The government has decided to exempt distribution of electricity, services provided within ports and airports, international passengers in transit and those travelling to and from the North-East from the ambit of service tax while bringing in more services in the tax net from July 1.
In addition, construction services under specified government schemes and tournaments and championships organised by specified bodies would be exempted from the tax, the finance ministry said in separate notifications.
On Tuesday, the ministry issued notifications for exemption of these services from tax and enforcing the provisions of the Finance Act 2010 from July 1. It, however, further postponed the exemption ofservice tax in relation to transport of specified goods by rail. The levy, which had to come into effect from April 1, will now come into force on July 1.
The realty sector, which had protested against a 10 per cent service tax on the sale of property in the Budget, got higher abatement of 75 per cent from 67 per cent. The service tax would now be levied only on 25 per cent of the gross value.
Besides, low-cost housing schemes for the urban poor under the Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awas Yojana would be waived from any service tax.