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Service Tax on Rail Freight Deferred to April 1 05 Jan 2012  
Service Tax on Rail Freight Deferred to April 1

Service Tax on Rail Freight Deferred to April 1


NEW DELHI, Jan. 4 The date for implementing the service tax levy on transport of goods by rail has been deferred once again to April 1 against the earlier scheduled date of January 1.

The imposition of the levy has now been put off six times. Sources from the sector are of the view that any levy on rail freight would have an adverse impact on the domestic industry, especially cement and steel, given the high inflation situation in the economy.

They aver that such companies would end up shelling out more for rail movement of their inputs such as coal, as also for their finished products. The overall wholesale price index (WPI), based on inflation in the economy, has remained stubbornly high at near double digits since the start if 2010.

However, even after the service tax comes into effect form April 1, the rail movement of pulses, food grains, petroleum products for the public distribution system, organic and chemical manure and motor vehicles would be exempted from the levy.

Sources confirmed that the 70 per cent abatement norm too would now come into effect from April 1.



(Source: Exim India Dt. 05.01.2012)

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