The government has exempted a number of goods like food grains, fertilisers and farm inputs from paying service tax for transportation through railways and waterways.
According to the notification issued by the Central Board of Excise and Customs (CBEC), the list of exempted goods includes edible oil seeds and edible oils; food grains (cereals and pulses) and flour, petroleum and petroleum products and Hank yarn made wholly from cotton.
"The central government, on being satisfied that it is necessary in the public interest so to do, exempts the taxable service provided to any person in relation to the transport of goods, through rail, national waterway, inland water and coastal shipping, from the whole of service tax leviable thereon," the notification said.
The list of exempted goods also includes raw jute and jute textile, seeds for food crops and fruits and vegetables, seeds for cattle feed, jute seeds, medicine/pharmaceutical products, relief materials meant for victims of natural or other disasters, defence or military equipments.
Among other items the list also includes consignments like personal luggage, postal mail, mail bags booked for shipping.
Registered newspaper and magazines, kerosene oil meant for supply through public distribution system, petroleum products including LPG cylinders (filled and empty) booked by public sector Oil marketing companies transported by Indian Railways have also been exempted.
Earlier transportation of goods through ports, railways, as well as inland waterways attracted a service tax of about 10 per cent.