From Thursday, a host of new services will get costlier. The Finance Ministry has specified July 1 as the date from which service tax levy would be applicable on the eight new services brought under the tax net in the budget for 2010-11.
All sales of under-construction houses from July 1 will attract service tax.
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.
The eight new services include promotions; marketing or organising of games of chance, including lottery; health services undertaken by hospitals for employees of business organisations and health services provided under health insurance schemes offered by insurance companies; services provided for maintenance of medical records of employees of a business entity and promoting a ‘brand’ of goods, services, events and business.
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.
Exemption from service tax has been provided for distribution of electricity by authorised persons under the Electricity Act. Construction services provided for Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awaas Yojana are also exempt from tax.