New Delhi: An embarrassed Central Excise Department on Tuesday hastily withdrew notices sent to four BJP offices demanding service tax on Prime Ministerial candidate Narendra Modi`s rallies after angry reaction from the main opposition party which questioned government`s motive.
The Director General of Central Excise Intelligence officials said that the notices sent to Chandigarh, Himachal Pradesh, Jammu and Kashmir and Punjab units of BJP by its Ludhiana regional unit stand withdrawn.
The officials did not give any reason for deciding to withdraw the notices that had been issued on February 12 but informed the BJP offices today that "no action is required to be taken at your (BJP) end" on the letters.
In its letters to the BJP units, the DGCEI had asked them to intimate about the details of amounts collected and service tax paid, if any, in regard to entry tickets to various rallies organised in the region after July one, 2012.
"You are requested to intimate within 10 days of the receipt of this letter the details of the amount collected and service tax paid, if any, in regard to entry tickets various rallies organized after July 1, 2012 by the BJP/Narendra Modi in the region falling under your office," said Rajesh K Arora, Directorate`s senior intelligence officer in his letters.
It said neither the party nor Modi was registered under service tax and no service tax has been paid on collection from tickets.
The BJP saw in this step yet another manifestation of what it termed as the Congress party`s desperation over not having been 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," BJP leader Arun jaitley reacted on his blog.
"Narendra Modi is indeed a problem for the Congress Party. It is precisely for this reason that the Congress/UPA has used every method, fair or foul to counter him. They are still at sea how to deal with him," Jaitley, Leader of the Opposition in the Rajya Sabha, said.
The notices said "as the entry tickets to the event were
not for any admission to entertainment event or access to amusement facilities (which are in the negative list), the same is taxable in the hands of person collecting the amount on tickets".
The DGCEI, in its letter, had cited media reports claiming that money was being charged from people who attended the rallies of Modi. The department, which comes under Finance Ministry, took cognizance and raised a demand about the non-payment of service tax.
The department cited section 14 of the Central Excise Act, 1944, for raising the demand. Under this Act, the department has the power to summon persons to give evidence and produce documents in inquiries being conducted under its provisions.
Jaitley said while there were no tickets for Modi`s rallies, the BJP has launched a massive fund collection campaign and its cadre collected it either at rallies or elsewhere in the country.
"Our effort is to reach 10 crore households for fund collection," he said and asked whether such notice for collecting funds is only being issued to the BJP or to other political parties, particularly the Congress Party.
