Service Tax on Realty Relaxed

“The construction sector has requested for a review of the changes in the service tax law proposed in this year’s Budget. Several suggestions have been made by the trade associations. Considering all the inputs, I propose to provide tax relief to this sector by enhancing their rate of abatement from 67% to 75% of the gross value where such value includes the value of the land constructed upon. Certain procedural bottlenecks relating to the completion certificate prescribed in the law would also be simplified.
With a view to give thrust to the low cost housing schemes for the urban poor, I propose to exempt service tax on constructions under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and under Rajiv Awas Yojna.
The above changes relating to construction sector would be effective from a notified date after enactment of the Finance Bill, 2010.” – Said Pranab Mukharjee, Finance Minister, Government of India on Union Budget Proposal.