Five days after finally deciding to impose 10% service tax on freight carried by railways, the government has again put the matter in abeyance till March end. The postponement will be a temporary relief for transporters of coal, steel, iron ore and cement. Other commodities were already exempt from the impost. In a note on Tuesday, railway ministry said “service tax, education cess and higher education cess on transportation of goods now held in abeyance till 31-03-2012”. The combined impact of 10% service tax along with 2% education cess and 1% higher education cess would have been 3.09% of total freight revenue per train. For finance ministry, it would mean R1,000 crore additional revenue in 2011-12.
Source : Financial Express
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