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The Union Finance Minister Shri Pranab Mukherjee congratulated the officers and staff of CBEC (Central Board of Excise and Customs) for obtaining the target of the Indirect Tax collection. He was speaking at the Annual Conference of the Chief Commissioners and Director’s General of Customs, Central Excise and Service Tax. He disclosed that the new system of service tax will be effective from 1^st July, 2012, that is, the Negative List approach of taxation of services will come into effect from the said date. Under the new approach, all services except those in the negative list or otherwise exempted would come into tax net. This exercise is preparatory to the introduction of GST. The Central Government vide Notification No. 19/2012-ST dated 05.06.2012 has
announced the date of introduction of the new regime of most awaited Negative List approach in Service Tax, which will be effective from 01.07.2012. Under this scheme, the service tax would be applicable on all services except those mentioned either in the Negative List or in the Mega Exemption vide Notification No. 12/2012-ST dated 17.03.2012. Further, the following new sections have been inserted in the Act:

Section 65B – Definitions/ Interpretation of various Terms. Section 66B – Charge of Service Tax: This is the new charging section of service tax. This section seeks to levy service tax at the rate of 12% on the value of all services, except services specified in the negative list (in section 66D). These services would be chargeable to tax if these are provided by any person to any person.  Section 66C – Determination of Place of Provision of Service: This seeks to empower the Central Government to make rules which will contain principles on the basis of which taxing jurisdiction of a service can be determined. These rules would be known as Place of Provision of Services Rules, 2012. From 01.07.2012, these rules come into effect, existing ‘Export of Services Rules, 2005’ and ‘Taxation of Services (Provided from outside India and received in India) Rules, 2006’ will be rescinded. Section 66D – Negative List of Services: This seeks to specify the list of such services which will be outside the ambit of service tax.  Section 66E – Declared services to charge service tax on service portion of nine specified Deemed Sale. Section 66F – Principles of interpretation of specified description of services or Bundled Services Changes in Reverse Charge Mechanism vide Notification No.15/2012-Service Tax dated 17.03.2012 & Changes in abatement rates vide Notification no. 13/2012-ST dated 17.03.2012 will be effective from 1st July, 2012. Mega Exemption Notification vide Notification No. 12/2012-ST dated 17.03.2012 effective from 1st July, 2012. Valuation for works Contract Services vides Notification no. 11/2012-ST dated 17.03.2012 effective from 1st July, 2012. In addition to this, certain provisions under the old Sections will cease to operate from 01.07.2012 vide Notification no. 20/2012-ST, 21/2012-ST, 22/2012-ST and 23/2012-ST dated 05.06.2012: Section 65: Definition of Taxable Service.  Section 65A: Classification of Taxable service.  Section 66: Charge of Section Tax.  Section
66A: Charge of Service Tax on Services received from outside India.