Furore forces excise dept to withdraw Modi 'rally tax'

In a major flip-flop, the central excise department on Tuesday withdrew a notice it had sent the BJP on February 12 demanding service tax on Narendra Modi’s rallies.

In a major flip-flop, the central excise department on Tuesday withdrew a notice it had sent the BJP on February 12 demanding service tax on Narendra Modi’s rallies after the BJP accused the UPA government of resorting to “desperate measures” to stall the Gujarat chief minister’s prime ministerial ambitions.

The notice, sent six days ago, to the Chandigarh, Himachal Pradesh, J&K and Punjab units of BJP by the excise department’s Ludhiana office, had said: “You are requested to intimate within 10 days … details of the amount collected and service tax paid in regard to entry tickets for various rallies organised after July 1, 2012 by the BJP/Narendra Modi…”

Reacting to the notice and its subsequent withdrawal, BJP spokesperson Ravi Shankar Prasad said: “The government is so very worried about Narendra Modi’s popularity that it has become mentally bankrupt.”

Earlier, leader of the opposition in the Rajya Sabha Arun Jaitley had first brought the matter into the public domain by blogging: “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.”

The Congress declined to join issue with the BJP on this. Its spokesperson Manish Tiwari said: “It is a legal case. Why should we respond?”

The February 12 notice had said that neither BJP nor Modi was registered under the Service Tax Act and no tax had been paid on the money collected from tickets.

Both Jaitley and Prasad denied any sale of tickets, adding that the BJP was collecting money from 10 crore households. They also asked if the Congress and other parties had also been sent such notices.

Tuesday’s letter, which said: “No action is required to be taken at your end,” did not give any reasons for withdrawing the notice.

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