Central Excise asks BJP to pay service tax on entry tickets at Modi rallies

In a curious notice to BJP, theCentral Excise Department has demanded payment of service taxby BJP on tickets for entry to its Prime Ministerial candidateNarendra Modi’s rallies.

Directorate General of Central Excise Intelligence(DGCEI), Ludhiana wing, has shot off a letter to BJP’sChandigarh unit six days ago stating that the party shouldintimate about the details of amounts collected and servicetax paid, if any, in regard to entry tickets to variousrallies organised in the region after July one, 2012.

It said neither the party nor Modi was registered underservice tax and no service tax has been paid on collectionfrom tickets.

It said “as the entry tickets to theevent were not for anyadmission to entertainment event or access to amusementfacilities (which are in the negative list), the same istaxable in the hands of person collecting the amount ontickets”.

BJP reacted sharply saying the UPA government “has nowinvented a new curious method”, which it hopes can tackleModi.

“Absurd that it may sound, they now propose to tax Modi’srallies. Considering the mammoth crowds who gather to listento Narendra Modi all over the country, this can be FinanceMinister’s faint hope of augmenting his otherwise depletingrevenue,” BJP leader Arun jaitley reacted on his blog.

The DGCEI, in its letter had cited media reports claimingthat money was being charged to people who attended therallies of Modi. The department, which comes under FinanceMinistry, took cognizance and raised a demand about thenon-payment of service tax.The department cited section 14 of the Central Excise Act,1944, for raising the demand. Under this Act, the departmenthas the power to summon persons to give evidence and producedocuments in inquiries being conducted under its provisions.Jaitley said while there were no tickets for Modi’srallies, the BJP has launched a massive fund collectioncampaign and its cadre collected it either at rallies orelsewhere in the country.

“Our effort is to reach 10 crore households for fundcollection,” he said and asked whether such notice forcollecting funds is only being issued to the BJP or to otherpolitical parties, particularly the Congress Party."

PTI