<p> At the same time, the government proposed to exempt a slew of services like construction of certain low-cost housing, services within ports and airports and power distribution from the ambit of Service Tax with effect from July 1. <br /><br />Application of modified Service Tax on air travel as well as the proposed exemptions will come into effect from July one, the Central Board of Excise and Customs (CBEC) said through plethora of notifications issued here on Thursday to give effect to various provisions in the Finance Act 2010.<br /><br />Finance Minister Pranab Mukherjee in the Budget 2010-11 had proposed imposition of Service Tax on international and domestic air passengers. This had led to disappointment in the air travel industry. Responding to grievances of the air industry Mukherjee while replying to debate on Finance Bill 2010 clarified that effective rates of levy would be a maximum of Rs 100 per travel for domestic journey in any class and a maximum of Rs 500 per travel for international journey by economy class.<br /><br />Now the CBEC has come out with notifications giving effect to modified Service Tax on air travel as announced by Mukherjee. A service tax of little over 12 per cent is already imposed on foreign travel by business or first class for the past several years. In a separate notification the CBEC said those flying to and from the North Eastern states will be exempted from Service Tax.<br /><br />The CBEC also clarified that foreign travelers would be exempted from the ambit of Service Tax if they are in transit to a different country without passing the Immigration and Customs areas. Through a slew of separate bunch of notifications giving effect to exemption of Service Tax in other sectors, CBEC said low-cost housing built under the Jawaharlal Nehru National Urban Renewal Mission and the Rajiv Awas Yojana will be exempted from Service Tax. <br /><br />Extending the exemption benefits to certain services within ports and airports, another notification of the CBEC said “repair of ships or boats or vessels belonging to the Government of India, including the Navy or the Coat Guard or the Customs will be exempted from the ambit of the Service Tax.”<br /><br />However, the CBEC made it clear that repair of such ships or boats owned by the Public Sector Undertakings will not enjoy the exemption benefits as far as scope and definition of Service Tax is concerned.<br /><br />Other services within ports and airports, which have been exempted from the ambit of Service Tax, include supply of water, supply of electricity, medical treatment, formal education, fire service agencies and pollution control services. <br /><br />Besides, the services rendered by people employed by aircraft operators in any capacity on board the aircraft will be exempted from the ambit of Service Tax from July One. <br />Providing significant relief in the power distribution sector the government now proposes to exempt the taxable services provided to any person by another persons authorized to distribute power under the Electricity Act 2003 for power distribution from the ambit of Service Tax with effect from July 1.<br /><br />The government also proposed to expand the benefits of exemptions of Service Tax to sports tournaments and championships organized by the certain bodies such as national level sports federations like School Games Federation of India, Association of Indian Universities and Para-Olympic Committee of India.</p>
<p> At the same time, the government proposed to exempt a slew of services like construction of certain low-cost housing, services within ports and airports and power distribution from the ambit of Service Tax with effect from July 1. <br /><br />Application of modified Service Tax on air travel as well as the proposed exemptions will come into effect from July one, the Central Board of Excise and Customs (CBEC) said through plethora of notifications issued here on Thursday to give effect to various provisions in the Finance Act 2010.<br /><br />Finance Minister Pranab Mukherjee in the Budget 2010-11 had proposed imposition of Service Tax on international and domestic air passengers. This had led to disappointment in the air travel industry. Responding to grievances of the air industry Mukherjee while replying to debate on Finance Bill 2010 clarified that effective rates of levy would be a maximum of Rs 100 per travel for domestic journey in any class and a maximum of Rs 500 per travel for international journey by economy class.<br /><br />Now the CBEC has come out with notifications giving effect to modified Service Tax on air travel as announced by Mukherjee. A service tax of little over 12 per cent is already imposed on foreign travel by business or first class for the past several years. In a separate notification the CBEC said those flying to and from the North Eastern states will be exempted from Service Tax.<br /><br />The CBEC also clarified that foreign travelers would be exempted from the ambit of Service Tax if they are in transit to a different country without passing the Immigration and Customs areas. Through a slew of separate bunch of notifications giving effect to exemption of Service Tax in other sectors, CBEC said low-cost housing built under the Jawaharlal Nehru National Urban Renewal Mission and the Rajiv Awas Yojana will be exempted from Service Tax. <br /><br />Extending the exemption benefits to certain services within ports and airports, another notification of the CBEC said “repair of ships or boats or vessels belonging to the Government of India, including the Navy or the Coat Guard or the Customs will be exempted from the ambit of the Service Tax.”<br /><br />However, the CBEC made it clear that repair of such ships or boats owned by the Public Sector Undertakings will not enjoy the exemption benefits as far as scope and definition of Service Tax is concerned.<br /><br />Other services within ports and airports, which have been exempted from the ambit of Service Tax, include supply of water, supply of electricity, medical treatment, formal education, fire service agencies and pollution control services. <br /><br />Besides, the services rendered by people employed by aircraft operators in any capacity on board the aircraft will be exempted from the ambit of Service Tax from July One. <br />Providing significant relief in the power distribution sector the government now proposes to exempt the taxable services provided to any person by another persons authorized to distribute power under the Electricity Act 2003 for power distribution from the ambit of Service Tax with effect from July 1.<br /><br />The government also proposed to expand the benefits of exemptions of Service Tax to sports tournaments and championships organized by the certain bodies such as national level sports federations like School Games Federation of India, Association of Indian Universities and Para-Olympic Committee of India.</p>
