Rail cargo to attract service tax from October.

Service Tax on transportation of goods by rail, which was exempted up to September 30, 2012, would now be levied on total freight charges with effect from October 1, 2012, as per provisions contained in Finance Bill 2010 and subsequent notifications issued by Ministry of Finance.

Since an abatement of 70% has been permitted on freight for the taxable commodities by the ministry of finance, the Service Tax will be charged on 30% of the total chargeable freight inclusive of all charges (like busy season charges, development charge etc., ).

However, certain commodities have been exempted from payment of service tax as per ministry of finance notification.

The railways has carried 405.54 million tonnes of revenue earning freight traffic during April-August 2012. The freight carried shows an increase of 16.45 million tonnes over the freight traffic of 389.09 million tonnes actually carried during the corresponding period last year, registering an increase of 4.23%.

During August, the railways carried revenue earning freight of 78.43 million tonnes, over the actual freight traffic of 75.79 million tonnes carried during the same period last year.


Source : economictimes.indiatimes.com