No more service tax for the transportation of essential commodities such as food grains, petroleum and petroleum products as these and many such goods have been exempted by the government from service tax payment for transportation through railways and waterways.
The list of exempted commodities includes many other products such as hank yarn made from cotton, raw jute and jute textile, fertilizers and farm inputs, as per the notification issued by the Central Board of Excise and Customs (CBEC).
The central government thought it necessary to exempt the taxable service provided to any person in relation to the transport of goods, through rail, national waterway, inland water and coastal shipping, from payment of service tax.
Previously, there was a 10 percent service tax on the transportation of the goods through ports, railways and inland waterways as well.