Cheers - no service tax on goods transported through trains

The government has withdrawn a proposal to impose a 10 per cent service tax on goods transported by rail, to check price increases of products such as steel, cement and coal.

The revenue receipts of the state-run Indian railways, which opposed new tax proposal, have been adversely affected since September last year due to economic slowdown and decline in exports.

During April-July period, railways' receipts from transport of commodities rose by 4.77 per cent to 182.75 billion rupees as against Rs 174.42 billion during the corresponding period last year.

Govt may remove FBT & Service tax on exporters

Removal of Fringe Benefit Tax(FBT) and service tax exemption for exporters in the Budget are under active consideration of the Finance Ministry, a highly placed official said.

Commerce Secretary Rahul Khullar today met Finance Secretary Ashok Chawla and is believed to have pressed for several fiscal incentives for exporters, who are suffering due to the ongoing recession in major markets.

India's exports have been contracting for the last seven months in a row, costing millions of jobs in labour oriented sectors like gems and jewellery and textiles, industry estimates suggest. In 2008-09, exports grew by a meager 3.4 per cent to USD 168.7 billion.

Khullar met Chawla a day after he had a meeting with a delegation of the Federation of Indian Export Organisations.

The exporters have been demanding removal of the FBT on the ground that the business promotion expenses should not be treated as fringe benefits and should not be taxed.

The other major demands, including outright removal of service tax on exporters, is also under consideration of the government, the official said.

At present exporters get reimbursement for the service tax but it involves several procedural hassles. They want total removal of this tax.

courtesy - economictimes