NEW DELHI: Within days of issuing a service tax notice to BJP for money collected at rallies of its prime ministerial candidate Narendra Modi, a red-faced directorate general of central excise intelligence (DGCEI) withdrew the communique realizing it was not valid.
A senior official of the Central Board of Excise and Customs, the administrative authority of the DGCEI, said service tax is not levied on political rallies. In fact, all sorts of income and donations received by political parties are exempt from taxes. The agency has communicated to BJP that its notice issued earlier stands withdrawn.
The notice was issued by the Ludhiana unit of the agency on February 12 asking BJP local units in Himachal Pradesh, Punjab and Haryana to furnish details of money collected through entry tickets of Modi rallies and if any service tax was paid on it. The party was asked to provide details of such collection since July 1, 2012.
Excise department notice to BJP on Feb 12
The tax notice had invited sharp reaction from BJP with leader of opposition in the Rajya Sabha Arun Jaitley terming it as a "desperate act of the Congress which is not able to counter Modi's growing popularity".
"Absurd that it may sound, they now propose to tax Modi's rallies. Considering the mammoth crowds who gather to listen to Narendra Modi all over the country, this can be finance minister's faint hope of augmenting his otherwise depleting revenue," Jaitley wrote on his blog.
"Narendra Modi is indeed a problem for the Congress. It is precisely for this reason that the Congress has used every method, fair or foul to counter him. They are still at sea how to deal with him," Jaitley said.
Jaitley also denied the agency's contention that money was being charged on Modi's rallies. He said the party has launched a countrywide fund collection drive which includes raising donations at rallies. "Our effort is to reach 10 crore households for fund collection," Jaitley said and asked if such notices were also issued to other political outfits.
Source : TOI
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