Transportation of essential items, including foodgrain, edible oil, sugar, salt, fruits and vegetables, fertiliser, petroleum products through railways and waterways will not face service tax.

The government has exempted a number of goods that are of importance to common man, farmers and some industrial sectors hit by demand contraction certain essential items from the levy that kicks in from Tuesday.

The government had brought transportation of goods by railways, national and inland waterways and coastal shipping under the service tax net in union budget 2009-10 to bring them on par with roads sector.

According to a notification issued by the Central Board of Excise and Customs transport of defence and military equipment, railway equipment, postal mail bags, relief material meant, calamities, accidents, parcels of newspapers and magazines, will not attract service tax levied at the rate of 10%.