A new service tax regime has come into force from today. All services, except 38 services in the negative list, will now attract 12 per cent service tax. The government has also widened the definition of 'Services' to bring in more activities under the tax net but services such as metered taxis, auto rickshaws, betting, gambling, lottery, entry to amusement parks, transport of goods or passengers and electricity transmission or distribution by discoms have been kept in the negative list and will not attract the tax.

Coaching classes and training institutions will however come under the tax net, though the tax will not be levied on school and university education and approved vocational courses.

Railway Minister Mukul Roy has said railways will not introduce service tax on freight and fare from today saying that he has written to the Prime Minister Dr. Manmohan Singh on the issue, who is now holding the Finance portfolio.

The new approach to taxation of services is intended to take the country and the economy a step closer towards the introduction of Goods and Service Tax, GST.