Service Tax – New Services from Today – CBEC finally issues Notifications – No tax on accompanied baggage in trains; abatement of 70% on rail transport – no abatement for waterways, plastic surgery and Legal Consulting.
THE CBEC has finally come out with the notifications regarding the new service coming into effect from today. While there is 75% abatement for transport of goods by Road and a 70 % abatement for transport by Rail, strangely there is no abatement for transport by waterways.
The levy of Service Tax on Rail and water transport was introduced in this budget to provide a level playing field. The Finance Minister in his Budget speech said,
In the goods transport sector, service tax is currently levied on transport of goods by road, by air, through pipelines and in containers. However, goods carried by Indian railways or those carried as coastal cargo or through inland waterways are not charged to service tax. In order to provide a level playing field in the goods transport sector, I propose to extend the levy of service tax to these modes of goods transport.