Indian indirect tax law | Updated October 2026
Negative List of Services under Section 66D of the Finance Act, 1994
The negative list of services was a central feature of India's former service tax regime. Section 66D of the Finance Act, 1994 identified specified services outside the charge of service tax under the negative-list system. This article explains the categories, relevant legal provisions, and their status following the introduction of Goods and Services Tax (GST).
Meaning of the negative list and relevant sections
Section 65B(34) defined the negative list as the services listed in Section 66D. Section 66B was the charging provision for service tax on taxable services, other than those specified in the negative list, provided or agreed to be provided in the taxable territory, subject to the law then in force. Section 66D specified the negative-list categories. Section 66E separately identified declared services; a declared service was not automatically exempt. The Section 93 exemption power and applicable notifications also had to be considered separately.
The negative-list regime commenced on 1 July 2012. The descriptions below summarize historical categories; their scope changed through Finance Acts and notifications before the GST transition.
Historical negative list of services under Section 66D
1. Services by Government or a local authority
Government and local-authority services were listed, subject to statutory exclusions and later amendments. Earlier exceptions included specified postal services, services relating to aircraft or vessels at ports or airports, transport of goods or passengers, and specified services to business entities. The scope was subsequently amended, including changes affecting services to business entities; the law applicable on the transaction date is decisive.
2. Services by the Reserve Bank of India
Services provided by the Reserve Bank of India were included in the negative list. This did not mean that all services provided to the RBI were excluded.
3. Services by foreign diplomatic missions
Services by a foreign diplomatic mission located in India were included, subject to the precise statutory wording.
4. Agriculture and agricultural produce
The list covered specified services relating to agriculture or agricultural produce, including:
- Agricultural operations directly related to production, such as cultivation, harvesting, threshing, plant protection and seed testing.
- Supply of farm labour.
- On-farm processes such as tending, pruning, cutting, drying, cleaning, sorting, grading, cooling and bulk packaging that did not alter essential characteristics and prepared produce for the primary market.
- Renting or leasing agricultural machinery or vacant land, with incidental structures where applicable.
- Loading, unloading, packing, storage and warehousing of agricultural produce.
- Agricultural extension services.
- Specified services of agricultural produce marketing committees or boards and commission agents for purchase or sale of agricultural produce.
The statutory definitions of agriculture and agricultural produce governed eligibility. Grading or processing of goods was not universally excluded merely because it concerned farm products.
5. Trading of goods
Trading of goods appeared in the negative list, reflecting the distinction between sale of goods and provision of services under the former regime.
6. Processes amounting to manufacture or production
Processes amounting to manufacture or production of goods were included, subject to the definitions and amendments applicable to the relevant period.
7. Selling advertising space or time
Historically, selling space or time slots for advertisements was listed with an exception for advertisements broadcast by radio or television. This entry was later omitted, so it cannot be treated as a continuing exclusion for all pre-GST years.
8. Access to roads or bridges on payment of toll
Services by way of access to a road or bridge on payment of toll charges were included.
9. Betting, gambling and lottery
Betting, gambling and lottery appeared in the historical negative list. Subsequent amendments and the separate treatment of related activities must be considered for the relevant date.
10. Admission to entertainment events or amusement facilities
The earlier list included admission to entertainment events or access to amusement facilities. This entry was subsequently omitted; later service tax treatment depended on the amended legislation and exemptions.
11. Transmission or distribution of electricity
Transmission or distribution of electricity by an electricity transmission or distribution utility was included.
12. Education services
The historical entry included specified pre-school and school education up to higher secondary or equivalent, education forming part of a curriculum leading to a qualification recognized by law, and education as part of an approved vocational education course. This entry was later omitted from the negative list; exemptions under notifications remained separately relevant.
13. Renting of residential dwellings
Renting of a residential dwelling for use as a residence was included in the historical negative list. Present-day GST rules for residential renting are different and depend on the recipient, use and applicable notifications.
14. Interest, discount and specified foreign-exchange transactions
The list included extending deposits, loans or advances insofar as consideration was represented by interest or discount. It also covered specified inter-bank and authorized-dealer foreign-currency transactions. Fees and other charges were not necessarily covered by the interest exclusion.
15. Transportation of passengers
Specified passenger transport services were included, subject to class, mode and later amendments: stage carriages; certain non-air-conditioned or non-first-class rail travel; metro, monorail and tramway; inland waterways; qualifying public transport by vessel between places in India; and specified cab or auto-rickshaw services. In particular, radio-taxi and other passenger-transport treatments changed over time.
16. Transportation of goods
Historically listed categories included transportation of goods by road other than by a goods transport agency or courier agency; specified inbound transportation by aircraft or vessel up to the customs station of clearance in India; and transportation by inland waterways. The scope of inbound freight treatment changed before GST.
17. Funeral and related services
Funeral, burial, crematorium and mortuary services, including transportation of the deceased, were included.
Why the date of service matters
Section 66D did not remain unchanged between 2012 and 2017. Some entries were omitted, exceptions were revised and certain activities were addressed through separate exemption notifications. For a historical demand, refund, audit or appeal, verify the exact text in force during the relevant tax period, the place-of-provision rules, valuation rules, applicable exemption notifications and any judicial decisions.
Current position under GST
Under GST, taxability of services is principally determined by the Central Goods and Services Tax Act, 2017, the Integrated Goods and Services Tax Act, 2017, corresponding State or Union Territory GST laws, and applicable rate and exemption notifications. Section 7 of the CGST Act addresses the scope of supply; Section 9 concerns levy and collection of central tax; and Section 11 provides for exemptions. Schedule III specifies activities or transactions treated neither as a supply of goods nor as a supply of services, subject to its provisions.
Current GST exemptions for services are notification-based and must be checked against amendments and conditions. Do not assume that a category previously appearing in Section 66D remains exempt from GST.
For legacy service tax proceedings, the CGST Act, Section 174 contains repeal-and-saving provisions relevant to rights, liabilities, investigations and proceedings under repealed laws.
Official legislation and resources
- India Code - official central legislation database (search for the Finance Act, 1994 and CGST Act, 2017).
- Central Board of Indirect Taxes and Customs (CBIC) - laws, notifications, circulars and historical service tax materials.
- CBIC Tax Information Portal - search statutory notifications and circulars.
- GST Portal - current GST compliance resources.
- GST Council - recommendations and official updates.
This article is general legal information. For historical transactions, confirm the version of the legislation and notifications applicable on the relevant date.