Jaya asks PM for service tax waiver on rice

Calling the levy of service tax on rice “being unfair to people of south and east India”,  Tamil Nadu Chief Minister J Jayalalitha on Wednesday urged the Centre to declare rice as an agricultural produce and refund the tax already collected.

In a letter to Prime Minister Manmohan Singh on January 10, text of which was released to the media here on Wednesday, Jayalalitha said: “In a thoughtless, insensitive and discriminatory manner, the Ministry of Finance has proceeded to levy service tax on storage of rice among all foodgrain.” “It is yet another instance of how distanced and divorced the UPA government has become from the concerns of the common people,” she added.

Jayalalitha urged Singh to intervene and “unambiguously declare rice to be an agricultural produce and hence not subject to the levy of service tax for all services related to it”.

She said the service tax already collected from July 1, 2012, should be refunded.
Rice was exempted from service tax as it was classified as an agri-produce. Later, the Union Finance Ministry headed by P Chidambaram said only paddy was an agri-produce.