Manufacturers of salt and allied products must be accorded exemption from the payment of service tax, the All-India Chamber of Commerce and Industries (AICCI), Tuticorin, has said.

Requesting the Finance Minister to accord the exemption, AICCI, in a statement, said the salt industry is a seasonal and labour-intensive small scale enterprise unlike other sectors, and levying of such tax would affect the survival of the industry.

It observed that in 2012 Budget, all services listed in the negative list stated in Section 66 D of Finance Act, 1994, and exempted service defined in the notification 12/2012 dated March 17, 2012, became taxable services. All activities such as culturing of fish, rearing of silk worms, cultivation of ornamental flowers, horticulture and forestry, were included in the definition of agriculture. But salt manufacturing, which is no second to agricultural industry, was not included either in the negative list or in the exempted services.

The service tax is akin to excise duty on manufacture goods. When the effective duty on salt is nil under the Excise Act, it will be unjust to impose full duty in the name of service tax on activities related to salt manufacturing, the statement noted.

AICCI President, P. S.S.K. Raja Sankaralingam, expressed the hope that the Finance Ministry would consider the legitimate demand to help save the traditional salt industry.