NEW DELHI: Those looking to book a house should do so before July 1. All sales of under-construction houses from July 1 will attract service tax with the finance ministry notifying tax on new services.
However, service tax on rail freight has been further put off till January, 2011. The government has also exempted electricity distribution from service tax.
The Central Board of Excise and Customs, the apex indirect taxes body, has issued several notifications related to separate areas to enforce the provisions of the Finance Act 2010.
Sale of immovable property will be deemed to be taxable unless entire consideration is paid after the issuance of completion certificate by a competent authority. However, service tax will be levied only on 25% of the gross sale value of property . Low-cost housing under the Jawaharlal Nehru National Urban Renewal Mission and the Rajiv Awas Yojana have been exempted from service tax that will begin to be levied from July 1.
Service tax on air travel has been capped at Rs 100 for domestic travel and Rs 500 for international travel. The government has exempted foreign travellers from service tax if they are in transit to a different country without passing the immigration and Customs area. Further, those flying to and from the Northeastern states —Arunachal Pradesh, Assam , Manipur, Meghalaya, Mizoram , Nagaland, Sikkim, Tripura and Baghdogra (in West Bengal)—have also been exempted from service tax.
Sports events such as Indian Premier League will attract service tax but tax exemption has been allowed to tournaments and championships organised by certain bodies such as national sports federations or federations affiliated to them. These include School Games Federation of India, Association of Indian Universities and Olympic Committee of India, among others. The government has also exempted certain services that are provided within ports and airports from tax. These include supply of water, supply of electricity, medical treatment, formal education, fire service agencies and pollution control services.
Source : economictimes.indiatimes.com