The government has once again, for the fifth time, deferred implementation of service tax on transport of goods by rail. It has now been postponed to January 1 next year. The latest date for implementation had been July 1.
The decision is attributed to the prevalent high inflation, as it is felt that levy of service tax on rail freight would adversely impact the domestic industry, especially cement and steel manufacturers.
Budget 2010-11 had brought transport of goods by rail under the service tax net from April 1, 2010, with the government looking to mop up about Rs 1,000 Cr. in 2010-11 alone.
Now, even if the levy comes into effect from January 1 next year, rail movement of pulses, food grains, petroleum products for the public distribution system, organic and chemical manure and motor vehicles would be exempt.
The 70 per cent abatement norm too would now come into force from January 1, 2012.
No comments:
Post a Comment