The government today exempted transportation of essential goods like foodgrains, fertilisers and petro products from service tax, a move that could help in keeping prices of these items from rising further.

The exemptions are in effect from September 1, the day from which service tax on transportation through rail and waterways, as announced by the Finance Minister Pranab Mukherjee in the Union Budget in July, was to take effect.

"It is necessary in the public interest so to do, (the government) exempts the taxable service provided to any person in relation to the transport of goods," the Central Board of Excise and Customs in two separate notifications for transport by rail and waterways said.

The list of exempted goods include edible oil seeds and edible oils; food grains (cereals and pulses) and flour, petroleum and petroleum products and defence and military equipments.