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With airlines lobbying hard against the proposal to bring air travel under the service tax net in Budget 2010-11, the government may provide some relief to the sector hit badly by a global slowdown. The finance ministry is likely to specify a small fixed amount as the levy on all domestic and international tickets....

The Geneva-based International Air Transport Association (IATA) has written to the Finance Minister, Mr Pranab Mukherjee, calling for a relook at the Budget 2010-11 proposal to levy a service tax on domestic and international air transport....

In this Budget a retrospective amendment has been introduced in respect of the service of renting out of property for commercial purposes. Amendment has been made in the definition of “Renting of immovable property service” to provide explicitly that the activity of renting itself is a renting service. The change has given retrospecti...

The Union Budget proposes to expand the definition of construction service and levy tax on houses under construction as well. The new rule, which will come into effect when Parliament approves the budget, says service tax would be imposed if payments were made before the completion of construction....

The Supreme Court has dismissed the plea of the excise department to levy service tax on IBM India's application software -- enterprise resources planning software system (implementation service). A bench headed by justice SH Kapadia rejected the plea of the commissioner of central excise alleging that IBM had failed to pay service tax on...

The Budget proposals have thrown up a dampener for the housing industry. Construction services have now been brought under the ambit of the service tax in an unexpected move that would raise cost of apartments that are still under construction....

While the government stands to gain around Rs 1,000 crore from service tax on transportation of goods by railways, freight movement on the rail network may become unattractive in case of the tax being passed on to transporters. In the event of the tax being absorbed by the national transporter, allocations reserved for development purpose...

According to the Bill, tax will be levied on “a person covered by health insurance scheme, for any health check-up or treatment, where the payment for such health check-up or treatment is made by the insurance company directly to such hospital, nursing home or multi-specialty clinic”. This will be only applicable to cashless insurance...

Though levy of service tax on domestic air travel is negative, given the rebound in air travel, the players can fully pass on the impact to customers through hike in fares. The budget proposes to increase the scope of air passenger transport service is being expanded to include domestic journeys and international journeys in any class fro...

SECTION73 (3) of Finance Act, 1994, provides for non-serving of notice under Section 73(1) by department in such cases where service tax has been paid before issuance of notice. However, there is no clarity whether department can still initiate proceedings for imposing penalty under Section 76 or 78. Though, CBEC clarified sometime back t...