Strongly opposing the Union finance ministry's decision to
exclude rice from the agricultural produce list and levying service tax
on it, Tamil Nadu CM Jayalalithaa on Wednesday called it “unfairness”
against people in the south and east, where the grain is the staple
food.
In a letter to PM Manmohan Singh, she sought his intervention in the issue and sought to remit and return the already levied service tax since July 1, 2012. Calling the finance ministry's move as "invidious, discriminatory and completely unjust”, she observed that it would be an additional burden on the state government towards the expense incurred for the Public Distribution System.
"The interpretation given by the finance ministry defies logic and common sense. From time immemorial, rice has been regarded as an ‘agricultural commodity’,” she said, adding Tamil Nadu has taken a stand that rice should be exempted from the levy of the Goods and Services Tax.
She pointed out that rice had been exempted from service tax in central government's notifications in 2002, 2003 and 2004, when service tax was levied on storage of goods as it was then defined as “agricultural produce”.
The new definition in Section 65B (5) of the Finance Act, 2012, removed the more inclusive definition which specifically mentioned rice.
The finance minister in a November 8, 2013, letter to the MoS (independent charge) for consumer affairs, and public distribution system, clarified that "rice" and "ginned and baled cotton" do not fall within the definition of "agricultural produce" under Section 65B (5) and, accordingly, from December, 2013, service tax is being collected on storage of rice, with effect from 1st July, 2012.
The ministry's stand that rice was not an agricultural product was “discriminatory, regressive and indefensible”, as other cereals including wheat were exempted from levy of service tax, the CM said.
"It smacks of unfairness against people residing in certain regions of the country, especially in the south and east, where rice is the staple foodgrain consumed. It will raise the price of rice in the open market, particularly at a time when food inflation is already weighing down heavily on the common people,"
In a letter to PM Manmohan Singh, she sought his intervention in the issue and sought to remit and return the already levied service tax since July 1, 2012. Calling the finance ministry's move as "invidious, discriminatory and completely unjust”, she observed that it would be an additional burden on the state government towards the expense incurred for the Public Distribution System.
"The interpretation given by the finance ministry defies logic and common sense. From time immemorial, rice has been regarded as an ‘agricultural commodity’,” she said, adding Tamil Nadu has taken a stand that rice should be exempted from the levy of the Goods and Services Tax.
She pointed out that rice had been exempted from service tax in central government's notifications in 2002, 2003 and 2004, when service tax was levied on storage of goods as it was then defined as “agricultural produce”.
The new definition in Section 65B (5) of the Finance Act, 2012, removed the more inclusive definition which specifically mentioned rice.
The finance minister in a November 8, 2013, letter to the MoS (independent charge) for consumer affairs, and public distribution system, clarified that "rice" and "ginned and baled cotton" do not fall within the definition of "agricultural produce" under Section 65B (5) and, accordingly, from December, 2013, service tax is being collected on storage of rice, with effect from 1st July, 2012.
The ministry's stand that rice was not an agricultural product was “discriminatory, regressive and indefensible”, as other cereals including wheat were exempted from levy of service tax, the CM said.
"It smacks of unfairness against people residing in certain regions of the country, especially in the south and east, where rice is the staple foodgrain consumed. It will raise the price of rice in the open market, particularly at a time when food inflation is already weighing down heavily on the common people,"
No comments:
Post a Comment