are able to pay tax only on service not specied in negative list.