<h1>India Imposes Service Tax on Rail Parcel Transport with Exemptions for Specific Goods Starting October 2012.</h1> Effective October 1, 2012, the Indian government imposed a service tax on the transportation of parcel traffic by rail, following the Finance Bill 2012. The tax applies to both leased and non-leased parcel traffic, with a 70% abatement on freight charges, resulting in a tax on 30% of the total freight. The service tax rate is 3.6%, with additional education and higher education cesses bringing the total to 3.708%. Exemptions include personal luggage, relief materials, military equipment, postal mail, household effects, registered newspapers, agricultural produce, and certain foodstuffs. The Indian Railways will collect and remit the tax to the Ministry of Finance.