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Wednesday, May 24, 2017

GST on postal-services should be waived or rational

SUBHASH CHANDRA AGRAWAL
(Guinness Record Holder & RTI Consultant)

While ordinary postal-services have been exempted from levy of service-tax, postal-department has to pay service-tax on some select premium services like Speed Post and Express Parcel Post. Charging service-tax from Department of Posts that too only on some select postal-services by Department of Revenue has been like transferring money from one pocket to other of the central government resulting in unnecessary paper-work and procedural aspects involving huge man-hours.

Imposition of service-tax on premium postal-services also results in irrational postal-tariffs like rupees 17 or rupees 39 which deprives users of premium postal-services using attractive commemorative stamps which are normally issued in denominations multiples of rupees five. Use of attractive commemorative postal-stamps for Speed Post and Express Parcel Post may tend to make postal-services more popular than private courier-service.

Now with Goods and Service Tax –GST being introduced, GST should not be applicable even on premium postal-services. Even if it is to be imposed, net postal-tariffs on premium postal-serves should be rounded in multiples of rupees five inclusive of GST. Rather to popularize Speed Post service over private courier-service, Speed Post tariff should be uniform and rational inclusive of GST for both local and non-local service at say rupees 25 per 50 gms or part. Presently there are slabs where fast and reliable Speed Post is much-much economical than totally unreliable ordinary postal-tariff. For example an article weighing 500 gms sent locally through Speed Post costs just rupees 25 while the same article if mailed through ordinary post costs rupees 125. It may be recalled foreign-mail tariffs were also highly irrational, which were made rational after a three-decade long battle only after when suggestions in this regard were ultimately got processed through RTI route.

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