IRS v IRS - Transport of Goods by Rail - ST @12.5% (?) from 01 July - Will Didi Agree?
ALL the major newspapers today reported quoting CBEC Chairman that a 12.5% Service Tax is to be levied on rail freight from 1st July 2012. The Chairman is reported to have made this statement at a function organised by ASSOCHAM yesterday. Nobody, not even a very respected newspaper like the HINDU bothered to check if there is any rate of Service Tax at 12.5%. The ASSOCHAM Press Release stated 12.5% and all the top newspapers simply copied the text. Certainly, the Chairman would not have made such a statement. No way; he surely knows that service tax rate is 12%; he must have mentioned 12.36% (including Cess). This is how the top media in the country report tax matters – very junior reporters who have absolutely no idea of the subject are appointed to cover important tax events and they go round asking irrelevant questions to the top officers who are only too glad to oblige for the sake of a little media glare.
Coming back to our service tax on transport of goods by rail, all the efforts of the Revenue to tax transport of goods by Rail were thwarted by the Rail Ministry and it had been postponed several times. Will the Railways relent this time? Now they propose to tax even passenger tickets. Will Didi agree? We will have to wait for a few weeks to know.