Taxation
No service tax on rail fares, freight till September end

Service tax on railway passenger travel and freight has been kept on hold due to opposition from Mamata Banerjee. The exemption has been extended since then on quarterly basis

 

New Delhi: Passenger fares and freight charges will not go up immediately as the Finance Ministry on Monday issued a notification exempting the Indian railways from 12% service tax for three months till 30th September, reports PTI.

"Government has exempted the core services provided by the Indian Railways, namely transportation of goods and passengers, from the levy of service tax. The exemption will remain effective for a period of three months, up to 30 September 2012," said a finance ministry statement.

Last week, Railway Minister Mukul Roy had written to Prime Minister Manmohan Singh, who is now looking after the Finance portfolio, requesting him not to introduce service tax on passenger fare and freight traffic from 1st July.

The Finance Ministry has moved to a new regime of Service Tax based on negative list from 1st July, under which only 38 services are exempted from payment of the levy.

Service tax on railway passenger travel and freight was introduced in the Budget for 2009-10 but was kept on hold due to the then Railway Minister Mamata Banerjee's opposition. The exemption has been extended since then on quarterly basis.

Earlier, Roy had also requested former Finance Minister Pranab Mukherjee to exempt Railways from paying service tax.

Had the government imposed 12% service tax on railways, passenger fares in all AC classes and first class would have gone up by 3.6%.

As per the estimates, railways would have to bear a burden of Rs6,000 crore had it decided against passing on the service tax burden on the passengers.

The introduction of new Service Tax regime, based on negative list from 1st July, would bring into net a host of activities like speed post and express parcel service of the post office, earnings of TV and theatre artists.

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COMMENTS

Yogesh Sapkale

5 years ago

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JBIC extends Rs275 crore credit to ICICI Bank for Japanese imports

Under the credit line, medium and long-term credit will be provided through the ICICI Bank to Indian importers purchasing renewable energy equipment manufactured in Japan

 

Mumbai: The Japan Bank for International Cooperation (JBIC) on Monday said it has entered into an agreement with ICICI Bank to extend a credit of over Rs275 crore or about $50 million to finance renewable energy product imports from the Far East nation, reports PTI.

"This will be the first credit line to be offered by JBIC that specialises in supporting export of renewable energy-related equipment," the Mumbai-based bank said in a statement.

The credit facility will be operational for two years, the JBIC country representative Shin Oya told PTI over phone, adding, however, importers will get a longer repayment period of up to 18 years.

The $50 million or around Rs275 crore credit line will be co-financed, with JBIC taking a $30 million share and the rest by the Japanese private financial institutions, it said.

Under the credit line, medium and long-term credit will be provided through the ICICI Bank to Indian importers purchasing renewable energy equipment manufactured in Japan.

The Japanese financial institutions, including JBIC, will extend the credit line to ICICI Bank which will on-lend to Indian importers of the above mentioned products.

The equipment may include products based on solar power, solar thermal energy, wind energy and geothermal energy, the statement said.

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Srei BNP Paribas raises lending rates by 25 bps

Earlier, the company, a joint venture between Srei Infra and the French lender BNP Paribas, had last increased its lending rates by 1% in November 2011

 

Mumbai: Infrastructure and construction equipment financing company Srei BNP Paribas on Monday raised its benchmark rate by 0.25% to 17.25% following a rise in borrowing cost, reports PTI.

The company was hopeful of a cut in interest rate by the Reserve Bank of India (RBI) in its recent policy announcement and decided to raise the rate as the apex bank decided to pause, its chief executive DK Vyas said in a statement.

One basis point is 0.01 percentage point.

The company had "decided to wait and look for a trend of increase in the borrowing cost before it decided to pass on the incremental borrowing cost to its customers to maintain a healthy margin", he added.

The company, a joint venture between NBFC Srei and the French lender BNP Paribas, had last increased its BPLR by 1% in November 2011, the statement said.

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