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Mamata Banerjee seeks withdrawal of service tax on rail freight

"New projects need Rs80,000 crore. The pending projects are there. If there is service tax it will be very difficult to implement them," the railways minister said during Question Hour.

DNA Web Team

Updated : Mar 04, 2010, 07:01 PM IST

Railways minister Mamata Banerjee today stepped up pressure on finance minister Pranab Mukherjee for withdrawal of service tax levied on Railways in the General Budget presented last week.

"New projects need Rs80,000 crore. The pending projects are there. If there is service tax it will be very difficult to implement them," she said while replying to supplementaries during Question Hour in the Lok Sabha.

Banerjee said she hoped the finance minister will waive off service tax levied on the Railways as he had done the previous year.

"It is very difficult to go for new lines. The Budget has levied Rs6,000 crore as service tax, I hope the finance minister will exempt Railways from the tax as he had done last year," she said.

Banerjee was upset over Mukherjee's budget proposal to bring the Railways in the service tax net.

Rail ministry officials had written to the finance ministry seeking withdrawal of service tax on rail freight.

Withdrawing an earlier exemption, the Union Budget 2010-11 has proposed to levy service tax at 10.3 per cent on "service provided in relation to transport of goods by rail" with effect from April 1.

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