Service Tax on Postal Services

Press Release

We are releasing the letter written by Sitaram Yechury, Member, Polit Bureau to Dr. Manmohan Singh, Prime Minister today. This is regarding the Central government decision to levy service tax on postal services.

 (Hari Singh Kang)

 for CPI(M) Central Committee office

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Dear Dr. Manmohan Singh ji,

I am writing to you expressing concern at the recent decision of the Central government to levy service tax on postal services. According to my information, this has already been implemented on all types of postal services including money orders, postal life insurance, speed post etc etc. Currently a 12 per cent service tax and an additional 2 per cent education cess are being levied on these services, i.e., at the rate of 12.24 per cent.

You are surely aware that crores of families in India are surviving on remittances sent by their working children through money orders. This is particularly so with defence personnel. These are lower middle class families who even otherwise are struggling to make both ends meet. Such an imposition of service tax on postal services will further burden vast sections of the common Indian.

You are also aware that the CPI(M) has all along articulated the need to widen the tax base. Such a widening, however, does not mean imposing greater burdens on the economically weaker sections of our society. Widening of the tax base should target those who can afford to part with their incomes and wealth rather than targeting the poor.

I urge you to look into the matter and withdraw these fresh burdens that are being imposed on the people.

With personal regards,

Yours sincerely

Sd/-

(Sitaram Yechury)
Member, Polit Bureau