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Relief for realty: Service tax rolled back
April, 30th 2010

Theres some relief for the real estate sector with the finance minister offering for partial roll back of service tax that was imposed on the sector during the budget.

Investors on Friday cheered the government's decision to now impose only 10 per cent service tax on 25 per cent value of your home.

Pradeep Jain, chairman of Parsvnath Developers, said, It is a significant relief to the consumers. Since it empowers the buyer, it will have a huge impact on us.

Only days after the budget, ministries of urban development and housing had appealed to the finance ministry for a roll back of the proposed tax.

Media was the first to report difference of opinion in the government on the issue on March 4.

According to analysts, the quantum of impact will not be very big. However, it might see developers shifting focus to affordable developments.

The service tax was imposed, primarily to put a check on speculative buying in real estate.

However, the government seems to have realised that housing affects common man more than anything else, and any harsh measure on that front, may not go down well with the aam aadmi.

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