Transporting foodgrain, fertilisers and petro products through rail and waterways will be cheaper, with the government exempting these from service tax, a move that will help keep prices under check.
The exemption is with effect from September 1, a government notification, as a follow-up to Finance Minister Pranab Mukherjee’s Budgetary proposal, said today.
Road transport will continue to attract service tax.
“It is necessary in the public interest to do so, (the government) exempts the taxable service provided to any person in relation to the transport of goods,” the Central Board of Excise and Customs said today in two separate notifications for transport by rail and waterways.
The list of exempted goods includes edible oilseeds and edible oils; foodgrain (cereals and pulses) and flour, petroleum and petroleum products and defence and military equipment.
Transport of parcels containing newspapers (registered with the Registrar of Newspapers) has also been exempted from the levy.
The transport services through rail and waterways were included in the ambit of service tax in the Budget 2009-10.
