Levy of Service Tax on transpotation of goods by rail on oilcakes

[Guest]

Dear Sir,

Recently Ministry of Railways, Railway Board issued a freight marketing circular No. 21 of 2012 dated 28.09.2012 regarding  LEVY OF SERVICE TAX ON TRANSPORTATION OF PARCEL TRAFFIC  BY RAIL FROM 1st OCTOBER 2012. In which point 2.0 provide that the - Commodities exempted from payment of service tax as per Ministry of Finance  Notification No. 25/2012 dated 20th June 2012 are:

(a)     relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;

(b)      defence or military equipments;

(c)     postal mail or mail bags;

(d)     household effects;

(e)     newspaper or magazines registered with the Registrar of Newspapers;

(f)      railway equipments or materials;

(g)     agricultural produce;

(h)     foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages;

But not include point no. (a)  petroleum and petroleum products falling under Chapter heading 2710 and  2711 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); & point no. (j) chemical fertilizer and oil cakes; of notification  no. 25/2012 dated 20th June 2012.

Kindle advise me whether this points (a & j) are include for exemption from payment of service tax on transpotation of goods by rail or not.

Thanks

[JAMES PG]

As per Mega Exemption Notn No 25/2012, the following items are exmpted from levy of ST when transported by rail:

(a)  petroleum and petroleum products falling under Chapter heading 2710 and  2711 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

(b)  relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;

(c)   Defence  or military equipments;

(d)  postal mail or mail bags;

(e)  household effects;

(f)    newspaper or magazines registered with the Registrar of Newspapers;

(g)  railway equipments or materials;

(h)  agricultural produce;

(i)    foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages; or

(j)    chemical fertilizer and oilcakes;

This is an exemption provided by Central Govt by virtue of powers conferred by Finance Act and  such an exemption from levy cannot be denied by any authority. The Railway Circular mentioned above speaks of of ST exemption for transportation of all description of parcel traffic and merchandise booked as luggage. Petroleum products and cemical fertilizers/oil cakes are excluded may not have been specifically included for the simple reason that these are not booked as parcel and normally moves through wagons

 

[Guest]

Thanks sir for your reply.

AI Summary

Service tax exemption on transportation by rail covers petroleum products and chemical fertilizers/oilcakes despite operational booking practices. The Mega Exemption Notification exempts petroleum products and chemical fertilizer and oilcakes from service tax when transported by rail. This statutory exemption, granted by central fiscal authority, cannot be denied by subordinate authorities. Operational practices-such as these commodities typically being moved in wagons rather than parcel bookings-may explain their omission from a railway circular, but do not alter the exemption.